Filling the Gap: Tying ERP to the Business Strategy

ERP connected to business strategy provides tactical and strategic advantages to supply chain executives. Achieving this connection between the two, however, can be a challenge. As this article by Alan Kosansky and Jim Piermarini explains, there are a few considerations and tricks that must be taken into account to help tie these two together. The first step (of course), is to figure out how the get the ERP system to adhere to business strategy: Figure out how to get the ERP system to do it. This approach works well if the company's needs align well with current industry practices supported by ERP systems. Otherwise, companies may find themselves going down a path that consumes significant resources for a poor fit in the end. Companies that adhere to this path typically do so in part because there is a strong C-level edict in favor of simple, clean upgrades for the ERP system. Faced with this, the IT organization has enormous power to shape the nature of the supply chain operation to fit within the established ERP norms, and thus can act as a barrier for business innovation and supply chain improvement. The article goes on to list an example from the field: a consumer electronics company was having difficulty meeting SLAs. Through evaluating the customer’s priority, actual inventory, and planning information shared by the customer, the electronics company increased the service levels effectively.

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