August 2005 | Commentary | Supply Chain Technology

ERP and SCM: Making the Marriage Work

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Once a cozy nook for enthusiasts, supply chain management has turned into a major focus for enterprises worldwide. That's why IFS North America has extended its services from pure Enterprise Resource Planning (ERP) to offer component supply chain software. "ERP and supply chain management need to work hand-in-hand," notes Cindy Jaudon, president of IFS North America.

To support that philosophy, IFS created the "Extended Enterprise" approach when it rolled out its supply chain products in 2001. The products are designed to help manufacturers collaborate directly with their customers, suppliers, and partners. Web access facilitates this collaboration seamlessly with back-office ERP applications.

IFS' supply chain applications also provide greater visibility to suppliers, as well as the status of essential parts and products, delivery times, pricing, and other information, while giving users visibility into customer demand and orders.

"The integration of these applications makes it easier to provide faster, more accurate delivery of products to customers," Jaudon says.

The IFS/Collaborative Solutions portal lets manufacturers provide customers, suppliers, and partners a personalized, role-based portal interface to key collaborative processes in the company's IFS Applications solution. These processes range from customer-facing order and support management to collaborative project and product lifecycle management.

Sub-contracting, procurement (including vendor-managed inventory), and online RFQs are also available via a web-based portal that offers real-time information.

"We made our portals easy to use and configure so any level of management, subcontractor, supplier, customer, or partner can easily have visibility into the supply chain," says Jaudon.

IFS assumes a variety of roles—planning, training, and maintenance, for example—when dealing with supply chain customers. This concept of roles is synonymous with that of a portal, Jaudon explains.

"IFS/Collaborative Solutions provides a tailorable, role-based portal," she says. "Based upon customers' unique interaction and partnership, we can configure a specific portal view to match the type of collaboration they desire. The configuration lets customers define which types of information they want to appear. The data can be filtered to provide immediate access to relevant information."

IFS also emphasizes its applications' integration capability and modularity. Its IFS/Connect module allows any service to be published as a web service, transmitted via numerous protocols, integrated with messaging middleware products, or simply exported to a file. Designed for XML and the web services concept, IFS/Connect also integrates with legacy systems, EDI handlers, file import/export, and event notification.

"IFS's service-oriented component architecture—completely based on open standards—provides companies with vendor independence, and makes it easier to reshape applications as processes change at a lower cost," Jaudon says.

"The component architecture also provides companies with greater agility throughout the supply chain, allowing them to continuously revise and improve processes."

IFS' SCM solution gives a bounce to one company's supply chain efficiencies.

The company: Tokai Rubber Industries, Japan, produces anti-vibration parts for the automotive industry. TRI Poland, its Polish plant, provides parts for Toyota factories in France, England, and Turkey; Honda factories in England; and Isuzu factories in Poland.

The challenge: With suppliers in Asia, production in Poland, and distribution centers in France and the U.K., TRI Poland required scalable, flexible business applications that would meet the automotive industry's communication standards, while keeping the complex supply chain as streamlined as possible.

And, TRI wanted to implement the new solution as the Polish plant was set up to guarantee operational efficiency from the start.

"We have a situation that is rare in the Polish market," says Maciej Pisarski, logistics coordinator, TRI. "We work here, our products originate here, and we plan our production here. However, 90 percent of our suppliers come from Asia, the rest are from Poland, and our main customers are from the West.

"Delivery times are often very extended, making planning difficult," Pisarski says. "We needed business software that could handle the wide range of companies involved."

The solution: When the plant opened, the company had decided on the IFS Applications solution. TRI Poland chose IFS for its functionality, flexibility, and ease of configuring the electronic data exchange (EDI) module. IFS Applications also offered an added benefit—an experienced and strong local team of consultants and programmers.

The benefits: Now in operation for two years, the IFS system has provided many benefits, says Pisarski.

"It now takes 12 hours from the moment it is received to fulfill an order, and delivery is carried out just-in-time. IFS Applications is a major factor in enabling TRI to meet these commitments," Pisarski explains.

Another benefit of IFS Applications is integration among the different modules, enabling a single data entry to update the entire system.

"Our warehouses are located in the vicinity of our customers' factories, and each product delivered from the TRI Poland plant to a warehouse is recorded electronically," Pisarski explains. "Products issued from a warehouse arerecorded at the distribution centers, and on-site based on an EDI message received from the customer. We also automatically record the delivery in IFS Applications.

"Every order a customer sends via EDI is received simultaneously at the plant and by our warehouses in France or England. This way we always know the exact status of our inventory," she adds.

In addition, having sales and inventory information helps TRI Poland adapt its production level to demand and maintain production continuity, minimizing costs incurred due to production stoppage. And, notes Pisarski, "the capability to check inventory has greatly enhanced the efficiency and quality of our distribution system."

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