For increased efficency and business process improvement, distributors should implement distribution ERP systems that can frequently evaluate operations.
An article on the Logistics Viewpoints website cites Tony Martins, vice president of strategic services at Halo Pharmaceutical. Martins advocates for “managing in NOW mode, which he defines simply as, ‘If it’s happening now, you deal with it now,’” according to the article.
Traditional sales and operations planning processes conducted cyclically or monthly will be a thing of the past within the next decade, Martins argues, and will be replaced with real-time supply chain distribution management that uses social networking.
“The problem [with the traditional sales and operations planning process] is that it takes three weeks, usually, to deal with something that already happened last month. And you’re doing demand planning with data that is old,” Martins says. “By the time you get to the third week of the month, demand has already changed. The world doesn’t stop moving while everybody is having these meetings and producing these [graphs and reports].”
The article’s basic premise is that sales and operations planning processes must operate in real time. This should be the goal of many supply chain companies. While many of the techniques in place are adequate, such as demand forecasting, these processes need to be run more frequently and be more automated.
In order to act and react quickly, newer applications and technologies are required. The key is using these applications to allow for more automated business processes and workflows. For example, during order entry, available-to-promise calculations should be made in real time to determine when a product can ship and what the source of that product will be. Another example is MRP. Today’s systems must be capable of running and acting on MRP calculations on a predefined schedule that require little interaction from the user.
Many legacy distribution ERP systems will not be up to the task. Supply chain executives need to evaluate this new set of requirements against existing processes and applications to determine if their current system can be supplemented or should be replaced. Having the right tools will be the key to unlocking growth and profitability for distributors.
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