The fundamental problem today in a mid-sized (US$ 25 M to 150M) organisations is to have control over its various business processes. Therefore, there is a lack of visibility and clarity in terms of optimizing various resources that lie within the organisations.
The impact of one business process (transaction) will always have an impact on the next or various other business processes. Since there is no control mechanism and visibility to understand the execution of a particular business process, the action of next or various other business processes predominantly depend on the manual intervention. Manual Intervention has its own huge deficiency side in terms of delays and errors.
Example: In a multiple selling point environment, where many sales persons are booking orders, the availability of items in stock is not known to them because there is no mechanism to keep the stock under reserved category as and when the orders are booked. The sales order triggers the following scenarios
- Generate a dispatch advice to store/warehouse
- Store will dispatch the material which is only available in stock and if the stock is not available, a manufacturing/sourcing advice will be generated. There is clear lack of visibility in this case.
The above is the simplest example one could explain. The life in day-to-day business scenario is not that simple. More tedious processes, such as in manufacturing have greater complexity, therefore it needs more clarity/visibility about many thing to achieve greater productivity, prevention of leakages/losses and better time to market.
‘Enterprise Automation’ through Enterprise Resource Planning (ERP) has made life of today’s business managers very simple due to three things:
They have absolute clarity about, their on the day deliverable
The control over various processes save them from regular losses/leakages (I call it bringing Controlled Rigidity into the system)
Therefore… They are now able to control/reduce cost
And the past data analysis (trend) allows them to take informed decision
Example: Over committed inventory in your stock has a huge cost involved. We all know that keeping excess inventories in the store/ware has significant amount of loading onto your finances and not to forget, space do cost
And on the opposite side, if you have not planned for enough inventories to support your manufacturing targets, then, it will have direct impact on the revenue as well as organisation reputation and customer support.
Today, Material Requirement Planning (MRP) allows business managers to take optimal decision based on their budget planning in co-relation with your past data (trend of manufacturing data and inventory consumption data)
By using the power of data, business managers can now plan for their optimal inventory scenarios. Data related to your local purchase, importation and time of supply, GIT etc. allow business managers to take decision at the right time, all the time…
I will write more about some more processes in the next article… until then… Be happy, keep smiling…
Contributed by Mr. Sanjeev Maini, Managing Director, Lexcel MS Technologies Ltd. Nigeria, a subsidiary of Eastern Software Systems. Also posted by Mr. Maini on www.ebizframeerp.blogspot.com.