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Keywords
Manufacturing resource planning, Supply chain management
Abstract
Early enterprise resource planning (ERP) systems or, more simply, enterprise systems (ES), were not primarily focused on the supply chain. Their initial focus was to execute and integrate such internally-oriented applications that support finance, accounting, manufacturing, order entry, and human resources. Having got their internal operations somewhat integrated, many organizations have moved on to address the supply chain with their ES. The Internet has also brought about a revolution in supply chain thinking. Progress toward complete inter-enterprise integration is measured in years and even decades. In this article, we discuss both the visions firms have for using enterprise systems for supply chain management, and the actual reality of current implementation. We conclude with projections of how enterprise systems will be used for supply chains in the future.
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Introduction
Early enterprise resource planning (ERP) systems or, more simply, enterprise systems (ES), were not primarily focused on the supply chain. Their initial focus was to execute and integrate such internally-oriented applications that support finance, accounting, manufacturing, order entry, and human resources. Even in the early days, however, a link to supply chain management (SCM) was present in the form of inventory management.
Having got their internal operations somewhat integrated (Davenport, 2000), many organizations have moved on to address the supply chain with their ES. As more and more businesses complete their initial, multi-year implementations of core ESs and reflect on the large amounts of money and years it has taken to reach this point, too many are still unclear on how they will leverage all this integrated information into real competitive advantage. The supply chain, with all its transaction and information-intensity, offers substantial opportunity for inventory and working capital reductions. It also offers the possibility of closer relationships with suppliers and customers. In difficult economic times, both of these benefits are highly sought after. In a recent study of how 30 large firms were managing their ES environments (Davenport et al., 2002), more mentioned work on supply chains than any other application domain.
The Internet has also brought about a revolution...