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BUSINESS CHALLENGES: WHY IS THIS IMPORTANT?

Customers are demanding instant information gratifi­cation, and so are their customers. Current information flow velocity across the business community is often too

slow. Market change is not slowing down, and market differentiation requires innovative business processes. Applications to support these new business processes will always be required, and integration of the applica­tions will be a fact of life as long as change is. Failure to perform this integration can degrade even the best-of-breed systems.

BENEFITS OF INTEGRATED SYSTEMS

The objective of integrating is to perform as one orga­nization, across all links, in order to serve the end user or customer. This type of borderless business process becomes a win-win situation for all involved, as rime and inventory are minimized through the supply chain, improving flexibility and profitability. An integrated supply chain is a business opportunity as it can provide the following benefits to an organization:

      Provide an enterprise view throughout the organization.

      Facilitate removal of functional barriers.

      Provide knowledge sharing and synchronized infor­
mation across the organization.

      Allow for customer-centric planning.

      Provide global supply chain optimization, by mini­
mizing uncertainty and cost.

      Lower total cost of ownership.

Integrated supply chains drive benefits that contrib­ute to the effectiveness and optimization of ERP sys­tems by providing information and efficiency through the following (see Figure 2):

      Common demand plan

      Time-phased supply plan

      Constrained production plan and schedules

      Enterprise shipment plan

      Knowledge sharing

      Focus on planning vs. expediting.

Some of the benchmark improvements that have been seen to date include the following:

      20 to 30 percent fill rate improvement

      10 to 30 percent fulfillment cycle time improvement

      20 to 50 percent network-wide inventory reduction

      20 to 60 percent improved forecast accuracy

      5 to IS percent supply chain cost reduction.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 12


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"Great manufacturing articles. Thanks for the insights. I often share portions of your articles with my staff and they too enjoy them and fine aspects where they can integrate points into their individual areas of responsibilities. Thanks again."

               Kerry B. Stephenson. President. KALCO Lighting, LLC


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