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.