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ERP Perspective
Part 2 of 9

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Extended ERP is the result of decades of evolution. Fig­ure 1 highlights the evolutionary path and Figure 2 is a diagram of the high-level processes of extended ERP.

A multiple choice quiz—strictly to test the effective­ness of the discussion facilitator.

•    Extended ERP was a radical new innovation that sur­
faced in the late 1990s.


•    Extended ERP is the result of 30 years of progressive
improvement based on proven results and innovation.


Three major influences drove the evolution of ERP to extended ERP:


1.        Enhancement of the body of knowledge (BOD) to
address the needs of a variety of manufacturing in­
dustry verticals

2.        The "new face" of industrial competition

3.        Advanced computing technology.


One influence was the enhancement of the body of knowledge to specifically address the "styles" of resource management optimal for projects-oriented manufactur­ing, the highly integrated nature of the automotive in­dustry, contract manufacturing, and the support of the delivery of value-added services, etc.


Another influence was the change in the basis on which an enterprise could successfully compete. Many perfor­mance capabilities that previously pro­vided distinct competitive advantage became normal expectations. Capabili­ties such as reliable delivery commit­ments, high quality, and low prices became the minimum to participate, not the competitive differentiator pre­viously experienced.

The competition within the manu­facturing industry has created many new concepts, business models, and techniques that have influenced the evolution of extended ERP. For ex­ample

1.        The virtual enterprise business model

2.        Time-based competition

3.        Mass customization

4.        Lean manufacturing.


The new basis of competing was repre­sented in several concepts. One was the adoption of the virtual enterprise model, a model based on the philoso­phy that an enterprise should identify and then organize around its core com­petence. This requires the dispersement of all other activities to others outside of the enterprise that have a core com­petence in the activity being subcon­tracted. The virtual enterprise is a network of partners that replace the vertically integrated enterprise model of the past decades. Included in the sub­contracting are value-added services. The net of all this is that the customer now expects your enterprise to be really, really good at what you're selling them. Almost every sec­tor of our economy is adopting the virtual enterprise model.

To Be Continued

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

Lean Manufacturing Articles and click on Series 13


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