Any mention of automation in the manufacturing segment sparks off the word ERP in ones mind. Most large- and mid-sized manufacturing companies have deployed ERP (Enterprise Resource Planning) solutions to derive efficiency in internal operations. Even smaller companies seem to be following suit. Typically, ERP streamlines processes within functions like inventory management, production, financials, procurement, personnel management, etc. The tangible benefits include reduced cycle time, enhanced productivity, faster time to market and optimised processes. Globally, however, organisations in the manufacturing segment have realised that the buck does not stop there. The challenge facing manufacturing organisations is the need to stay competitive while improving productivity and bottom line. At the same time, there is little to differentiate between products offered and the internal processes deployed. Hence the efficiency, cost reduction or cycle time reduction that can be achieved through systems like ERP is limited. The trick lies in differentiating the manner in which sourcing is done, the manner in which the product is taken to market and the way in which the organisation interfaces with customers.
To achieve these ends companies are looking beyond ERP to outward facing systems that integrate suppliers, customers and partners into the enterprise. A seamless integration between the back-end ERP system and outward facing enterprise applications like SCM, CRM, electronic commerce, etc is helping manufacturing companies worldwide to stay agile and competitive.
Islands of automation
In India, the scenario is a little different. Inefficiencies, wastage, cost escalations and excess inventory plague Indian manufacturing companies. In answer to this, pockets of automation delivering limited benefits are visible. Most large manufacturing organisations have implemented ERP across several functions. These include systems that have been developed in-house or bought from ERP vendors and customised to meet the organisations requirements. Many of the decentralised offices of the last decade have given way to more centralised systems. Basic IT infrastructure is also in place. The next level of enterprise applications have started making their presence felt. At this juncture, the need to smoothly integrate these applications with the existing ERP systems is proving to be the major challenge. As organisations ramp up their IT infrastructure and add more applications, the need to synchronise the back-end and the front-end is very apparent. Building a CRM system that has no interface with the back-end ERP is like getting your employees to work blind-folded. The transparency and insight required to handle customer queries quickly and efficiently comes through information availability - data that is often readily available within the ERP system. The same goes with supply chain optimisation and partner-oriented solutions. Integration of these systems will enable the organisation to deploy self-service - thus reducing manpower requirement while facilitating faster dispensing of queries. The final combination of product and services that you are able to deliver to your customer is a clear differentiator in the competitive world of today.
A case for integration
By extending and integrating IT beyond the enterprise the manufacturing organisation is able to gauge and factor in external influences. This arms the enterprise with valuable information, helps in planning and decision-making and results in an agile organisation. Such integration and optimisation can deliver benefits far beyond that offered by an inward-looking ERP implementation.
Technology-wise such integration beyond the enterprise requires the knitting together of various applications - starting with ERP and moving on to CRM, SCM, BI, electronic-commerce, etc. Today, technology transcends disparate databases, heterogenous platforms and legacy systems to make such integration possible. Middleware and Enterprise Application Integration technologies will have a key role to play in delivering on the promise of the integrated enterprise. The integrated enterprise that leverages networking technologies and the Internet to integrate within and without the enterprise will have the ammunition to participate in the global marketplace