Wednesday, August 23, 2006

Mid-market automotive ERP grows up: if you're a small- or medium-sized automotive supplier, here are some traditional mid-market ERP systems to think

Six months ago, when we last examined enterprise resource planning (ERP), we discovered that it was expanding beyond its conventional ERP roots--"expanding its footprint," the pundits would say--to include customer relationship management (CRM), product lifecycle management (PLM), supply chain management (SCM), and other three-letter acronymic initiatives. Nowadays, this expansion is not just the province of mega-ERP systems aimed at the automotive Tier 1 suppliers. Even the breadth of capabilities in mid-market ERP systems is broadening.

Why? One answer, from Gary Flum, general manager of automotive for QAD (Carpinteria, CA), is: "The abdication of responsibility by the OEMs--the responsibility of program management, sourcing, and engineering, planning, and supply information--things like that--are entirely new and being pushed down the automotive supply chain."

So these new requirements beget more sophisticated software functionality.

QAD is complementing traditional electronic data interchange (EDI) with a variety of Internet-based systems. For instance, QAD eQ is an order management hub--really a private, Internet-based trading exchange--with links directly to QAD's ERP system, MFG/PRO. Through this hub, you can make the sales, purchase, and replenishment orders issued by MFG/PRO, even advance ship notices (ASN), available to your entire supply chain.

The latest version of eQ includes eQ Replenishment, which lets real-time consumption about material usage drive the flow of material through production to customer sites. This means customer usage--not the receipt of purchase orders, not mm/max economic order quantities--is driving replenishment. Similarly, real downstream demand, not forecasts, triggers production and procurement processes. In short, this is automated "pull" capabilities leading toward real-time vendor managed inventory and kanban processing.

QAD also has MFGx.net, a manufacturing-based network already integrated into QAD. MFGx.net includes hosted Internet application services such as basic alert-based PLM and QAD's Supply Visualization (SV). SV lets suppliers see all the information regarding the items they supply to you and that you have authorized them to see. SV gets this information for inventory, purchase orders, supplier schedules, and receipts from a customer's ERP system using an XML interface called "the poller," which sends the ERP information to the SV web server. Suppliers can also load information for shipping forecasts and ASNs directly into SV, as well as export information from SV to their external systems. Suppliers without EDI can import their shipping forecasts and ASNs into SV using spreadsheet. The result of this, ideally, is streamlined material replenishment up and down the supply chain.


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