There’s a good article at IndustryWeek entitled “IT deemed critical to manufacturing success.”  The article discusses the role of manufacturing software and how IT systems are critical to ensuring business success.

I posted a comment on the site and have included it here as well.

** My comment **

One of the challenges we see manufacturers facing is that large investments were made in legacy supply chain planning systems that failed to deliver.  These systems cost millions of dollars, had excessively long and costly deployment cycles and, if ever completely deployed, ended up being used by a small handful of highly trained people.

Making matters worse is that the world has radically changed since these systems were designed and built.  They were developed with a paradigm that assumed a vertically integrated manufacturing environment with reasonably static business assumptions.  Thus, they use complex mathematical models, programmed with these business assumptions, to compute and optimized plan.

The problem is that we now live in a heavily outsourced and extremely dynamic world, where assumptions are changing all the time.  What do you do if the optimal plan is wrong?  What we find in most organizations is that despite these investments, their users are relying on spreadsheets to try to cope with constant change.  The result is a heavy maintenance toll on a system that isn’t providing the value the company needs and, thus, they suffer with less than market leading customer satisfaction, operating costs, margins, etc.

So, IT is in a bit of a dilemma as it seeks to provide systems that meet changing business requirements while they deal with legacy investments that have failed to deliver and they still have the maintenance toll on these systems.

What companies need today are integrated and collaborative demand-supply planning, monitoring and response systems that empower people to leverage the right human judgment to make necessary course corrections in the face of all these changes.  They need systems that can solve a variety of supply chain management business challenges from a single system.  And, they need systems that get away from the sequential demand planning, supply chain planning paradigm that slowed responsiveness and agility to an integrated view the immediately facilitates rapid demand-supply balancing when unplanned events occur.

And, IT organizations today are seeking to leverage on-demand services to address the businesses supply chain management challenges.  This is critical to deal with the unrelenting budget pressures that IT has been under both in terms of staffing and overall spending, since on-demand services provide the needed functionality without the capital equipment expenses and with dramatically reduced operational fees as well.

IT is faced with a series of challenges, but there are options available to allow IT to provide better manufacturing software tools to the business.

TrackBack • Digg This • Add to del.icio.us
Tags: Manufacturing, Supply chain management
Posted in Supply chain management
You can leave a response, or trackback from your own site.