Customer Push Becomes ERP Shove

"Please allow six to eight weeks for delivery." Not long ago, that plea for patience appeared on nearly every order form a customer encountered - no matter whether the order was for magazine subscriptions, plant seeds, or auto parts. Try weaving the "six to eight weeks" caveat into your shipping policies these days, and you're likely to be out of business before the delivery period elapses. In fact, in many verticals, a turnaround window of six to eight days would now be considered an eternity. Manufacturers, for example, increasingly expect their suppliers to furnish them with just-in-time inventory in turnaround times as short as 24 to 48 hours.

If fulfilling requests remained simply a matter of pulling items from on-hand stock or rolling out standard services, fast turnaround would not be cause for heightened anxiety. However, customers are emphasizing the custom in customer more seriously than ever before.

A company's ability to respond quickly to unique orders stems, to a large degree, from the connectedness of its various operations. For example, if an MRP (materials resource planning) module can exchange data with a CRM (customer relationship management) application, then information generated about customers' ordering preferences can be yoked to automated processes for releasing orders into production and for replenishing inventory. When the same data is also used by the sales and marketing departments, it can contribute to decisions about, for instance, whether or not certain made-to-order items should become standard offerings that can be readied for even faster turnaround.

Making all of that happen seamlessly is a tall order, to be sure. But, it's an order you don't have to fulfill on your own. ERP (enterprise resource planning) vendors are already integrating formerly separate, point solutions into single suites. Most importantly, these integrated suites increasingly offer portal interfaces that drive information exchange and real-time response to it.

Make ERP And CRM Play Together
Companies should implement supply chain solutions that deliberately remove barriers that force departmental operations to generate data in relative isolation. People responsible for making high-level strategy decisions need to be able to monitor actual performance anywhere in the company at any stage in the order processing and fulfillment cycle. According to John Bridges, VP of marketing for IFS North America (Chicago), tearing down walls between production and customer service, in particular, is crucial for keeping suppliers informed about and responsive to their markets.

But, some companies, like the midmarket manufacturers IFS targets, either don't need or can't afford high-end CRM solutions. For them, getting some CRM functionality to work in conjunction with their ERP system may be enough. "Even if they can afford stand-alone CRM packages, companies that try to pull in some of that functionality often face integration problems," Bridges says. "The company may want the CIO to be more involved in long-term strategic planning. Unfortunately, 90% of the time that person keeps getting dragged back into keeping various application interfaces working with each other." That's why ERP vendors like IFS are working to build CRM functionality directly into their products, either as optional modules or as standard components.

Make-To-Order Might Remake Your Catalog
Once CRM has been brought into the ERP mix, other aspects of traditional ERP functionality will be affected. Because "make to order" is an increasingly fundamental part of the supplier-to-customer relationship, ERP-guided manufacturing processes will likely become more flexible and adaptable. "For many years, manufacturers tended to be somewhat stand-alone entities. Relying on a limited supply chain, they produced their catalog offerings in a make-to-stock environment," Bridges explains. "But, now they may have to shift some of their processes to handle customization. They may even have to be able to produce and distribute make-to-order and make-to-stock items simultaneously. That's not easy if you've traditionally done one or the other."

Susan Heystee, president of supply chain solutions vendor Baan (Herndon, VA), agrees that companies may have to abandon the notion that a catalog is the be-all and end-all of a company's offerings. And, to accommodate custom orders, they may have to open a direct line from the Web to the shop floor. "Suppose an office furniture supplier wants to give its resellers Web-based tools for configuring customized office systems. Now, it needs to take configuration models that used to remain internally on a bill of materials or on an engineering design and make them available online," Heystee explains. "To facilitate that, the ERP system's configurator has to hide the complexity of manufacturing rules and constraints and make it simple for a dealer to map out a custom design."

XML Opens Supply Chain Portals
In addition to giving customers the power to do custom configuration, integrated ERP suites offer companies browser-based tools for monitoring activities across the enterprise. XML (extensible markup language)-based portal technology is the key enabler. Portals provide access to timely information that, behind-the-scenes, has already been pulled from various corners of the enterprise and predigested for various users' needs. "It goes without saying that an ERP suite has to be completely XML (extensible markup language)-compliant. That should be a core part of any solution," says Heystee. "What a lot of companies are now calling 'e-operations initiatives' rely on the system to deliver alerts and triggers on key performance metrics. For example, if your goal is to drive additional revenue by increasing your order fulfillment volume, you need scorecard indicators that show your current on-time delivery rate or the length of your order-to-cash cycle."

With portal technology putting the data right in front of them, managers don't have to call the IT staff to find out customers' spending patterns. They don't have to wait for a weekly maintenance report that shows that production slowed down because a piece of equipment was pulled for repair. For Bridges, pushing enterprise data to portal-based scorecards and dashboards is effective for a very simple reason - interacting with a browser-based system is now utterly intuitive. "We have customers who hadn't used Windows until they came to us," Bridges says. "But, everybody has used a browser. People's grandmothers use browsers. We didn't have to build the Web, but we are definitely making use of its infrastructure."