Can the hottest ERP solve the supply problem

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Can ERP solve the supply problem

in most enterprise function models, supply is a very important link. In the traditional model of "human, property, production, supply and marketing", supply is one of the six key functions of enterprise management; In Michael Porter's value chain model, supply is one of the basic activities that can add value; From a higher level, management experts regard the process of purchasing, transporting, processing and manufacturing, distributing raw materials and parts and finally delivering them to customers as a chain, which is named after "supply". This is supply chain theory. Even at the CCTV Spring Festival Gala a long time ago, a sketch by Hou Yaowen and Huang Hong said that "four small 2's destroy one king". Four small 2's refer to the gates of small supply, sales, production and finance. If they are facing four section chiefs of a large width and thickness cavity, the king refers to the factory director, It can be seen that the importance of "global attention to the manufacturing capacity of Chinese enterprises" is deeply rooted in the hearts of the people.

in fact, it doesn't take so much effort to explain the importance of supply - supply is the import of material flow and the export of capital flow in the operation of enterprises, and its "check" Its importance is almost natural. But in the buyer's market, is supply really that simple? It depends on how you define supply work and how you require supply performance. So, what is supply? Or what does the supply work of the enterprise include

from the perspective of the object of supply, the content required for the production and operation of the enterprise needs to be supplied, such as labor, land, houses and equipment, funds, externally provided information and services, and various materials. Due to the particularity of the business, the labor supply is usually completed by the human resources department, the supply of land, housing and equipment is usually completed by the investment department or special equipment management department, and the capital supply is usually completed by the finance department or a separate financing and securities department. Those completed by the supply department or the purchasing department mainly refer to raw materials, semi-finished products (parts), auxiliary materials, operating materials and trading articles

from the perspective of supply process, it usually includes the formulation of supply (inventory and procurement) plan, supplier selection and management, purchase and payment, order processing, transportation and storage

the evaluation of supply performance should not be based on feeling. Good or bad can be evaluated from the financial indicators of supply management, productivity of supply management, quality of supply management and other aspects. Common evaluation indicators include: (1) the main financial indicators of supply management include: total supply cost (TSC), purchase order cost (POC), supplier inventory return (sroi), and total acquisition cost (total cost of ownership or total logistics cost); (2) The main supply management productivity indicators include: the number of material varieties managed, the number of inventory units managed, the number of suppliers managed, the purchase amount managed, the number of purchase orders processed per person per hour, the number of inventory turns compared with the target, and the order fulfillment compared with the target; (3) The four effective indicators of supply management quality are: perfect purchase order proportion (PPOP), supplier order fulfillment rate, supplier satisfaction index, receipt and purchase order matching rate, etc

knowing the contents and performance standards of supply work, we can make a simple description of the work objectives, priorities and difficulties of enterprise supply management, such as table 1: Table 1: work objectives, priorities and difficulties of supply management

as a master of modern management ideas and methods, It is absolutely necessary for designers and engineers to understand the following points: what functions and methods can ERP system help enterprises manage supply well

erp system includes supply management or procurement management subsystem, which includes or should include the following functions: (1) overall procurement demand management of the company; (2) Purchase demand fulfillment management; (3) Supplier management: supplier files, available materials and quotations, qualification evaluation factors and evaluation results; (4) Online purchase: electronic bidding and negotiation; (5) Online Supplier Portal: electronic real-time connection to share demand information, generate purchase orders, share forecasts, transfer, update purchase order status, freight forecast, automatic replenishment, and inventory transparency; (6) Purchase order tracking, receiving, quality inspection and payment; (7) Material receipt/issue, transfer, sub packaging, transportation and inventory; (8) Supply activity analysis, reporting, data storage, data analysis, pattern recognition and picture representation; (9) Total acquisition cost analysis, supply department and supplier performance report; (10) Supply basic data management

erp system is closely related to the supply (Procurement) management function, but the management functions or software functions that are not completely included in the supply (Procurement) subsystem include: master production plan and material demand plan, accounts payable management, inventory management, sales management, cost management, basic data management, etc. The functions, methods and data in these systems are combined to jointly realize the high standard requirements of enterprises for supply management and help enterprises improve supply performance

based on the functions and methods of the above systems, we can see the help and improvement of ERP methods for supply management, as well as the impact of these methods on supply management and supply performance, as shown in Table 2. Table 2: the help and improvement that ERP can bring to supply management

it can be seen from the above table that: first, ERP can improve the accuracy of the plan. In other words, through the accuracy of variety, quality, quantity, time, place and method, the material supply is not too much, not too early, not too late -- just right. The shortage cost, storage cost and transportation cost of the enterprise are greatly reduced. Second, ERP can standardize the procurement process. Through strict and effective market competitiveness, it will further improve the material classification and business division, so that all kinds of materials can enter the enterprise through corresponding procurement methods, batch and transportation methods, approval processes and quality inspection standards, so as to match the importance of supply work with control strength and supply efficiency, and reduce the cost, quality cost and violation cost caused by lack of efficiency. Thirdly, ERP can improve supply efficiency. Through automatic planning, electronic interaction and other methods, the efficiency of finding suppliers, material procurement, tracking and processing supply orders and other labor and material resources consuming work has been greatly improved. The material varieties, warehouse quantity, supplier quantity and order quantity that each employee can manage have been greatly increased, reducing personnel costs and office costs. Fourth, ERP can provide timely and reliable information. Where there are better suppliers, which purchase demands can be consolidated, what is the acceptable price threshold, the concessions obtained in history, the comparison of performance between different suppliers, the time and location requirements for distribution and other data, if available at any time, will undoubtedly greatly increase the weight of negotiation with suppliers. In addition to the reduction of purchase prices, transportation costs, quality costs Office costs will also be improved

by now, we can draw a conclusion that only by implementing and applying ERP software and further making rational use of the management methods and ideas contained therein can enterprises improve their supply efficiency, improve their supply performance, and effectively reduce the total purchase cost


[1]f · x · BEA, e · devitrix, m · Schweitzer, enterprise management (Volume III), -- business process, Fudan University Press, 1998

[2] Edward fletchelli, logistics strategy consulting: methodology, tools and practice of supply chain integration, China finance and Economics Press, 2003 (end)

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