ERP does not meet the 500 highlights the superiority of SCM

From the 1960s, the company began the application of management information from MRP to ERP, and gradually realized the procurement, inventory, production, sales, finance and human resources, business management, its internal business processes and process is automated, vertical integration within the enterprise management creates an indelible contribution. However, in today's booming economic globalization, ERP in supply chain management, horizontal integration across the enterprise appeared to be inadequate. Thus, the global top 500 enterprises in the years after the introduction of the ERP application and then have a SCM (supply chain management).
So, ERP and SCM in the end What is the difference?
First, theoretical models and methods: SCM Vs ERP
Over the years, people have been consistently used in the mathematical programming methods such as business planning and management arrangements, giving rise to the MRP method and mathematical programming, the two main methods of planning, the latter due to difficulties such as modeling, large amount of computing and other objective conditions, the development of relatively slow, and omitted some of the MRP rules as real, but difficult to solve factors, simple and easy calculation, to obtain good results and development. However, people gradually found that those factors are often ignored and must be attention, coupled with the rapid development of computer calculation speed makes the use of mathematical programming is not difficult, people began to permanent way a computer's memory using the mathematical programming method to the planning, which The new plan is to kind of the beginning of the SCM, it was discovered that this method regardless of the accuracy of the plan, or preparation in terms of speed and optimization of ERP is so much better than the MRP method still used today.
SCM uses a variety of optimization models and mathematical analysis of the rules is based on the theory of constraints to plan, it considered the materials, equipment, personnel, space, time and technology, all the constraints, different objectives can be regulated by different optimization. It has a more solid theoretical foundation and guidance of a more scientific approach to a more optimal plan, accuracy and feasibility. In addition, SCM by means of various models and algorithms to the enterprise and supply chain decision-making and optimization. The ERP of the theoretical model is too simple and old, it plans to model and lead time is calculated and so can not simulate today's complex business processes. For example, it is planned by the assumption that companies have unlimited material and capacity planning model is unconstrained; Again, ERP is generally a simple linear equation T = A + BX computing product lead time, but each item every procurement lead time may be there is a big difference, can not use this simple formula to accurately calculate; and lack of support for the theoretical model, can not achieve business optimization and scientific decision-making.
Second, in the management of scope: SCM Vs ERP
ERP is for internal management, can only manage its internal resources. Alone, however, improve the internal business has become more effective access to limited. With economic globalization and market competition, the formation of the production and delivery of customized products continue to shorten the trend, companies face more complex business environment, the focus gradually shifted to the management company outside of the supply beyond the upstream and downstream chain management and business collaboration, and to adapt to environmental changes. The ERP in the scope of management and coordination of multiple functions do not have the ability to inter-enterprise resources, not the supply chain information sharing. However, SCM is able to meet supply chain requirements of the operation of horizontal integration, which help companies better compete in the new environment, taking into account the resource constraints, optimization and decision support, effective use and integration of external resources, and the upstream and downstream enterprises to establish a partnership to achieve information sharing and business integration, co-coordinating the development of balanced joint plans to achieve operational synergies and maximize the value of the supply chain as a whole.
SCM other than ERP is that it can simulate and improve the financial indicators, in particular, income, cost and asset utilization indicators. It is not simply to reduce costs, but to use different ways to meet market and customer demand, the enterprise and the whole supply chain to maximize profit, it is by improving the income statement and balance sheet of the key factors to achieve equity maximization. Thus, ERP is only a single enterprise to achieve maximum value, while the SCM is achieved throughout the supply chain as well as social value maximization.
Third, in the preparation of plans: SCM Vs ERP
First, SCM is based on certain rules planned. It is through the different rules for different business plan, and a single target and multi-objective optimization program, which expanded the scope of the plan. The ERP is difficult to achieve optimization; Secondly, it is complicated by the plan, the plan period is continuous, it is comprehensive and complete account of the constraint, the resulting lead time is flexible, project visibility, reach worldwide. It can be on the supply chain and enterprise business planning, business processes once considered the vertical and horizontal coordination, no one to turn to plan. The ERP program is prepared according to the order of the plan period is discrete, the resulting lead time is fixed, only for a function plan, its visibility is limited to local, almost without regard to constraints; again, SCM plan covering all business planning model can be done in sufficient detail, covering long, medium and short-cycle, can be inverted to achieve, along row and middle row, from the sophistication of its year, month, until the day on Monday, hours and minutes. At the same time, SCM can be produced at any time and changes in customer demand for rearrangement program quantification reflect even ahead of market demand, such as changes in the resources and constraints, the user's priority and so on. It can achieve a sustainable transformation process, making the rearrangement of each plan can be ready to deal with unexpected changes. The ERP program is sometimes very difficult to do by day, but not accurate to the hour and minute, it is difficult to achieve rapid rearrangement plan; Finally, the generated plan, SCM under the "evaluation plan cost" criteria to evaluate the cost of the project, and with the company's financial indicators compare and measure, and further verify its feasibility. However, ERP can not make the cost of the project evaluation.
Fourth, in business management: SCM Vs ERP
SCM in the ERP business management with a better than more features. First, SCM has a strong commitment of time, its commitment to standards to provide customers with accurate delivery date. Although the amount of ERP can also have a commitment to check the ability of ATP, but only based on the existing inventory checks, based on the SCM in the ATP, based on the commitment through the ability to demand commitment and ability to check the order, expand the availability of production inspection and examination of the profitability of such function, including suppliers and service providers, including resources for dynamic analysis and physical examination to make accurate delivery of customer commitments, and in order to discuss the first a time will be able to determine whether the order can be profitable, the need to accept orders; second, SCM supply chain can be optimized allocation of resources, the supply chain in advance of a scarce resource with higher priority assigned to the the needs of customers or channels to other clients or channels to avoid competing with them the resources to achieve balance and optimal use of resources. The ERP does not have this ability; Third, SCM plans to extend outside the enterprise can generate cross-enterprise collaborative planning, real-time business partners understand the changes, timely rearrangement plan, maintain a high degree of flexibility and predictability, in order to respond quickly to market demand. The ERP is unable to meet this demand; fourth, SCM can dynamically calculate the lead time, it provides a lead time than the standard features of ERP, ERP logic use a fixed lead time to plan, which has run throughout the supply chain number of negative effects; fifth, SCM can demand the supply chain, supply and constraints to monitor, in real time to compare these three, when it fails to match the early warning signals immediately, and perform logical operations to make them intelligent re- restore balance and re-achieve synchronization, which is ERP can not be achieved; Finally, compared with SCM, ERP lack of optimization and decision support, business partner relationship management, collaborative management of upstream and downstream operations and logistics management capabilities, enterprise supply chain can not be achieved operation and synergy between the more efficient use of resources outside the enterprise.
Therefore, ERP can only tell you how to perform, while the SCM is able to help you decide how to implement in order to make improvements to how the profit-based optimization of the total value of consideration? How to determine the optimal sequence of production processes to minimize process and equipment integration and Set? suppliers and how the customer's location changes will affect transportation costs? or cancel a distribution center, or cross-docking will affect transportation costs? the lowest shipping cost based on how to determine the components of the extra service the best re- configuration, these are the ERP can not answer, and must give way to the SCM to be resolved.
Fifth, the running speed: SCM Vs ERP
SCM uses a 4th generation resident memory to run the technology, all relevant data is read into memory from the main server, to avoid frequent disk access, this method than the MRP-based ERP operation hundreds of times faster, with faster delivery and decision-making speed and responsiveness, so as to capture and seize market opportunities, seize the ancestors of a chip market. Meanwhile, the visual GUI support advanced navigation features of the supply chain, providing a visual map of the form user interface, the actual supply chain network structure, such as supply and demand, and connect live with a full line of front, it is excellent with the ERP system so that managers can more easily make decisions to achieve profitability.
Sixth, in the transaction processing: SCM Vs ERP
Although SCM has many plans, optimization and decision-making functions, but it does not have some transaction processing and data maintenance functions, such as goods receiving, inventory and a library, work orders / purchase orders issued, the invoice / text block management, accounting management, the project master file / BOM, list maintenance. The ERP can accomplish these functions. Currently, some SCM systems also expanded its capabilities, increased supply chain execution system SCE, by the system to complete the work.