20 ERP systems


to make the transition to new technology. Immature markets have the advantage of being able to take a clean sheet approach. “Many companies in the West have systems in place


frombeforeY2K, now14 or 15 year old systems,” he says. “Therehavebeenalotof changes inbusinessmodelsand processes over that time. So they are trying to adapt and make their own solutions fit what are totally new businessmodels andprocesses.They are trying toextend the life of their systems.” A white paper produced by Manhattan Associates


suggest thatmost legacy systems are outdated, barely fit for purpose and to all intents and purposes, often obsolete. However, the vastmajority of retail businesses still rely on “old supply chain systems that inhibit potential growth, limit innovation and introduce risk to the business”. The company says, retailers will need to be able to


switch on new channels as they emerge and be able to offer amatrix of service options for customers to choose from across blended channels – whether it be “order online, collect from store”, “buy online and return to a store” or even “buy online for same-day delivery froma local store”. Dominic Regan, senior director logistics product


businessdevelopment,OracleEMEA, says:“Traditionally people have looked for point solutions to solve particular supply chain problems, and have then sought to integrate those solutions into their ERP, sharing information in a batch or near-to-real-time basis.Others have taken an ERP centric approach – using the capabilitieswithin the ERP.”


Fragmented landscape He believes global companies would, in an ideal world, like tohave a singleERPsystembuthavebeenhampered by a fragmented IT landscape, the result of corporate acquisitions and divergent purchasing decisions across divisions. Regan’s view is that, “customers are becoming much


more process-centric in terms of howthey look at supply chain. So rather than looking at individual silos, they want to look at the processwhichmight be, for example, combining S&OPwith financial analysis, or various areas of supply chain execution,” he says. “This places a requirement out there to be much more flexible in how you share data and to share it in amuchmore timely and granular fashion.” Reganoffers the example of a large company looking at


transport, where there is a common requirement across different geographies and ERP systems, and where the company wants to present a single face to carriers, suppliers and customers. “It [the solution] should be transparent tothem[suppliers andcustomers] regardless of which division they are talking to,” he says. “The transport module should present that single face, by taking a process centric view – where this is a common process across the business,” he says. “ERP is the price of entry for running a business,” says


John Hamman, industry principle for manufacturing at SAP.Hepointsout that SAPis the single largest enterprise application in the softwaremarket, and it is “changing to make sure it cansupport important processes”.However, he says, “business processes don’t start or stop at a definite line”. LikeRegan,heidentifies themarket focusonprocesses.


“If you look at plan to deliver, procure to pay, or order to cash, theseare importantbusinessprocesses thatneedto be supported,” saysHamman. Theway forward, he points out, is through in-memory


technologies, as used in SAP HANA. “We are able to support both transaction and analytics from within the sameplatform,”hesays.Lookingat this technologyinthe context of supporting a supply chain with material planning,he explains that theprocess isusuallybasedon a periodic “material requirements planning” (MRP) run using “out-dated” information. “The ability to re-plan quickly is not usually easy


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because of the long times to run. But we have seen reductions of 50 per cent in some instances, because of the in-memory capability being able to accelerate calculations that support things like the stock requirements lists,”Hamman says. “There is a faster reaction to demand changes, so you


can reduce stock outs. Also, you becomemore agile and get information to people faster,” he adds.Würth Group and Lenovo are using the technology. One advocate of In Memory Analysis (IMA) is Relex.


The company took the decision back in 2007 to develop its own database, one specifically designed for supply chain applications. “IMA bypasses the hard drives and holds all the data it needs and performs all its calculations in the active memory – the chipsets or DRAM,” says RelexUK countrymanagerTommiYlinen. He says: “Others have been slower to introduce IMA


than we’d anticipated, and the charges have sometimes been high, not least because with many systems it involves buying in a proprietary database and that is often expensive. It’s something that we include along with our system. Itmeans that we canmake in-memory analysis of big-data cost effective for companies outside the Global 1,000; indeed itmakes it readily accessible to mostTier 1 andTier 2 businesses.” Kewill’s Dalziel says: “More and more companies are


We are probably about three to five years away from SaaS being adopted widely...


moving to SaaS-type subscription based environments. Thatmay be partly due to the economic situationwhere people want to keep costs off the balance sheet and get up-and-running with a lower up-front investment and less of an internal resource requirement.” The view fromRegan is: “A few years ago people were


nervousaboutputtingsupplychaindataout inthecloud. But I think that attitude is changing. For procurementwe are seeing far wider adoption of SaaS basedmodels, but for supply chain planning and execution attitudes are slightlymore conservative.We are probably about three to five years away fromSaaS being adoptedwidely across different industries and geographies.”


Sub-hubbing Nigel Illingworth, chief executive officer for Merret at Retail Assist, sees the expansion of retail organisations into international markets as a major development, impacting systems requirements. “Sub-hubbing is a new move,” he says. “People used to bring things in fromthe Far East to the


UKand then end up pumping it back out again. But now they are being more intelligent about splitting orders – moving themajority of stock into the UK or Europe but moving a small amount from the Far East into a warehouse in, say,Australia, rather thansendingfromthe Far East, back into theUK and then out to Australia.” He sees retailers taking aphasedapproachwithregards


to technology for their internationally expanding businesses. “The first phase is creating a transactional web-site, thesecondphaseisputtinglanguageintoit.But what people haven’t been doing, especially in tier two retail, is using multiple warehouses to achieve efficient distribution,” he says. Illingsworth also points out that retailers are now


looking to become more dynamic with their pricing, which requires smarter systems. “Retailers have tended to have one price for a product and have used a blunt exchange rate mechanism. Merret is more market channel orientated, so you may say this product in the UKmay stand a price of £10, but itmight bear a price of $20 in theUS, butmaybe inChina it has an equivalent of say £8. So youarenot looking at exchange rates,butwhat themarket can stand.” Keith Rogers, a senior consultant at The Logistics


Business,believes the future ismobile.“Everythingwedo points to portability and the need to access information wherever we are. By nature the supply chain executive works in a portable world, and accessing their solutions whenever andwherever they are has provided themwith the ability to monitor detail and make decisions in a muchmore dynamicmanner,” he says.


April 2013 Supply Chain Standard


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