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Ops Gyan Capsule

ERP systems integrate all department functions into a single software application to reduce operational costs from manually tracking data in disparate systems. ERP plays a vital role in supply chain management by enabling planning, purchasing, monitoring, and measuring to combat inefficiency. Vertical integration refers to a firm owning upstream suppliers and downstream buyers, with benefits including improved coordination, profit margins, and entry barriers. Apple is highly vertically integrated, manufacturing custom chips, sensors, and screens, and owning retail stores to control distribution. Optimizing supply chains requires considering global procurement, outsourcing non-core activities, collaborating with suppliers and retailers, using mobile technology, and building responsiveness to changes in demand.

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Mahesh Kundrapu
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45 views4 pages

Ops Gyan Capsule

ERP systems integrate all department functions into a single software application to reduce operational costs from manually tracking data in disparate systems. ERP plays a vital role in supply chain management by enabling planning, purchasing, monitoring, and measuring to combat inefficiency. Vertical integration refers to a firm owning upstream suppliers and downstream buyers, with benefits including improved coordination, profit margins, and entry barriers. Apple is highly vertically integrated, manufacturing custom chips, sensors, and screens, and owning retail stores to control distribution. Optimizing supply chains requires considering global procurement, outsourcing non-core activities, collaborating with suppliers and retailers, using mobile technology, and building responsiveness to changes in demand.

Uploaded by

Mahesh Kundrapu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Enterprise Resource Planning:

ERP or Enterprise Resource Planning is an important enterprise application that


integrates all the individual department functions into a single software
application. ERP Systems make it easier to track the workflow across various
departments. They reduce the operational costs involved in manually tracking and
duplicating data using individual & disparate systems. Advanced e-commerce
integration is possible with ERP systems most of them can handle web-based
order tracking/ processing.
Role of ERP in Supply Chain Management:
The integration of Supply chain management and ERP allows manufacturing and
distribution businesses the ability to gain greater visibility into all operations while
increasing speed, efficiency and overall customer satisfaction. When it comes to
Supply Chain Management (SCM), businesses need to interact with numerous
suppliers and partners in order to obtain the raw materials and resources needed
to bring finished goods to market. ERP plays a vital role in combating inefficiency;
reducing waste and ensuring that workers are better able direct their efforts. ERP
in SCM has several aspects which include:
Supply Chain Planning: This includes the selection of marketing channels,
promotions, determining the quantities of stock and inventory required and
ensuring replenishment and production policies are able to keep up with
demand.
Purchasing, Procurement and Execution
Monitoring and Maintenance
Measurement and Assessment: ERP systems offer superior information
aggregation and organization to ensure that any undesirable variances
throughout the supply chain are quickly identified and effectively addressed.
What is Vertical Integration?
The degree to which a firm owns its upstream suppliers and its downstream buyers
is referred to as vertical integration. Expansion of activities downstream is referred
to as forward integration and upstream is backward integration.
Benefits of Vertical Integration:

Improves supply chain coordination


More opportunities to differentiate
Capture upstream/downstream profit margins
Expansion of core competencies
Increase entry barriers to potential competitors

Apple as the stalwart of Vertical Integration:


Apple Inc. is one of the best-known companies for perfecting the art of vertical
integration. The company manufactures its custom A-series chips for its iPhones &
iPads, custom touch ID fingerprint sensor. It opened up a laboratory for developing
LCD & OLED screen technologies. It has also integrated forward as much as
backward. The Apple retail model, one where the company's products are almost
exclusively sold at company-owned allows the business to control its distribution
and sale to the end consumer.

Further reading: Elon Musk singlehandedly revive a business practice

Optimizing Supply Chain Networks


Once exclusively comprised of internal systems, most supply chains have greatly
expanded due to the proliferation of computer networks and Internet tools and
technologies during the past two decades. These innovations opened the door for
true collaboration between partners, distributors and suppliers that extended well
beyond the four physical (and virtual) walls of the enterprise.
The most recent technology advancements - the widespread usage of Web 2.0 tools
and social networks, on-demand software, cloud computing adoption and the
ubiquity of mobile technologies have served to present further challenges (and
opportunities) for optimal supply chain management.
Manufacturers have been forced to evolve or perish when it comes to optimizing
the processes as well as navigating the new tools and best practices for supply chain
management. Most have become acutely aware of the challenges and trade-offs
that affect their increasingly complex, competitive and transparent supply chains.
At any point in time, an optimized supply chain stays lean, manages costs and
perhaps most critically, responds instantaneously to even minor fluctuations in
demand.
Here are some things that manufacturing enterprises should typically consider
while designing and improving supply chains:
1.
Global through processes to underpin immediate decisions and actions:
Companies increasingly must think in terms of global opportunities for
procurement of goods AND services, and when considering the global needs of the
corporation. Manufacturers should consider multiple channels and determine the
optimal levels of inventory within the echelons of the supply chain process. This is
also critical to consider carbon footprint levels and ensure the greening of the
supply chain.
2.
Focus on Core Strengths and Outsource all other Activities: It is important
to optimize locally to maximize your investments in critical resources:
infrastructure, assets and technology. Many organizations try to do too many
things or don't realize that they can outsource repetitive or tasks or one-off
projects. Focusing on core competencies will help organisations grow their
business.

3.
Improve Collaboration between Manufacturer/Supplier and Retailer for
Demand Data Driven Forecasting and Inventory Management
4.
Utilize Mobile-Based Technology: This technology can help improve field
sales, merchandizing and marketing, and enable direct services to the consumer
(through customized location-based coupons or services that improve employee
productivity in the field).
5.
Build a Responsive Supply Chain: Utilize source data such as POS sales, as
well social media information to identify trends and demand changes much earlier
and enable supply chain to respond faster to increase sales, improve service levels
and reposition inventory to maximize true benefits.
Further Reading:
1. Blueprint for supply chain Optimization
2. New Supply chain optimization opportunities

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