ERP Software

Extended Enterprise Resource Planning Supply Chain Software

An extended supply chain involves everyone who contributes to the supply chain.  For example, if you make Ken and Barbie dolls you need certain materials from your suppliers.  You might need plastic for the Ken and Barbie molds and cotton for their clothing.  The extended supply chain includes the vendor who sells you the plastic and the vendor who sells you the cotton.  Once you’ve created your Ken and Barbie dolls and clothed them, you send them off to a packaging vendor to be boxed in their pretty pink and blue boxes.  Your extended supply chain includes the packaging vendor as well.  Extended Enterprise Resource Planning (ERP) Supply Chain software keeps track of suppliers and vendors and even the suppliers and vendors of the suppliers and vendors.  Wow, that’s a mouth full of words.  Lets break that sentence down, if your cotton supplier is going out of business, you can find another supplier in your extended supply chain by using your extended ERP Supply Chain software to track cotton suppliers.

Many Enterprise Resource Planning vendors offer extended ERP Supply Chain software.  Linking this software with your suppliers is key as this information provides many benefits.  One such benefit is Just In Time (JIT) Management.  JIT management reduces overall company costs.  For example, lets say you spend eight thousand dollars per month to rent storage space where you store millions of Ken and Barbie dolls.  JIT management reduces the need for storage space because you don’t have inventory sitting around.  JIT enables you to fill orders literally “just in time” eliminating that eight thousand dollar per month fee.  With JIT you don’t have to worry about being under-stocked or over-stocked. 

Some companies, like Wal-Mart, require their suppliers to be in their extended supply chain.  In a way, their suppliers much have similar extended ERP Supply Chain Software.  For example, Wal-Mart requires that all suppliers use Radio Frequency Identification (RFID) to tag inventory.  This means that all suppliers need some type of Supply Chain software that interacts with RFID.  Requiring all suppliers to operate with RFID is basically requiring all suppliers to be part of an extended Enterprise Resource Planning Supply Chain Software system.  In Wal-Mart’s case, they operate SAP ERP Supply Chain.  However, their vendors may run some other software, as long as it enables RFID tagging.  Extended ERP Supply Chains can save a lot of time and make all involved more profitable.

Written by :

kristine H