Mid-size companies have discovered that the key to keeping up with the accelerating pace of business today, while also achieving Lean manufacturing and distribution goals, is improved communication with suppliers, partners and customers. They’ve found that easy-to-use collaboration tools can help them dramatically improve business processes, increase customer responsiveness and reach new levels of performance throughout the enterprise.

ERP system

Does your ERP system support Web-based collaboration? (Part 1)

Critical to achieving high levels of collaboration is a Web-based ERP system that supports multiple communication protocols such as XML, UDDI, WSDL and SOAP, and includes Web 2.0 features such as portals and peer-to-peer networking applications and supports interactions with third-party erp applications over the Internet. By providing seamless integration and easier access to data, both internally and externally, Web-enabled ERP streamlines and accelerates workflow and responsiveness and reduces time to market.

Equally critical to achieving high levels of collaboration, however, is convincing a company’s trading partners that they, too, will benefit by adopting Web-based technology. Old habits are hard to break, and no matter how progressive a company is, that doesn’t mean suppliers and partners are ready drop reliance on phone calls, faxes or e-mails. Suppliers need to be shown how investments in technology and automation of business processes to foster collaboration can benefit them as well as help manufacturers manage end-to-end processes in a more efficient and cost- effective way. As business partners, suppliers will also benefit in the form of increased reactivity from the manufacturer and reduced paper-based processes.

Manufacturers, for example need to show suppliers how they can connect to the manufacturer’s ERP system via the web and pick up an automated replenishment order authorized under contract or blanket purchase order. Exchanging purchase orders and invoices electronically speeds up business processes and enables both the business partner and the manufacturer to better manage their supply chain with more accurate data and make better cash management decisions.

Additionally, suppliers can monitor erp vendor-managed inventory and anticipate orders when they have electronic access to inventory stock levels. Instead of waiting for orders to come in, information from the manufacturer’s ERP system can alert the supplier in advance and enable them to respond proactively. By participating in reverse auctions through the manufacturer’s vendor portal, a supplier can be sure they’re not missing lucrative opportunities to sell more product and grow their business.

Suppliers will learn that a vendor portal can provide them with performance ranking information they may not otherwise receive from the manufacturer. Electronic transactions means that performance data is automatically captured by the ERP system, analyzed according to pre-determined KPIs (key performance indicators) tracking delivery, price and quality. Suppliers have a clear picture of their performance and can make adjustments to improve their ratings and increase their chances of gaining more business in the future.

The Web, in effect, has changed everything. And, over time, trading partners will come to embrace electronic collaboration, particularly as standards emerge that enable them to use a single user interface for interaction with all their customers. In the interim, it is incumbent on manufacturers to make the process as painless as possible for their suppliers, and to look for ways to foster “win/win” outcomes.

Continued in Part 2