Why ERP and PLM are no longer standard SCM software!

For decades, forward-thinking supply chains were defined by how robust their investments in enterprise resource planning (ERP) and product lifecycle management (PLM) were. In the early days of supply chain digitization, these SCM software systems provided greater visibility and data pools to improve supply chain operations.

Over time, legacy ERPs and PLMs have become a drain on supply chain resources and a bottleneck for scalable digitalization. As we look forward to the next generation of digital supply chain, companies need to invest in configurable supply chain management platforms to unify their current technology stack or to shift investments to legacy systems.

Let’s define these three terms to provide a clear understanding of what each system entails.

What is an ERP?

An ERP system is a technology or software that companies use to manage the processes and data across multiple business functions. These functions can include accounting, project management, operations and forecasting to name a few. A company’s executives typically use ERP systems to make decisions and report to internal stakeholders on operational status and future projections.

What is a PLM?

A PLM system allows companies to track the processes and stages in a product’s journey from concept to finished product. Consumer goods companies often use PLMs to manage the product development stages of the product lifecycle. Some PLMs also allow a company to build a digital library of technical documents and materials that are shared across products.

What are supply chain management platforms?

Supply chain management platforms are cross-sectional solutions that connect the entire value chain from product conception and development to sales and distribution. SCM software platforms are often offered as a suite of products, offering configurable features to meet user needs.

When companies implement a supply chain management platform, they create a digital backbone that spans all operations with no gaps in visibility, transparency, communication, and collaboration.

The problems with ERP systems

ERP systems have dominated the supply chain software space for decades. However, the infrastructure of these systems does not allow companies to scale with the demands of modern supply chains. When many of these solution providers originally developed today’s leading ERP systems, it did so for a chosen user profile and without the assumption that they would need to integrate with future technology investments.

As a result, ERPs often require thousands of dollars to implement, maintain, and train new users because the data is siled and difficult to search for intuitive reports. ERP systems can meet transient reporting needs for fast-growing businesses, but have no scalable future to support fast-paced supply chains.

The problems with PLM systems

As mentioned earlier in this article, PLMs often focus on the early stages of product conception and development. However, for most PLMs, this is roughly the range of the system. When a system covers a larger part of the product lifecycle, it doesn’t allow users to break down each stage and phase.

While PLMs are great for managing those early stages, it’s not a solution for handling end-to-end operations. Product development data needs to be linked to sourcing and production data to ensure reports tell the whole story.

Why supply chain management platforms are the solution of the future

The new generation of supply chain management platforms eliminates the hassles and headaches caused by outdated ERP and PLM systems. Platforms close the gaps left by siled systems to unify stakeholders at every level, provide real-time visibility, streamline operations, and run real-time reporting for smarter forecasting, supplier assignments, and more.

They’re also digitizing previously manual and on-site tasks so supply chain leaders can remain competitive in today’s remote and virtual world with improved lead times and lower overhead costs. The best SCM platforms also offer open APIs and SDKs to enable integrations with existing tech stacks to pull all data into a single system for simplified reporting and more robust data integrity.

Conclusion

In today’s digital world, the need for a robust and functional supply chain tech stack is critical to business success. While ERPs and PLMs have long dominated the supply chain software space, they no longer meet the needs of modern supply chains as standalone solutions.

Supply chain management platforms provide the flexibility, connectivity, and visibility supply chain managers need to execute data-driven value chain strategies. SCM software also enables companies to scale their supply chain operations while reducing costs and speeding time to market.

Written by Lizzie Sessa, Senior Manager of Product & Content Marketing at Suuchi Inc.

SCM software article and permission to publish here provided by Irina Kapetanakis. Originally written for Supply Chain Game Changer and published on March 25, 2021.

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