Creating an Integrated Supply Chain with Manufacturers and Packaging Provider Through the Coupling of ERP Systems (3/4)

It can be challenging to create an integrated supply chain with multiple manufacturers and the packaging provider. However, it is not impossible, and the benefits of integration far outweigh the challenge. ERP systems improve information flow between supply chain companies, which is very important for exchanging products, money and information.

What is Global Supply Chain Management?

Global supply chain management is a number of business processes that are mutually related:

• Customer Relationship Management (CRM) that helps companies identify their customer needs to ensure they are able to efficiently meet those needs for improved customer retention and loyalty. CRM brings the assumption that for companies to maximize income from their customers, they must maximize customer satisfaction.
• Service management allows for the possibility of continued monitoring of product availability, delivery dates, and delivery availability. Through this process, the CRM initiates replenishment, procedures are planned to determine method of delivery, and supervision of the customer’s products.
• Demand management customizes manufacturing availabilities in response to customers’ expectations based on advanced demand forecasting techniques.
• Orders realization integrates manufacturing, logistics, and producer’s marketing plans to maintain positive relationships with supply chain suppliers, which provides added value to customers and reduces costs connected with supplying products to the market.
• Manufacturing flow management is directly related to flexible product manufacturing, quality management, analysis of reasons for deviations, and continuous control of inventory levels.
• Supplier Relationship Management (SRM) identifies and builds close relationships with crucial suppliers.
• Development and product sale that attributes to the expedited delivery of a new or improved product to market.
• Complaint management which is an important part of SCM that can help suppliers achieve a competitive advantage.

Integrated Supply Chains for Real Time Information for All

An integrated supply chain between manufacturers and their packaging providers gives all companies real time information, such as suppliers’ production and delivery schedules. This then allows buyers to improve their production plans and delivery schedules. Meanwhile, suppliers, including packaging providers can then use the buyer’s real time store level to plan their inventory levels and production schedules.

The sharing of order status information among all supply chain partners helps to:

• Improve customer service quality
• Speed up the payment cycle
• Provide cost savings

Information is treated as a common resource between all supply chain partners, instead of being used by just one company as their personal strategic resource. It is a cooperative effort between all partners that depends on common planning and awareness of their individual undertakings. Therefore, everyone in the supply chain links such information as:

• Needs and demands of customers
• Level of stock in warehouse
• Manufacturing planning
• Expected demand

Internet Facilitates Integration of Multiple Partners to Supply Chain

The Internet helps facilitate the processes involved by allowing ERP supply chain partners to share essential information, including order status, product schedules, and sales records. These data allow the integration of major supply chain processes, and marketing promotions, plan production, and logistics. Because these transactions and processes all occur through the platform, they are paperless, thus contributing to greener processes that help protect the environment.

Integrated ERP systems allow supply chain partners to work collaboratively. Sharing information about what kind of product is being demanded, how much is available in the supplier’s warehouse, what is involved in the manufacturing process, and what will be entering and leaving the supplier’s physical facilities and customer locations are critical in managing supply chain activities. Knowing where a supplier is at in terms of orders, anticipated orders, and inventory levels allow packaging manufacturers, like Desjardins to better anticipate and meet their needs for packaging. This helps prevent bottlenecks that cause delays that lead to dissatisfied customers.

References and Further Reading

• "ERP Integration as a Support for Logistics Controlling in Supply Chain (2011)" , by Adam Koliński and Paweł Fajfer