The primary function of an organization is to be responsive to the demands of the customers and be efficient in production. In order to implement a lean supply chain program, it is important to understand the basic operation processes of the organization. While low cost per unit is always a brilliant idea, but it conflicts the ideas of marketing.
Efficiency is Important for Marketing: Efficiency is the keyword for marketing, while serving customers is regarded as the holistic duty of the sales department. The latter in turn leads to a greater revenue generation and commissions. For large scale production which is not directly linked to the customers, there may be some inherent problems.
Requirement of the Customers all Along the Year: They mainly arise due to fluctuations in the needs of the customers along the year, leading to shortage of the item in times of requirement and excess stock when there is no demand. Moreover, these products require a large amount of capital which is wasted once the products do not sell well in the market.
Production vs. Sale: Therefore need was felt to tie a bond between production and sales. This means, you are aware of the customer demand and can produce effectively those items with optimum efficiency. Customer service is enhanced thereby and leads to greater productiveness and responsiveness. This will lead to lowering of inventory levels in proportion of inventory turns.
Inventory Management System: In any given time framework, the inventory turns will be higher when the speed of the supply chain is high. Moreover, the movement of the raw materials should be high in a supply chain in order to create lesser number of obsolete items.
ERP is essential to augment the development of the company in a positive way. The positive aspect includes an overall growth of the company as regards the position, production, sale, marketing including recent technological outburst in the IT Space. It has been a common observation that companies which are gradually emerging to great heights relied on ERP Management system. The system acted as a ladder for their development process.
The Bottleneck of the Process:
The process, in spite of its extreme high efficiency has a bottleneck of disconnected internal scheduling process and external suppliers. This is perhaps the greatest blessing of IT that through ERP Management System, one can remove the disconnection through technological means.