Today’s manufacturing and supply chain planners and managers are inundated with concepts and strategies purporting to add value to their overall value chain. Whether it’s integrating intelligent planning systems or working to streamline their manufacturing processes from procurement to production, manufacturing companies must seek value in any number of ways in order to remain competitive and agile in an increasingly global marketplace.

One place where manufacturing companies have been comparatively slow in realizing and leveraging value is enterprise resource planning (ERP), or more specifically, adopting a postmodern ERP mindset. Whether it’s because the lack of visibility surrounding these concepts or a failure to fully embrace them as part of lean manufacturing and supply chain management, postmodern ERP is perhaps one of the most least understood or realized element of manufacturing and supply logistics. Not only does postmodern ERP have the potential to transform a company’s manufacturing and supply logistics, but it’s a key element in cutting the complexity of global supply chain management and leveraging enhanced operational functionality.

We’ve discussed a great deal on this blog about the elements necessary for optimizing or enhancing global supply chain management and logistics. These elements vary from effective communication and breaking down cross-functional silos to the deployment of critical technology platforms such as Industry 4.0, advanced analytics, and Big Data. However, we’ve devoted very little time to examining the flipside of this coin: The factors associated with global supply chain management which significantly hamper or even derail your production and supply streams.

While the most detrimental factors to effective supply chain management have shifted and evolved during the last decade alongside the platforms and strategies planners and managers deploy, many of the fundamental aspects as to why a supply network succeeds or fails have remained since the 1990’s and early 2000’s. Point being: While staying on top of new technologies or software solutions can be difficult, understanding and addressing the critical challenges and pain points is a much simpler task given these elements have stayed unchanged throughout recent times.

There are some terms or concepts in today’s modern supply chain management landscape that even industry insiders have difficulty defining or understanding. Whether it’s because the lack of visibility surrounding these concepts or a failure to fully embrace them as part of lean manufacturing and supply chain management, postmodern ERP is perhaps one of the most least understood or realized element of manufacturing and supply logistics. Not only does postmodern ERP have the potential to transform a company’s manufacturing and supply logistics, but it’s a key element in cutting the complexity of global supply chain management and leveraging enhanced operational functionality.

The question becomes: Why is postmodern ERP such an important value proposition for global manufacturing companies lacking visibility and understanding? What is it about postmodern ERP that proves difficult for planners and managers to embrace? What do we mean when we use the term postmodern ERP?

We’ve discussed in great deal on this blog the elements that comprise effective supply chain management and how automotive manufacturers can leverage technology and strategy for lean management of their supply stream across the entire value chain. But what hasn’t discussed in much detail is how manufacturers starting from square one can best structure their supply networks and the decisions and considerations involved in such an enterprise.

The modern automotive supply stream is a variant-rich network of players with inherent risks and volatilities. However, the right supply chain architecture can provide a significant for value proposition for companies in cutting through the complexities of global supply and manufacturing and reducing the risk involved with doing business on such a grand stage. While technological advancements such as Industry 4.0, The Internet of Things, postmodern ERP,  and advanced analytics can streamline supply chain management, the right structure for a company’s goal, outcomes, and objectives is a crucial first step in engineering supply efficiency and productivity.

Ask any automotive supply chain planner or manager about their top priority in supply chain management and you’ll hear the same thing: The need to cut the complexity of today’s increasingly global, interconnected supply stream and enhance the ability to meet the demands and desires of customers across all corners of the world. While the need to cut complexity is perhaps the most important task for OEMs and suppliers, it can also be extremely difficult given the two most common methods of supply chain integration in today’s landscape: vertical and horizontal. 

But in the last few years, a new brand of automotive supply chain integration has developed that allows companies to effectively leverage the most effective, integral elements of both vertical and horizontal integration. Vertizontal integration, or the merging of several aspects of  vertical and horizontal strategies to foster a lean supply and production strategy, has emerged as a key driver in automotive supply chain management and a critical tool for success in such a variant-rich industry.

How does your organization approach enterprise resource planning (ERP)? Not so long ago, ERP was completely absent from supply chain management strategy. Today in many organizations ERP dominates software solutions. But innovative supply chain leaders are adopting a new approach to ERP, one that goes far beyond "best of breed." This postmodern ERP fosters strategic collaboration between business and IT leaders and sets organizations on the path to thriving in the Industry 4.0 environment. 

On a recent cross-country flight, I was seated next to a supply chain manager for Company X who, after furiously typing away on his laptop for an hour or so, expressed concern about his company's current ERP (enterprise resource planning) solution and strategy and whether it was well-suited to meet the demands of today’s global supply chain.

This planner told me his biggest fears about his company's ERP model was its ability to remain lean, agile, and cost-effective in conceiving and implementing planning solutions and strategies. This planner is not alone in his anxiety. A recent Gartner survey indicated ERP efficiency ranked fourth overall among the top concerns of manufacturers and suppliers.