Monday, June 4, 2012

Automated Store Replenishment – Volume XVI


The term Enterprise Resource Planning (ERP) is as much a process as it is a system. Like so many terms coming out of the information technology industry, ERP is one born to be bastardized, and the retail industry receives more than its share of wild claims and hyperbole when it comes to issues involving data processing.

Systems like SAP R/3 and Oracle Applications consist of many software components which provide specific functionality. One of their greatest advantages is ‘forced’ reevaluation of methods and practices. However, most ERP systems are designed as an all-in-one solution, often implementing functionality that is not needed. A true ERP system relies on very large-scale infrastructures like servers and networking technology, which are extremely expensive to install and maintain. You just do not go out and buy an ERP system, install it and expect it to work out-of-the-box. You can get close for a time, but as I said earlier, it must evolve to satisfy a unique company’s, ever-changing requirements.

In 1983, as we switched from desktop computer technology to IBM mainframe technology, our aim was to create an ERP system for the retail/wholesale gasoline and c-store industry. It wasn’t until 1986 that we were able to completely integrate our applications into a large, centralized database environment created from the requirements of forty wholesale/retail customers in the unique industry we continue to serve today—but we weren’t done yet. Each customer had a slightly different version of the database, so new releases had to be created and modified for almost every client.

In order to satisfy forty unique businesses, even when they operated in the same industry, it became a give and take situation from the beginning. We had to change, and the companies using our ERP solution had to change as well. What we actually ended up with were three or four versions of like solutions, because no two businesses are identical.

Is it possible to write one application to satisfy forty unique businesses? Yes, it is, but only if those businesses agree to operate similarly; and there are always problems, because situations outside of a company’s control, such as the way local taxes are charged and collected, sent us back to the drawing board time and time again.

Major changes took place between 1989-1991, with the release of the new IBM AS400 computer, when all of our applications had to be rewritten again to take advantage of the relational database environment offered by the new computer. However, it was the key that led us into Cloud Computing in the year 2000, when yet another rewrite occurred as we faced that migration… but not nearly so drastic.

It is no stretch when I say, “As technology evolved, the retail industry did not evolve with it;” primarily because of costs, and secondarily because of the advancements in marketing techniques, where the best-known software providers get the lion’s share of the business, whether or not they truly deserve it. If we are required to change, it is only natural to pick our change based upon the requirements of the majority and this alone can spell disaster.   

However, tomorrow’s software solutions will be driven by Key Performance Indicators (KPI), and will not work to the client’s advantage unless servers, networks, and infrastructures are integrated up and down the supply chain; and this means setting concrete goals and objectives with the accuracy of inventory being the keystone of a successful system.

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