Overcoming ERP Challenges to Get Accurate Supply Chain KPIs: Insights and Strategies
Updated: Oct 16
What is an ERP?
An ERP stands for “Enterprise Resource Planning” and refers to a type of software system that is designed to help business manage their day-to-day operations, such as accounting, inventory management, human resources, and customer relationship management.
As organizations increasingly rely on Enterprise Resource Planning (ERP) systems to manage their business processes, getting accurate Key Performance Indicators (KPIs) from these systems has become crucial for making informed decisions about the business.
While ERPs are supposed to integrate all of these different functions into a single, centralized system to streamline processes, increase efficiency, and improve data accuracy, in reality, many of them are falling short of expectations.
What Challenges are Supply Chain Professionals Facing with ERPs? One area we see this is in the realm of supply chain. It can be difficult to derive accurate supply chain KPIs from existing ERPs for several reasons.
1. Complexity of data: ERP systems are designed to manage and integrate multiple business processes, such as financial management, human resources, and supply chain management. As a result, they generate a vast amount of data that can be challenging to navigate. Extracting the right data and calculating accurate KPIs requires a deep understanding of the data and the relationships between different data points.
2. Customization ERP systems: are often highly customized to meet the specific needs of an organization. This customization can result in a lack of standardization, making it difficult to extract data in a consistent and reliable manner. For example, one organization may track sales revenue in a different way than another organization, making it difficult to compare the two organizations using the same KPIs.
3. Integration with other systems: Many organizations have multiple systems that need to be integrated with the ERP system, such as customer relationship management (CRM) or supply chain management (SCM) systems. This integration can result in data inconsistencies or duplication, making it challenging to extract accurate KPIs. For example, if an organization is using a separate system to manage its inventory, the inventory data may not be consistent with the data in the ERP system, resulting in inaccurate inventory levels and other supply chain issues.
4. Lack of Training: Calculating KPIs requires a good understanding of the business processes and data within an ERP system. It can be challenging to find employees who have the necessary expertise and experience to extract data and calculate KPIs accurately. Even if an organization has employees with the necessary expertise, these employees may be spread across different departments, making it difficult to coordinate KPI extraction efforts.
How Can I Overcome ERP Complexities to Improve my Supply Chain Performance?
So, how can organizations overcome these challenges and get accurate KPIs from their ERP systems? The key is to work closely with the IT team, ERP vendor, and business stakeholders to ensure that the necessary tools, processes, and expertise are in place. Here are some steps that organizations can take to improve their KPI extraction process:
Define Core Supply Chain KPIs: Organizations need to define the KPIs that they want to track and monitor. These KPIs should be aligned with the organization's goals and objectives and should be specific, measurable, and relevant.
Identify the right data sources: Once the KPIs have been defined, the organization needs to identify the data sources that will be used to calculate the KPIs. This may include data from the ERP system, as well as data from other systems that are integrated with the ERP system.
Use the right tools and techniques: Extracting and analyzing data requires the use of the right tools and techniques. Organizations should consider using data visualization tools such as The Owl Solutions that can help them visualize and analyze their data in a meaningful way.
Involve the right people: Extracting accurate KPIs requires a team effort. The IT team, ERP vendor, and business stakeholders all need to work together to ensure that the necessary data is available and that the KPIs are being calculated accurately.
At The Owl Solutions, we specialize in helping manufacturers cut time, financial and environmental waste from their supply chain.
How do we do it? By leveraging data, insights and actions.
We work with you to clean up and centralize your data in our cloud-based solution. Industry best KPIs are embedded into our supply chain performance platform based on SCOR model.
Our software displays near real-time data in a user friendly, visual way and we provide ongoing monthly support to align your supply chain performance with business outcomes.
You are the star of the show! We just provide the tools needed for you to succeed. Check out what our supply chain stars have said about working with us here.
We have years of experience working with manufacturing companies across various industries. Our team of experts can help organizations define your KPIs, identify the right data sources, and use the right tools and techniques to extract and analyze their data. By working with The Owl Solutions, you can ensure you are getting the best possible outcomes for your supply chain performance.