Supply Chain Experiences

by | Dec 10, 2012

I recently completed an academic refresher course through a local University. I admit I was much more engaged than my undergraduate days because every topic we covered was actually relatable to my present supply chain experiences. The session that I felt resonated most, was on Operations Management by Sanjeev Bordoloi, PhD. The information provided confirmed the high level of importance for streamlining processes and utilizing integration as much as possible.

Operations Management was simply defined as inputs go through a transformation to produce outputs. Now this sounds easy enough, except for the fact that you have dozens of non-communicating systems along the way carrying vital information.

For simplicity’s sake, a typical company will have some form of EDI, an accounting system, and a warehouse management system. There are many issues if these systems are not integrated with each other. Companies are spending resources manually entering orders, invoices and shipping information twice. This causes issues with not only a significant time delay but also the inevitable fat fingering in which your warehouse just accidentally picked and packed 200 widgets instead of two. It is also important to factor in the wasted opportunity due to valuable resources being busy with data entry, printing documents, and physically taking them to someone else. It just sounds like a story my Grandmother would tell me; “Back in my day, I had to print orders on the copier and then walk them to the warehouse.” Slightly dramatic, but I would compare this to placing employees in one room and then storing their computers in another.

Now imagine if your purchase orders flow automatically into your accounting system, then into the warehouse for the immediate ability to process. The reverse happens as well. All of that warehouse data, often required by retailers via EDI, goes directly back to the accounting and EDI systems. Invoicing is now keyed one time, along with a reduction of errors. Obviously, there is an investment into integration but I recommend taking the time to calculate the ROI. More often than not, it is worth it.

SPS Commerce Blog Team

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