For decades, forward-thinking supply chains were defined by how robust their investments into Enterprise Resource Planning (ERP) and Product Lifecycle Management (PLM) was. In the early days of supply chain digitization, these SCM software systems provided increased visibility and data pools to improve supply chain operations.
As time has gone on, antiquated ERPs and PLMs have become a drain on supply chain resources and a bottleneck to scalable digitization. As we look forward to the next-generation of the digital supply chain, businesses will need to invest in configurable supply chain management platforms to unify their current tech stack or displace investments into legacy systems.
Let’s define these three terms to create a clear understanding of what each system includes.
What is an ERP?
An ERP system is a technology or software that businesses leverage to manage the processes and data across several business functions. These functions can include accounting, project management, operations, and forecasting, to name a few. A company’s executives typically use ERP systems to make decisions and report out to internal stakeholders on the state of operations and future forecasts.
What is a PLM?
A PLM system allows companies to track the processes and stages of a product’s journey from concept to finished goods. Consumer good companies often leverage PLMs to manage the product development stages of the product lifecycle. Some PLMs also allow a company to build out a digital library for technical documents and materials leveraged across products.
What are Supply Chain Management Platforms?
Supply chain management platforms are horizontal solutions that connect the entire value chain from product conception and development through distribution and sales. Often offered as a product suite, SCM software platforms offer configurable functionality to address users’ needs.
When companies implement a supply chain management platform, they create a digital backbone that extends across all operations without gaps in visibility, transparency, communication, and collaboration.
The Problems with ERP Systems
ERP systems have dominated the supply chain software space for decades. However, these systems’ infrastructure does not allow companies to scale with the needs of modern supply chains. When many of these solution providers initially built today’s leading ERP systems, it was for a select profile of users and without the assumption that they would need to integrate with future tech investments.
Therefore, ERPs often require thousands of dollars to implement, maintain, and train new users on with the data becoming siloed and hard to sift through for intuitive reporting. ERP systems may solve temporary reporting needs for fast-growth companies but do not have a scalable future to support fast-paced supply chains.
The Problems with PLM Systems
As mentioned earlier in this article, PLMs often focus on the early stages of product conception and development. However, with most PLMs, this is about as far as the system extends. If a system does cover more of the product lifecycle, it does not allow users to drill down into the individual stages and phases.
While PLMs are great to manage those early stages, it is not a solution to handle end-to-end operations. The data from product development needs to be married with sourcing and production data to ensure that the reports tell the whole story.
Why Supply Chain Management Platforms are the Solution of the Future
The new generation of supply chain management platforms eliminates the hassle and the headaches caused by legacy ERP and PLM systems. Platforms address the gaps left behind by siloed systems to unify stakeholders at every level, provide real-time visibility, streamline operations, and run real-time reports for smarter forecasting, vendor assignments, and more.
They also digitize previously manual and on-location tasks to allow supply chain leaders to stay competitive in today’s remote and virtual world with improved lead times and lower overhead costs. The best SCM platforms also offer open APIs and SDKs to allow for integrations with existing tech stacks to pull all data in a single system for simplified reporting and more robust data integrity.
In today’s digital world, the need for a robust and functional supply chain tech stack is crucial for business success. While ERPs and PLMs have long dominated the supply chain software space, they no longer fit modern supply chains’ needs as standalone solutions.
Supply chain management platforms offer the flexibility, connectedness, and visibility required for supply chain managers to implement data-driven value chain strategies. SCM software also allows businesses to scale their supply chain operations while reducing costs and improving speed to market.