April 10, 2017

The Top 7 Strategic ERP Goals

ERP Goals Notebook Image

Perhaps no other business sector is more accustomed to change and adaptation than the fashion and apparel industry. However, this fast-moving industry faces its own set of challenges in the race to remain agile, responsive and keep up with customer demands. Speed to market is king. That means the apparel industry will need to focus and prepare to continually rethink and reorganize its enterprise resource planning processes (ERP) to stay ahead of the curve.

ERP is commonly known as a category of business management software—typically an integrated suite of software applications—that an organization can use to collect, store, manage and interpret data. ERP will continue to serve as the core business processes, used as a cohesive element to optimize efficiency, support increasingly complex supply chain, production and distribution strategies.Each year, CGS conducts an annual survey to capture and assess trends, challenges, best practices and priorities that will impact fashion supply chains in the year to come. In its most recent survey, CGS interviewed 70 business leaders and key influencers in apparel and manufacturing responsible for driving operational excellence for their brands.

According to the survey, 76% of ERP decision-makers said their business intelligence has the greatest impact on their companies. Leveraging their ERP systems for real-time analytic insight provides for companies a centralized view of supply and demand across all distribution channels, including e-Commerce, wholesale partners and brick-and-mortar stores.

Here are the Top 7 ERP goals, ranked by respondents:

#7 Nearshoring/Outsourcing of Business Processes - 3% More and more businesses are discovering that outsourcing with a strategic long-term global partner helps businesses stay focused on their core business objectives while lowering internal costs and providing a nimbleness that allows them to scale up or down as business needs and requirements change.

#6 Reshoring/Domestic Manufacturing - 7% Some companies that shifted to full package sourcing are now returning a portion of these programs to in-house manufacturing, as they are discovering benefits by manufacturing closer to home. Local manufacturing allows for faster turnaround time in bringing a product to market, as well as improved efficiencies (manufacturing in China and India may be cheaper, but domestic manufacturing in some cases has proved more efficient).

#5 Compliance - 20% To be successful, companies need to align business processes, analytics and technology to streamline their supply chain while also meeting regulatory standards and vendor compliance goals. Leveraging ERP provides a centralized view of demand and supply across all distribution channels to fulfill industry standards and meet customer needs.

#4 Get the Product Mix Right - 45% Brands want a demand-focused approach to planning that assures they are manufacturing the right items at the right volume. ERP can identify when products are on-trend, signaling when there’s a need for a possible shift in a company’s distribution or spend strategy. A demand-focused approach allows companies to set goals, gain consumer insight and decrease discounting while increasing sales.

#3 Managing and Reducing Costs - 68% As consumer expectations for instant gratification becomes the norm, companies are pressured to modernize their supply chains, which may lead to spending in new areas, specifically BI. However, having the right analytics in place enables companies to aggregate, slice and segment data to their needs, leading to operational cost reduction, better profitability and the ability to manage supply chain risk more effectively.

#2 Finding New Areas of Growth - 72% With business intelligence and analytics, companies are gaining better insights and transparency into new areas of growth. We see some companies shifting their distribution strategies between eCommerce, brick and mortar and wholesale, while other companies expand into new markets or venture into global markets, based on big data to maximize sales.  

#1 And finally, Business Process Reengineering - 85% was identified as the top business priority for reshaping ERP strategies. As companies look to be more efficient and transparent, business processes need to be evaluated along with ERP to yield maximum results. The key to BPR is starting with a clean slate, removing older, outdated and often manual business practices in favor of new processes that meet current and future business goals.

Topics

ERP