Dr. Misty Blessley frequently cohosts our monthly OM podcasts from her office at West Virginia University, where she is Associate Professor of Supply Chain management.
In Chapter 11 of your Heizer/Render/Munson textbook, students learn about the Supply Chain Operations Reference (SCOR) model. SCOR entails 6 core steps – Plan, Source, Make, Deliver, Return, and Enable. While the first 5 steps focus on the flow of products and information, the Enable step focuses on the technology, data and infrastructure that support all other supply chain activities. In many ways, when firms enable, they lay the foundation that allows the rest of the supply chain to function effectively.
A recent article in Supply Chain Dive provides an excellent example of the enable process in action. Clorox, the consumer products company known for brands such as Clorox bleach, Pine-Sol, Glad trash bags, and Kingsford charcoal, expects to realize significant supply chain improvements as it completes its transition to a new enterprise resource planning (ERP) system. The benefits include better planning, lower inventory levels, greater automation, and a more responsive supply chain that can react more quickly to changes in customer demand.
But implementing a new ERP system (the topic of Chapter 14) can cause significant disruption before improvements can be realized. The company’s ERP transition began in 2021 as part of a 5-year, $500 million digitization effort designed to replace decades-old technology. During implementation, Clorox experienced fulfillment challenges and incurred additional costs as the rollout progressed more slowly than expected.
Clorox believes those challenges are largely behind it. the firm has integrated business planning into the new system and moved many activities away from spreadsheet-based manual processes toward automated workflows. The payout is expected to be improved demand fulfillment, streamlined order-to-cash activities, and reduced inventory throughout the supply chain.
Enabling capabilities often determine how effectively the entire supply chain performs. Investments in technology, data, and infrastructure may not produce immediate results, but they can create the foundation for long-term operational excellence. ERP systems improve visibility, coordination, and decision-making across organizations. Firms have learned that not implementing ERP can be costly. But just as The Clorox Company experienced, implementation woes are not unusual.
Classroom Discussion Questions:
- Why do you think so many organizations struggle with ERP implementations?
- What should firms do in advance to ease the implementation process?