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Getting started with supply chain management (SCM) business intelligence (BI) integration

More manufacturers are looking to integration between SCM and BI to better analyze supply chain data. SCM vendors are responding to the push for SCM BI integration by adding built-in or add-on BI modules.

As manufacturers grow more sophisticated in their use of business intelligence (BI) technology across the enterprise, so has their interest in leveraging BI analytics and reporting for supply chain management (SCM) through SCM BI integration.

In fact, considering the massive amount of data that an SCM system can produce, having business intelligence (BI) to analyze the data is very important -- and the application of the two are closely related, according to Anil Gupta, CEO of consulting firm Applications Marketing Group.

"It is like the process of making a plan; if you want to be successful you have to have history --- information -- so you know what worked and what didn't," Gupta said. With SCM and BI, if you don't have good analytical capability for all your supply chain information "you will have very little visibility into key performance indicators (KPIs) and without that you can't really plan."

Historically, SCM and BI have involved separate systems, which meant integration of the two was typically a complex, individually tailored process. As a consequence, few companies bothered.

Today, vendors such as SAP offer built-in or add-on modules that can handle supply chain performance management and track KPIs. "Using those things you can really fine-tune supply chain activities," said Gupta, noting that next generation systems may include even wider integration across planning and execution platforms within the SCM domain.

Thanks to these changes, BI is helping to improve various business processes and collaboration with customers, vendors and others. BI can also help enhance customer service, reduce inventory levels and cut costs.

However, if you are using an older, legacy SCM system, those benefits may be elusive. Though it is still possible to run analytics "on top" you will have to work across systems and interfaces. In many cases, the most practical form of integration will be through a manual approach of monitoring information and reentering data.

"Clearly the message is to try to get these capabilities within one vendor environment, Gupta said. "That's much easier to manage and is much more practical."

About the author: Alan Earls had his first exposure to computer programming on one of Digital Equipment Corp.'s PDP-8 minicomputers. He went on to serve as editor of the newspaper Mass High Tech and is the author of the book Route 128 and the Birth of the Age of High Tech, a photographic essay on a key part of Massachusetts economic history. He currently is a freelance writer, covering many aspects of IT technology and writing regularly for SearchManufacturingERP.com.

This was last published in February 2010

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