White Paper: Smooth Running Supply Chains Start With The Right ERP System: Is Yours Designed For Your Industry?

By Fullscope

From an applications software perspective, the consumer packaged goods (CPG) industry faces a dilemma. Most of these companies continue to rely on enterprise resource planning (ERP) systems as a transactional backbone, yet require additional products for supply chain optimization and execution. Why? Many ERP systems are not designed to address the core tenets of process manufacturing, and most non-durable CPG companies have process-based manufacturing and distribution activities that have very specific requirements. These companies are forced to take ERP systems designed for discrete operations and retrofit them with additional products to support their process-oriented operations. This is not the case for all ERP systems. Microsoft Dynamics AX 2009 and Process Industries for Microsoft Dynamics AX 2009 address many of the core ERP and supply chain execution requirements required by non-durable CPG companies. This positioning paper will attempt to describe the problems faced by non-durable CPG companies and how Microsoft's products help solve them.

If an ERP system has a process manufacturing component or base, like Process Industries for Microsoft Dynamics AX, it is highly likely that the ERP system will handle many of the non-durable CPG industry's execution requirements. However, keep in mind that a business-to-business food supplier has a very different supply chain than a food company that serves the business-to-consumer market. The first one is supply-centric; the second one is demand-centric. Microsoft Dynamics AX can help both types of food companies, but different features will be important to each one.

Managing the demand chain is key for non-durable CPG companies. As indicated by the aforementioned issues, many problems start with the ERP system, including managing formulations, packaging, labeling, cost control, pricing, new product introductions, perfect orders (orders delivered with the right product, right time, right mix, right packaging, right quality and right shelf life at the store level), promotions, deductions and billing. The demand chain starts at the order management module of an ERP application. Starting with this module, this section addresses features and functionality in Microsoft Dynamics AX to help non-durable CPG companies address the industry challenges identified earlier.