By WardQuarles-Oracle on Jul 28, 2015
By Barbara Verble, Manager JD Edwards Information Development
In just a few years, the Internet of Things has exploded across the technology world and beyond. For businesses running on ERP systems, the Internet of Things is no longer just a futuristic idea, but a clear and present opportunity. It’s not the proverbial elephant in the room because the techie and business blogosphere can’t STOP talking about it.
What about the Internet of Things and ERP? Yes, we’re talking about that too – a lot! Lots of ideas, lots of use cases are being floated and experimented with. Yet, argues Gartner’s Jim Tully, while business cases “almost certainly” exist, they are still waiting to be articulated and quantified by companies looking to deploy the Internet of Things in a way that benefits their business.
So perhaps it’s time to go back to the basics: What is the rationale for implementing an ERP system in the first place? Isn’t it to gain operational efficiency, for example by reducing cost and enhancing productivity? If that’s true, then improved operational efficiency is also a good starting point for considering an Internet of Things deployment. Yes, the business case will need to get more specific than that eventually, but for starters, making today’s ERP work better is a worthy goal.
The idea of just making ERP work better may actually be an understatement. When we start looking at the capabilities inherent in connecting operational and informational technology, the IoT-powered ERP looks more like ERP on steroids: Sensors, beacons, and other devices embedded in manufacturing, maintenance, and logistics processes can provide the data and data volume that will exploit the power of ERP systems in ways never possible before – in real time.
Internet of Things use cases are being developed for many aspects of ERP, but perhaps none more so than for manufacturing. Some examples:
- Forecasting demand as accurately as possible is one of the holy grails of ERP with accurate forecasts translating into profitability. Imagine a manufacturer of consumer products who is able to translate real-time data on the sale of products into immediate adjustments of production volume. On-demand manufacturing has been around for a while, but the ability to update demand constantly to avoid over-or underproduction has not. According to a Cap Gemini supply chain study, consumer demand has increased in volatility dramatically. Therefore the ability to act on real-time consumer purchase data could have an enormous impact on the manufacturer’s bottom line.
- Getting immediate feedback on the purchase of consumer products would benefit not only the manufacturer but also retail and transportation. The retailer can order and manage inventory with greater accuracy and the logistics company can adjust routes and destination based on demand.
- Related to the framework of adjusting production to real-time demand information is the process for adjusting the component supply on the production line. As a result of demand adjustments, the required number of parts for a production can be reset and the replenishment process regulated by sensors that detect the volume or weight of parts and initiate replenishment processes accordingly.
- Production can be maintained with minimal interruption if the machines are equipped with sensors that provided early warning of performance degradation and schedule maintenance and a shift to other production lines to avoid production disruptions at critical times.
- Finally, there is the other holy grail of ERP – quality. As Mike Hitmar discusses in a recent IndustryWeek article, the Internet of Things offers several avenues for quality improvements beyond the production process itself. For example sensors attached to the product could be used to keep tabs on the product after it’s sold. These sensors would provide targeted maintenance feedback and services and thus maintain customer satisfaction.
All of these scenarios are central to the ERP space. Not many would dispute the benefits of upping the game on these use cases. The main challenges revolve around the “how,” not the “why” of these applications, that is, the best way to make the collected data available to the ERP system to generate appropriate action.
Enter the JD Edwards EnterpriseOne Internet of Things Orchestrator. JD Edwards is going to market with Internet of Things technology that provides a seamless, powerful integration of operational and information technology. Without limiting our customers to specific applications, such as sketched on the examples above, JD Edwards provides a tool that “hears” the vast amount of sensor “sounds,” filters out the “noise,” and creates a sound score that the ERP system understands, records, and turns into the “music” of targeted action.
Yes, ERP has been around for a while, and it’s tried and true in many ways. However, this old dog is learning some great new tricks, and you, your customers, and your employees benefit.
Find detailed information on Oracle’s JD Edwards EnterpriseOne Internet of Things solutions here.