When implementing a new system, distributors and manufacturers should plan ahead and communicate those changes to supply chain partners to avoid disruptions, says Kevin Boyle, president of Industrial Distribution Consulting LLC in Preventing Predictable Disruptions.
Changing systems, such as ERP, may not seem risky, but it is the most common cause of supply chain disruption and can be as problematic as any natural disaster, according to Boyle.
“Manufacturers cause disruption in the channel all the time because they configure new business systems, they change the way they manage their order entry, and they don’t tell their distributors early enough,” he says.
Companies must understand that a new ERP system could require an extensive organizational restructure, because “disruption of data will disrupt everything,” says Randy Aardema, executive vice president, supply chain, US LBM Holdings LLC, Green Bay, WI.
Just as companies plan and prepare internally for adopting SAP, Oracle or another platform, they need to plan for its integration in the supply chain by alerting and involving channel partners well in advance so everyone can work together on making the process as smooth as possible.
A contingency plan should also be put in place for when problems inevitably occur. With proper planning the disruption should be minimal, but without communication and preparation it could be disastrous.
Read more about how to plan ahead for new system implementation and other supply chain disruptions in Preventing Predictable Disruptions.