SMEs under pressure to align supply chain systems
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ERP more than just a nice-to-have, but rather a necessity, for SMEs

Following international trends, larger South African companies are beginning to place increasing pressure on their suppliers to align their supply chain systems. Given the cost implications of implementing the necessary technology, many smaller concerns might feel that this is a bullet they would prefer to dodge.

However, Paul Marketos, managing director of Bluekey Software Solutions, says that small and medium-sized businesses (SMEs) would be wise not to stick their heads in the sand.

“We are certainly seeing more and more of the bigger chains insisting that their suppliers’ systems are integrated with their own in order to automate, speed-up and streamline transactions. Supply chain integration is growing trend worldwide and it’s becoming more of a priority for the larger concerns in South Africa too.

“SMEs simply cannot afford to turn a blind eye to it. If they want to remain competitive and ensure their marketability to the larger chains, they are going to have to move with the times and implement proper systems.

“And, many already are. There is a rapidly growing Enterprise Resource Planning (ERP) mid-market,” says Marketos.

For the SME there are numerous advantages of implementing an ERP system which is integrated with that of its suppliers.

“Firstly, data capture is significantly reduced, which means that companies can save on the costs of employing a number of dedicated resources for this purpose.

“Secondly, when transactions and communications happen automatically, the whole process is smoother and faster, the need to manually input data is greatly reduced, and there are fewer errors. For example, the cost of a mistake, even as ‘harmless’ as the wrong stock code, is huge. It results in wasted time and resources, unnecessary delivery costs and customer dissatisfaction, all of which can be avoided.

“Thirdly, when the process is automated and delays and mistakes resulting from manual processing are removed from the equation, a supplier becomes a more cost-efficient, accurate and value-adding partner to a larger chain. This makes the company more marketable, which is key to sustainability in an increasingly competitive business environment.

“And when administration, from purchase order to invoice, happens seamlessly, suppliers get paid timeously,” says Marketos.

He admits that the cost of implementing a sophisticated system that can automate and streamline communication and transactions across the supply chain may have been prohibitive for smaller concerns in the past. However, he says that mid-range IT costs have actually come down in the last five years.

“The introduction of technologies such as SAP Business One, which is designed and aimed specifically at the small to medium sized business, also makes it much more feasible for them to automate their systems and integrate them with clients’ systems.

“SAP Business One is designed so that it can be easily integrated with other SAP systems on the client side, so much so that it’s actually very much a case of plug-and-play with bigger SAP systems such as SAP Business Suite,” he says.

He concludes: “The cost of investing in ERP should be considered an investment that promotes best practices and improves customer service. It’s about working smarter and improving efficiencies so that a business is able to run optimally, be competitive and grow.

“Companies can and should expect a return on their investment in ERP, whether it be gains in profit, efficiencies, sales or market-share. If an ERP solution is implemented properly and is exploited to its maximum, companies should typically see a return within two years.”

Note:

Bluekey Software Solutions specialises in the implementation of SAP Business One, the market-leading business management software solution for small to medium sized companies. It offers a total solution, from networking through data take-on and system setup to management reporting.

The company is the most successful and fastest growing SAP Business One reseller in Africa. It has been awarded SAP PartnerEdge Gold status; SAP EMEA Pinnacle Award Winner in 2008; and SAP Business One Partner-of-the-Year South Africa in 2005, 2006, 2007 and 2008.

Bluekey is also the most technically proficient reseller with the largest number of SAP-certified professionals. It has regional representation in Johannesburg,Cape Town, Durban and Nairobi and boasts a diverse client base incorporating names such as CJ Petrow Chemicals, Bidvest, Garmin, Kathea Communications, Miro, Stingray, Stodels and Winesense.

For more information about Bluekey Software Solutions