- November 3, 2016
- By James Mallory
- In ERP, History
This is Part 9 of a 9 Part Series on the History of ERP.
The Death of ERP & the IoT Internet of Things
It’s been a long strange trip from the early days of computers to the first MRP systems to the expansion of functional areas into what we know today as cloud or SaaS ERP.
My prediction for ERP? We’re just getting started. In the next 10-15 years we’re going to see incredible advances in ERP connecting supply chains even better than ever with real time data shared from retailer to distributor to manufacturer and all the way through to downstream suppliers. We’re going to see extremely specialized business applications develop to solve highly complex issues in vertical industries. And we’re going to see innovation like nothing that we’ve seen before.
The advent of the cloud is making it easier and easier for entrepreneurs to innovate and to get their products to market faster. I predict a return to the best of breed approach where the customer can purchase many different systems and easily connect them together into highly complex systems – the likes of which we’ve never seen.
But there will be a downside to this revolution in that it’s going to be incredibly difficult for businesses to find these new products among an ever increasing crowd in the market. And that’s our job here at e2b teknologies, to help manufacturers navigate the complex world of ERP so they can do what they do best – manufacturing.
We hear more and more about the IoT or Internet of Things – the connectivity of devices and machinery to the Internet. That’s nothing new. We developed machine interfaces between ERP and production equipment back into the early 1990s and we witnessed the advent of RFID not too long after that. At first, the IoT seems like just another techie acronym but the more we see what’s happening in the industry – the more real it becomes and the more we can get a clearer picture of what the future of ERP may look like.
Consider for a moment an completely automated supply chain:
• A retailer is getting low on a product on their shelves. We know this by either RFID or cash register transactions or a combination of both.
• A replenishment order is immediately and automatically transmitted to the supplier
• The supplier’s ERP system immediately plans for the production and shipment of more product to restock the retailer.
• Meanwhile, the ERP system automatically checks on-hand inventory, creates work orders and purchase orders automatically based on MRP parameters.
• Production schedules are immediately updated with the new work orders.
• Downstream supplier’s ERP systems are updated automatically to reflect the new purchase orders.
• And this happens almost simultaneously down through every level of the supply chain.
• Even the trucking company is notified of the new pick-up date for delivery to the store.
• And all of this will coordinate with the HR system to ensure that we have enough labor and our preventative maintenance systems to ensure that we have appropriate equipment available.
Sound impossible? Sure. But we’re heading that direction and we’re heading that way very fast. Computing power continues to increase exponentially. In fact, we’ve only witnessed a slight and momentary slow-down in Moore’s law first observed in 1965 by Intel co-founder Gordon Moore in 1965. Moore noticed that the number of transistors per square inch on integrated circuits had doubled every year since their invention. Moore’s law predicts that this trend will continue into the foreseeable future.
From SemiWiki.com – an open forum on the semiconductor industry. Moore’s Law does not show signs of slowing down (yet).
Many in the industry have proclaimed the death of ERP but no one to date has given us a clear definition of what has replaced it. Is the IoT? Unlikely – at least not yet. We contend that ERP isn’t dead at all. ERP is what it’s always been – the systems and processes in place in a manufacturing setting that manage supply and demand and account for every aspect of the business. ERP existed before computers but on paper and in the computers of our minds. It’s simply evolved to where it’s at today – on another platform. And it will continue on forever.
We’ve got enough history now to learn from where we’ve come from as an industry. ERP was born in the 1970s and we saw technology shift dramatically in every decade following – from mainframes to personal computers, and down to the cloud. One thing’s for sure – technology will never stop. We will continue advancing and every ten years or so there will be another fundamental shift that will take us forward. ERP vendors must constantly be thinking ahead and reacting to changes in the technology landscape.
Manufacturers and businesses alike must also accept this as reality. The ERP system you use today will probably not be a viable platform for you in 10 years unless the publisher is moving you on to an entirely new product. Perhaps that’s why most manufacturers keep their ERP systems for a decade or more.
While the technology will continually change, the business requirements won’t. We still need to plan for our resources and look for ways to increase efficiencies to get faster to better serve our suppliers and our customers alike.
So fasten your seat belt and let’s get ready for the ride. It’s sure to be entertaining.
This Concludes this Series. Review Earlier Articles Below.
Part 1: Crucial Events in ERP: From BOMP to SaaS and Beyond (10/6/2016)
Part 2: 1950s: The First Business Computers (10/11/2016)
Part 3: 1960s: BOMP & the Early Days of MRP (10/13/2016)
Part 4: 1970s: MRP Software Industry (10/18/2016)
Part 5: 1980s: MRP II and PC-Based MRP (10/20/2016)
Part 6: 1990s: ERP, Windows, and The World Wide Web (10/25/2016)
Part 7: 2000s: Merger & Acquisition Market Consolidation (10/27/2016)
Part 8: 2010s: The Great Cloud Migration (11/01/2016)
Part 9: The Future/Death of ERP Software (11/03/2016)