Opinion: ERP's a snap with an ASP

Small companies are finding that the technology available through ASPs can help them apply ERP techniques to their operations. By tapping application service providers for processes such as online invoicing and the tracking of sales, production and inventory, businesses are strengthening their links to customers, vendors and business partners.

At China Manufacturing Network in the US, CEO Everette Phillips uses ASP technology to fulfill orders between U.S. customers and nearly 100 family-owned factories in China.

Phillips' precision-manufacturing division fills orders for machined parts, with his firm acting on behalf of Chinese factories that aren't set up to deal directly with U.S. customers. His company also serves as a buffer for U.S. businesses unskilled in the nuances of working with Chinese factories.

"We're like a general contractor," says Phillips. "When a purchase order comes in from a U.S. company as a PDF, we assume the responsibility for getting the product made and shipped."

That might sound easy, but it involves many steps, all of which are handled with online CRM and ERP services from NetSuite.

The overall effect is a supply chain management operation linked to a sales and accounting system in which blueprints for die-cast parts are sent to Irvine, consolidated with similar orders and then e-mailed to China. Once a price has been quoted and accepted, an order for a small number of sample products is sent to China. The first run is made and delivered to the U.S. customer for approval. Whether the goods are cable assemblies or aluminum products, NetSuite makes it possible for Phillips to enter an item number corresponding to the U.S. company's internal inventory. Then the U.S. customer can log onto a portal and check order status using a single item number.

Once the sample run is approved, a purchase order is generated and then sent to Phillips, who creates a sales order and another purchase order for the factory in China.

Phillips aggregates orders using the "consolidate opportunities" feature of NetSuite, increasing his cost savings. He's also able to create packing slips and receive payments.

The amazing thing: This all takes place without an IT department.

Phillips once worked with large SAP systems in which controllers and IT staffers spent time and money matching item master lists with vendor files. "I used to have people doing this for me," he says. "Now there's one person to manage the T1 line for the building, with hosted e-mail and a Web site."

That leaves time to work with customers, offer competitive prices and manage independent sales reps.

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