Using an application service provider (ASP) is the way to beat the legacy system hurdle in the manufacturing industry, according to an Andersen Consulting partner.
Dr John Gattorna, managing partner, supply chain practice with Andersen, said there are too many ERP implementations in Australia and too many organisations take their eye off the ball after installing ERP systems.
"We are making too many ERP implementations in this country. Too many organisations have taken their eye off the ball after installing ERP systems.
"I have given up using the world integration, as it just hasn't happened. We've got to do things in parallel and pick up ERP legacy systems and use ASPs rather than invest in a system replacement, which doesn't necessarily change the processes," he said.
Nic Pollock, managing director for Viewlocity ANZ agrees that ASPs are "critical" to the manufacturing industry. "They are a way of getting around legacy systems and having connectivity straight away."
Gattorna said e-business is getting faster and faster. "We have a lot of catching up to do, the country is not bold enough at the top level and there are not enough people taking risks."
Pollock cites a "shallow pool" of forward-looking manufacturing companies in Australia, which is making some sectors of the industry lag behind.
In the future, Gattorna said, companies won't compete against other companies, it will be supply chain versus supply chain. "Electronic high-tech companies have got collaboration going and this is the model that most of us should aim at.
"The current supply chain is like a patchwork quilt, a best-of-breed nightmare. A lot of companies haven't even integrated the functions of their existing supply chain."
Gattorna said the emergence of indirect horizontal exchanges "were not very interesting or sustainable.
"Consortiums like CorProcure are a buying club and don't have access to small suppliers; I believe this will be a problem for them," he said.
"E-procurement is an area of quick wins and there are limits to it. There is a lot of confusion about the software out there. The problem for Australia is that current e-procurement software is mostly designed in the US and for large companies, but most of the supply base in Australia are small to medium businesses."
He said there are also problems with fulfilment as the development of the physical fulfilment has not been in line with the electronic development.
Gattorna believes that e-commerce has given manufacturing a new life, with configure to order (CTO) and postponement coming into play a lot more. But too few companies are segmenting customers or offering order promising.
"Bricks-and-mortar companies need to get their act together and put a dot in front of them. They are the ones that will last the distance," he said.