October 16, 2006	Monday	Ramazan 22, 1427

NUMEROUS companies use Enterprise Resource Planning Systems (ERP) to manage broad aspect of their business as it has the possibility of managing different businesses under one portfolio. It is used both by manufacturing and services sectors.

However, despite availability of the Material Requirement Planning (MRP) introduced in 1970s, Manufacturing Resource Planning Systems (MRP-II) introduced in 1980s and the ERP which came into the market a few years back, Pakistan’s textile industry never implemented any of these systems.

Though the textile industry is facing tough competition in high end product and volume mix in their manufacturing, they rely on manual planning. A majority of mills use manual planning systems and have huge paper file storages. Some have shifted to computers, mainly for better presentation of written data for top managers and executives (usually on simple spreadsheets and word processors with data storage facility).

Some of the major issues facing the textile industry are : Manual constraints result in bad planning and reduce overall efficiency of the manufacturing system and increase chances of late deliveries. Thus orders are not delivered on time. It shakes the customer’s confidence.

The sales and marketing departments are unaware of the production process and fail to track the process for on-time shipments. It is impossible to know about exact lead time of manufacturing for a particular product thus triggering false promises with customers and shaking customer’s confidence.

In the presence of parallel reporting systems, manual and on computer— the data reliability suffers. With lots of wrong and lost data being shared across the manufacturing environment, the overall operational planning is greatly affected. This turns the whole focus of the company strategies to correct operational data errors.

Production and material backtracking is practically impossible in this case and there is no chance of overall system improvement and as a result the company repeatedly makes the same errors all the time.

Inadequate planning create rush order manufacturing which highly increases operational costs and wastages.

The reasons why the textile industry doesn’t implement, or hesitate to implement ERP systems are following:

* lack of vision and awareness in the strategic decision makers; lack of properly educated and trained people at top; less emphasis on IT projects, usually considered as luxury rather than a necessity; lack of benefit realisation of ERP systems and misconception of ‘loss’ as a result of such systems and less availability of consulting and software companies to implement standard ERP packages.

The decision to implement ERP system comes from a company itself. It is not a collective effort of companies to implement a common ERP system but an individual company’s effort to implement an ERP package in customised form according to its vision and business practices. Doing this, the company can gain competitive advantage over its rivals.

Major fashion retailers and western textile buyers have installed ERP systems. While developing business and supply contracts, they require suppliers to have the standardized ERP systems for information and data sharing over internet networking.

In this case, an ERP system becomes a necessity for survival of a manufacturing company. There are various ERP packages available in market which textile industrialists could take advantage of.

Secondly, the textile industrialists could have the ERP modules developed by local software companies. These companies are experienced enough to develop software modules but lack operational know-how of the industry. Hence, prior to implementation, proper technical and industrial experts should be consulted.

Once ERP systems is successfully installed, it takes care of the whole business process itself with highly reduced variables and makes it easily manageable.

Pakistani textile industry should seriously consider implementing ERP systems in their manufacturing environments to gain enough competitive advantage towards their competitors. This will enable them to think and move ahead towards the area of product designing, innovation and business process enhancements.