Blog, Sourcing, Supply Chain Management

Why do I need another system for Sourcing, why don’t I just use my ERP?

  • April 5, 2023
  • 2 Mins Read
  • 6241 Views

Why not ERP?

Many companies look to their ERP system and the procurement tools it provides to identify supplier sources for materials and services required in the cost estimation process. This seems logical from a systems proliferation and capital economy point of view, except when you think about what ERP is good at. That is execution. ERP is by definition a transactional, execution focused system, not one that is cut out for pre-job one activities, or for activities involving new trading partners that have not cleared the bar for entry into the ERP.

Sourcing, in particular, is a process where a truly optimal result will almost always include the assessment of elements that do not exist in your ERP.

Take the example of your new part introduction/cost estimation process. Many, if not all, of the components and materials that will be used to produce the new part(s) do not yet exist in your ERP. They may exist in your PLM, but for sure they will not be passed to ERP unless and until you win the new business, or you are ready to begin formal prototyping.

Or think about the process of market testing your existing contracts. Of course the incumbent supplier is in the ERP, but there are likely a collection of competing suppliers from whom you would like to receive a submission. These new suppliers have not been vetted nor added to your approved supplier list, so again are not a part of the ERP database. How do you collect detailed pricing information from them?

And let’s be honest, even if you did want to add all these new master data elements to your ERP in order to complete an eRFQ event, would that make sense? Would you want to clutter up your ERP with all those new parts, new suppliers, that may never get used? Master data management is hard enough in ERP without adding to the headache…

Why not a solution directed at Sourcing and Supplier Management?

So, the answer may be a stand-alone, point solution, purpose built to manage eRFQ and your supplier on-boarding, that talks to your ERP when needed, but allows you to complete your sourcing events with all the right information in the most inclusive way possible.

Like QSTRAT Sourcing & Supplier Management.

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