Any software tool that claims to analyze or optimize a supply chain uses this process. The questions we must stay focused on are, "What does the software really do in each step?" and, "What does it expect me to do?" If we keep asking these questions, we can find out the exact value the tool in question adds to the data.
We must stay on this message because the supply chain software industry is confusing. Nearly every vendor uses words like "supply chain," "optimize," and "simulate" in their marketing literature. Clearly, not everyone is doing the same thing--in fact, almost no two vendors are doing the same thing. (Frayer 1997, 433-441; Arntzen 1995, 69-93) Perhaps the first step available in tackling this wild frontier of computing cowboys is to dish up a little industry history to understand where the supply chain vendors have come from. To decipher and understand a vendor's particular language, you must understand which particular part of the "country" he is from.
There are essentially four tribes that until fairly recently, have coexisted more or less peacefully in the supply chain software village. They are the ERPers, the SCMers, the OPTers, and the ANALers.
The ERPers hail from ERP land, formerly known as MRP land. ERP (Enterprise Resource Planning) software tools took the concepts of MRP and attempted to integrate other departments and functions that were outside of the manufacturing-planning arena, but still were related. (Chapman 1996, 1-7) Essentially, ERP systems are the software infrastructure that facilitates the flow of information between all functions in a company (manufacturing, logistics, finance, human resources, etc.)
At their core, you can visualize ERP systems as huge database applications for storing transaction data. When your sales department receives an order, they have to enter the order into a computer.