Wednesday, May 30, 2012

Has your ERP Solution Become Outdated?

The economy has not been great all around.  Organizations have run through their cost cutting measures.  Capital expenditures have been postponed.  Upgrades delayed.  Band-Aids applied and time has passed, like water under the bridge. 
What happened to those Technology initiatives?  You remember the ones that were going to put you ahead of your competition.  Your employees were going to be so productive with all the gadgets and tools available.

You had to delay your investments, but what about the increased maintenance costs and energy usage?  New equipment has warranties and typically run more efficiently than their predecessors.  Do not forget the time your staff has invested in patching and updating the older equipment to try and keep it current.  How long do your employees wait between screens to process and order or other function.  If you enabled each of your employees to save 10 minutes a day by having a more efficient infrastructure times the number of employees times 50 working weeks a year, what would that number be?  How vulnerable is your older equipment to virus, malware, and other Internet threats?

What about the Enterprise Resource Planning (ERP) modules that could replace the multiple separate systems you are running now.  Would an integrated system, fully integrated, be beneficial?  What impact would having all your information in one place, easily accessible, and useable have on your management and business operations?  How difficult is it to share information across your enterprise?  If you just yelling across the office, that does not count.  How many times does the same information have to be keyed into how many different systems so that you can create an outdated report?

How many people do you have on your staff just to support all of the systems you use now?  No worries about the impact to operations if one of them gets hit by a bus on the way to work tomorrow?  Everyone is cross trained, right?  Hey, how was that last audit?

Are you billing the right amount?  Are changes recorded properly?  How about your inventory levels?  How accurate was your last physical inventory?  If you were less than 99% accurate, there is room for improvement and potential for monetary gains.  Does your system(s) have the ability to track and measure, log transactions with minimal effort?  How will you ever figure out what happened to your inventory without a system designed to just that?

What processing could be automated without breaking your budget?  Does management have dashboards with drill down capability?  Get a look at the big picture and detail about the exceptions.  They might be wasting a lot of time culling through long reports to find the few areas that are most in need of attention.

Manufacturers typically have three major categories of resources that must be constantly monitored.  Employees or labor, material or inventory, and facility or work centers.  There are of course many costs and overhead figures to tally, but these categories drive your production capacity.  How well does your system manage and advise you about your capacity to meet your customer demand?

Finance department integration is also a key component.  ERP systems integrate General Ledger (GL) transactions, like mortar between the bricks.  Your accounting people cannot afford to wait to see what the impact of purchasing or inventory or anything else has on the company’s financial statement.  Not sure if this is true?  Go ask your CFO, CEO or other corner office person.  Keeping an eye on the company’s financial health is as critical a function as any.  Who owes you the most money, for the greatest amount of time? 

How long do your customers wait to get order confirmations?  Do they have the ability to self serve some or all of their own needs?  In today’s world it is an expectation that as a customer you can access your account, check balances, reprint invoices, check order status and do a host of other tasks on your own schedule that often runs past 5:00pm.  Do your customer service people have observability over inventory levels so they can keep your customers in the loop about on-time or late shipments?

Are you doing anything manually?  The cost to fix and automate those processes usually have a good Return on Investment (ROI).   Are you really saving anything by not replacing your outdated system?

What does the future hold?  Where do you expect to be in the next 3-5 years?  What will be you biggest threat, biggest accomplishment?  Will you be involved in any merger or acquisition (M&A) activity?

Let Dolvin Consulting be a fresh set of eyes and ears for your business.  We work with and help manufacturers, distributors and specialty retailers to help them streamline their operations with ERP solutions so they reduce costs, and become more profitable.   Those companies typically struggle with warehouse and inventory control issues.  They are also somewhat perplexed by the constant flux in technology. 

Partner with us and Contact us today to find out how we can help you compete better.

Monday, May 28, 2012

A Business Transforming Decision

Robert Wist, CEO of Wist, summed it up best, “For Wist, the payoff has been substantial. In just 2 years, we’ve recouped the packages implementation costs and S2K has provided a 10% reduction in employee overhead, while gross margins have increased by about 4%-- both considerable benefits for our company.”

Quite simply, the industry specific ERP package that Wist was utilizing had become obsolete and forced the company to make an important, business transforming decision.  Either Wist could convert to an updated version of a package that lacked the features and flexibility that the growing distributor needed, or it could seek out a new solution.


The company had grown significantly since implementing its original distribution package and what had once provided ample functionality, now ate up valuable employee time for simple data entry tasks.

Wist no longer runs an opinion-based purchasing system. S2K takes the guesswork out of the equation with a user-friendly, data rich suggested purchasing module, which keeps inventory levels lean, but still ample to meet customer demands.

VAI’s S2K for Distribution has helped Wist reduce inventory levels, streamline operations and decrease overhead cost.

“The Warehouse saw a dramatic decrease in labor,” said Mike Gallagher, Project Director, VAI. “With VAI’s advanced warehouse automation features including picking and order verification, Wist has replaced its manual processes with an efficient system that not only saves time, but also saves money.”

As Wist continues to grow, S2K for Distribution is flexible enough to grow with the company.

The right partner really makes a difference.  Wist evaluated more than one solution.  VAI’s teamwork approach and attention to detail contributed to the success that Wist now enjoys.  Expertise and Industry knowledge are other key components the contributed to their success.  True enterprise solutions delivered affordably.  Their old industry specific system suffered from a lack of flexibility and the ability to implement process improvements.

This is a great example of teamwork.  Take the time to know each other, define the challenges and match that to an affordable solution.  Dolvin Consulting works with VAI and IBM to deliver solutions to businesses.  Contact us today to see how we are different.  No sales pitch, no pressure, just question and answer to find out what works and what does not.  I know what you are thinking.  This success story is an exception and not the rule.  My business is different.  We will not know that until we talk.  Maybe you are right and maybe there is reason for hope.

Friday, May 25, 2012

People Management and Inventory Control Systems

I recently read about someone trying to figure out the optimal placement of supervisors.  The writer was sincere in his approach to find a solution.  There were also some sincere response comments stating that a supervisor and their desk should be on the shop floor.  Then they could interact with the workers.  Then he talked about the developmental stage of the employees.  Do they comprehend the job and what was expected of them?  How about training?  Then there was an analogy to solidify his point or was it points?

Of course there are optimal places for all employees, supervisors, workers, management, and ownership for that matter.  The response comments made me think.  In this day and age when driving efficiencies in operations are one of the most critical aspects to reduce costs and remain profitable, why would any company not invest in proper training for their workers?  Do the employees comprehend their job and expectations?  What type of Human Resources department do they have?  Are they in a remote area where there really is no selection of people?  I though unemployment was still high. 

What struck me as interesting was no reference to the systems the people were using.  The only context we have is the forum of warehouse and inventory management. 

Now these were just comments, but it made me think about a recent conversation.  I talked with an organization that needed some customization of their system, because the workers refused to process orders in their system before shipping.  The organization I speak of does invest in their systems and training.  They treat their workers fairly.  They are not in a remote area.  Other talent is available.

We were able to put together a plan that would address their needs, but not until we both commented that there seems to be a disconnect between who signs the paycheck and who cashes them.  The program changes are not really necessary if the people would use the system they were trained on.

Why do companies invest in systems then not use them? 

There may be an optimal place for a supervisor, but we would need to know a lot more about the facility before any reasonable suggestion can be made.  What should be included in their discussion was the type of systems they are using to manage their inventory, their workers, their productivity, and their operations. 

In today’s world you cannot separate the people and the systems they use to do their job. 

If the company is of any size, then they need systems to manage their inventory and work flow.  Management needs dashboards with drill-down capability to get high level snapshots and detailed inquires.  You need inventory control to know what goes where and how much, when to reorder, when to supply production, address customer and manufacturing demand.  You need Warehouse Management Systems (WMS) to manage and track the movement of inventory.  These systems can be set up to capture the detail without adding manpower and result in a database that can be mined for performance metrics to find areas that can be improved.

Supervisors and their placement are critical, but so are the systems they use.

Dolvin Consulting helps Manufacturers, Distributors and Specialty Retailers implement their systems to drive efficiencies in their operations.  We work with your team to document your system and find areas for improvement that can be implemented when your budget permits.  No false promises, just incremental improvements that cut costs and increase profits.  Contact us today, we are here to help.

Wednesday, May 23, 2012

Selecting ERP Solutions Should be About Value, not Price

You get what you pay for”.  This statement and countless variations exist, because so many people have learned the value of a free or low cost solution is often less and will end up costing more (Total Cost of Ownership- TCO) than if they had done their research more thoroughly and invested based on value rather than price.

A few years ago I was working with a prospect who was considering a new system.  We were discussing the implementation to their current system.  Knowing about their past systems, conversions and satisfaction helps to manage expectations and set reasonable budget ranges for a new project.  Knowing the process also alerts us to potential pitfalls that need to be avoided or addressed in the future.

The prospect related that they had a horrible time with the conversion.  They managed the process in-house, it took too much time and money and the process strained everyone with the extra workload.  I related that is not an uncommon story. 

We then discussed budget and the three major categories where monies would need to be invested.  Software, Hardware, and Implementation.  Of course there are subsets to the categories, but these cover the major areas. 

He agreed that the software numbers were reasonable, but lamented a bit, because after all it was already written and he just needed a copy.  Okay, he has a point, but if the company just handed out copies of the software, then they would not have the resources to keep it current, make fixes or plan for future enhancements.

The hardware was a somewhat more than what he had in mind, but the IBM midrange system proposed had far more capability and capacity than the several smaller servers that he used now that would be replaced.  Add in energy savings, reduced maintenance and ease of operation numbers to the TCO and the system made sense. 

What he had trouble most with was the implementation. 

This really surprised me.  He had explained in some detail how the previous implantation they did in-house was arduous, exceeded their budget, time frame and patience.  Yet, when presented with a reasonable budget number range, he became uneasy.  Perhaps the total number was just not what he had in mind to invest in the growth of his company.

Some companies, not just in software solutions, give an estimate of Software and Hardware and hope that you will think it is a good deal.  It probably would be except for the fact the single biggest category is implementation. 

TCO must be factored into the Return on Investment (ROI). 

Is one machine cheaper, but has higher energy usage, or shorter lifespan necessitating early upgrades and updates?  Would he prefer the estimate did not include implantation or we not speak of it or it only lightly addressed issues that we assumed he and his staff would take care of?  What happens when the system is delivered and no one is there to implement it?  ERP solutions are not like software purchased at retail locations where you just insert a disk into your workstation, click and go.

There is a long list of cost factors to include in all three categories we discussed and they will be the subject of future discussions.  The point here is that you will indeed, get what you pay for.  You are not going to change that fact.  You just have to ask yourself if you want to know about them upfront or find out about them later.  When you walk into a new room, is it helpful to have the lights on?

Dolvin Consulting works with manufacturers, distributors and specialty retailers to help them identify areas that can be streamlined with technology solutions, so that their costs are reduced and profits can increase.  Perhaps you are already doing everything you can with your budget, but you might not know that if you do not contact us today.  Reach out to us so that we can start working with your team.

Monday, May 21, 2012

Completely Integrated Enterprise Resource Planning System

According to Specialty Products’ Mina Cox, “When I speak to other executives and hear about the technical issues they have experienced with other systems, I realize that we just don’t have those concerns with VAI.  Happily, we are busy running a business, rather than dealing with bad information or down systems.  The bottom line is that VAI fundamentally provides a strong and dependable solution with the technical resources to provide back up and support if there is a problem.”

Additionally, Specialty Products is better equipped to provide excellent customer service. The company can boast 99.9% on-time shipments, 99.9% inventory accuracy, and a less than .02% error rate.

Specialty Products’ daily operations were challenged with the use of an older material requirements planning (MRP) system that was ill equipped to handle the company’s growing business needs.  Further, changes to the system proved complicated and cumbersome, and their previous software vendor offered inadequate technical Support.

The company demanded a solution that offered a flexible, feature-rich software package to handle its expanding business needs, streamline warehouse environments and provide an integrated platform to help Specialty Products speed ahead of the competition.

Specialty Products reviewed several Enterprise Resource Planning (ERP) packages. 

Some chief concerns were:

·         The warehouse staff needed to know, in real-time, the exact location of every product and the inventory counts for each item.

·         They needed a one-step order processing procedure including the ability to pick, pack and ship product in one easy step.

·         They needed a system to instantaneously pull up customer orders with attached tracking numbers, link these to its GPS website, and then interface the order with UPS WorldShip™.

Finding the Right Partner. 

Specialty Products was particularly impressed by the fact that VAI’s S2K Enterprise software suite would provide the company with all of the ERP capabilities enjoyed by larger manufacturers and distributors.

Mina Cox, Specialty Products’ Chief Operating Officer, noted, “VAI’s comprehensive, sophisticated ERP platform is a world-class system, and I would place it head-to-head with any major software developer. Companies like SAP and Oracle offer similar capabilities, but at a far higher price point.”

Mina Cox, also noted, “The best features of VAI’s software solutions are the extensive user-defined capabilities available in the major modules. This allows for a wide range of flexibility without requiring a great deal of additional programming. The software can be adapted quickly and easily— a real bonus for our fast paced industry— and the dashboard allows us, as executives, to monitor the performance of all the key areas of our business on one screen."

VAI’s S2K for Distribution and S2K for Manufacturing have helped Specialty Products to get the up-to-date, high quality information that it needs to run a competitive business.  Additionally, the company has seen a tremendous cost savings.  Notably, the cost of maintenance is significantly less than that of its previous vendor.

These highlights really tell a story. 

Many companies are struggling and have perhaps hit a glass ceiling.  The problem with glass ceilings is that they are glass and hard to see.  You end up with headaches from hitting your head so often.  Specialty Products knew there were better solutions, but were probably disillusioned knowing the solutions were out of their budget range. 

Along came VAI.  They took the time to listen.  They took the time to understand.  Specialty Products reviewed several contenders.  Any company should do this.  I would highly suggest investing in a consultant that will become a trusted advisor to help you understand and document your challenges, then take that information and select three solution providers to review in-depth. 

The ERP solution is important, but equally important is the future relationship you will have with the solution provider.  This is no small requirement and must be understood.  The relationship you develop is critical to your success.

Most companies including Specialty Products value their customers and provide the best service possible.  In this case same-day shipping.  That shipment better be right.  The supporting environment must support those efforts.  VAI has that commitment to their customers.  It forms a chain of responsibility that fosters growth.

Let Dolvin Consulting help you narrow your search.  We take the time to work with you to understand your challenges and match them to available solutions.  Contact us today.  We are here to help and we care.

Wednesday, May 16, 2012

Improving Warehouse Productivity

In the constant struggle to improve efficiency in your warehouse operations, save costs and improve profitability we look for the big hit opportunities.  There are often low lying fruit or options more easily implemented that go a long way to help.  When combined with other efforts the savings can add up quickly.

The first and foremost issue is having a “system”, reproducible and predictable.  The system should be part of your Enterprise Resource Planning (ERP) solution.  The ERP system provides the framework to implement, track and measure your efforts. 

Did what you just implement actually save time and effort of your staff and add overhead someplace else?

Use your system.  Track and measure to get baseline figures of your current efficiencies or lack of them.  Then do the best you can to change one thing at a time so you can more easily identify its success or effect.  This may be the hardest part, but the most important.  Your organization needs to do this regardless and periodically to determine if you have outgrown your current system.  Analysis can take a bit of effort initially, but maintaining becomes routine and not difficult.  The results provide criteria for new solutions. 

You do not need to be actively looking for a new solution to find out if you are doing the best you can with your current resources.

What are some relatively simple things that can be done?

Look at how your warehouse is physically organized.  Is it possible to rearrange some of the products for more efficient order picks?  If you cannot move the product, how about changing the order the products print?  How about voice picking options?  A lot of time can be wasted by having workers walking back and forth.  What would your day be like if you just walked back and forth versus starting at one point and ending up at the other end?

Do you bulk pick then sort and pack or do you pick each order individually.   No right or wrong answer here, just food for thought.  It is okay to do a combination of both pick methods.  What picking process minimizes employee overhead and increases efficiency.

Separate the high volume (movement) products to one area so that the 80/20 rule applies.  Pick 80 percent of your orders in 20 percent of your space.

Keep bulk, case, or pallet picks in a different area than the individual items.  This is especially true if you are mixing forklift and foot traffic.  Taking advantage of these separated areas also helps with stock rotations and physical inventory counting.  Cases are typically easier to count than individual items.

You generally want to cross train your warehouse staff in case of absenteeism.  It also makes sense to keep people who know your products as near as possible to the products they know.  It saves a lot of time when an employee knows right where to go versus having to search isles or bin locations for your products.

Work on determining and maintaining optimum stocking levels.  Less inventory is generally better for the budget.  Too little means customers may have to wait and might go else ware.  Perishable items have really limited shelf life and benefit particularly well from safely reduced levels. 

There is an optimum inventory level that is different for each organization and each item within that organization.  Many so called experts will tell you industry averages and that you should be here or there.  You know your business better than anyone and equally as important you know your customers.  Do what is right, but balance that with the knowledge that improvements can be made even in well organized and run warehouses.  Those improvements are driving forces behind a great Return on Investment (ROI). 

If you handle your own routes and deliveries, find out if your ERP system has a module or integration with a service like UPS’ Roadnet.  Software of this type organize your deliveries in the most efficient route and create reverse load sheets for your vehicles.  Save time, save fuel, save energy, save, save, save.

One of the most critical assets of an organization is employees.  They know what is going on and if you empower them, they will return many times the investment.  Give them the tools and resources available in your budget and they will produce.   You may not be able to do everything, but small incremental acknowledgements can go a long way. 

Ask yourself if you would want to work for yourself.  There is a show on television where the company boss works anonymously in his own organization.  What lessons can be learned?  What bigger lesson is learned if your people do not know who you are?  Are the executives separated in some ivory tower?  The whole organization needs to know, understand, and work together.  There should be a time every year where every (yes every) manager and executive has to work in the warehouse, the kitchen, or sweeping the floors and emptying the trash.  Everyone is valuable and needed.  Take some leadership initiative and make sure you are working as a team.

There are a lot of places where small incremental changes can combine to generate big savings.  There is not enough space here to list everything, nor would everything be appropriate for every organization.  This is where Dolvin Consulting can be your Trusted Advisor.  We help companies identify and streamline their operations so they reduce their costs and become more profitable.  Contact us today.

Monday, May 14, 2012

The goal was to streamline operations

“With S2K, greater financial transparency has led to better operational and financial decisions.  In fact, since implementation, our company sales and profit margin have increased respectively by an average of 20% and 23% per year between 2003 and 2009, providing Brydens with a true return on investment that can be overwhelmingly attributed to VAI’s S2K product line.  In today’s tough economy, businesses must find a way to not only survive but also thrive. S2K has given Brydens the power to stay on top of the market.”

The goal was to streamline operations, not only in the warehouse, but also across the entire organization, which meant removing many of the time-consuming manual tasks that were slowing efficiency levels.

Finding the Right Partner

VAI, a highly skilled and knowledgeable software provider, possessed the exact combination of tools to help Brydens transform its business, and three warehouse facilities, into a fully integrated, top-of-the-line distribution company.

Biggest warehouse issues:  Receiving, Picking and Shipping.

VAI also paid close attention to Brydens’ need to work within different units of measure—a high priority demand for the company in being able to deliver orders quickly and accurately.

VAI had a thorough understanding of how the organization needed to run its daily operations and worked with the staff until every need was met.

Each step of the process was monitored.

·         The business is now using the most up-to-date and efficient software available.
·         All business and warehouse operations are integrated—saving valuable time and money.
·         The distributor’s entire warehouse environment has been overhauled.
·         Receiving, picking and shipping processes are now simplified and easier to maintain.

Roy Ramkissoon commented, “All employees, across all departments at Brydens have benefited from the integration and information retrieval capabilities of VAI’s S2K software packages.  The removal of manual, time-consuming tasks has dynamically increased efficiency in services.  Inquiries alone have allowed users to better manage the business.  We are thankful that VAI was diligent in helping us solve our most difficult problems.  Brydens is looking forward to working and growing with VAI in the future.”

When I comment on a success story like the ones that VAI has proudly presented, I usually feel the need to point out a few facets that may not be so obvious.  “The goal was to streamline operations”.  This is a great title, as this is a common theme for any business organization.  Many will read this and the corresponding full article, because they hope to pull one small piece of information that will seed their next round of improvements.

The upside is that they received so much more.  It should be obvious, but sometimes we do not see what is right in front of our own eyes.  Yes, something equally as valuable and what is really responsible for their continued growth.  Brydens now has a partner.  A long time partner.  10 years and counting and they even purchased additional modules when they were ready.  Companies do not do this unless they have a productive relationship.  It is like a having a big brother when you go to school.  How nice is it knowing someone has your back?

At Dolvin Consulting, we have your back.  Contact us to see how we can utilize our relationship to help you find your right technology partner.  That is what we do and why you need to reach out to us now.

Friday, May 11, 2012

Supplier Lead Time and Inventory Stock Levels

There have been numerous opinions written about Supplier Lead Times, Just-In-Time inventory, Safety Stock, Inventory Levels, Consignment Inventory, Forecasts and of course systems to manage the whole inventory cycle.

What is important?  What are the challenges?  What is important to you and your business?

·       Inventory on hand to meet manufacturing and/or customer demand.  Your customers want you to have everything they want when they want it.  Your sales people want that too, but for a different reason.  Finance departments want the inventory on hand only if it used or shipped in a “reasonable” time period. 

·       Good relationships with your suppliers.  You want them to have what you need when you need it.  If there were no lead times, then you would not need much stock on hand, money tied up in inventory or shelf/floor space needed to keep the inventory.   

·       Multiple or redundant supplier relationships.  Your technology department has redundant systems to keep operations running in case of failure.  Avoid a single point of failure.  When possible you need that for your supply chain too.  There are earthquakes, floods, explosions that factor in a global economy.  Do not fool with Mother Nature.

·       How much safety stock is actually needed?  Forecasted and historical customer demand and the above mentioned supply chain issues factor in this number.  These numbers can be calculated manually for a few items, but what about thousands of items?  Are you purchasing standard stock items or special order items? 

·       Do you keep inventory or do you negotiate a consignment inventory handling?  Do you have the physical space for someone else’s inventory?  Real estate and the taxes, insurance and other factors associated with property leased or purchased can factor heavily on product profitability.  Even if you already have the space, is this the best solution?  Is your business important enough for your suppliers to offer this service?  There is paperwork and inventory counting and billing issues with consignment solutions.  It is not worry free.  In the right case it does ensure you have needed inventory available when you need it.

·       What about lead times?  Are these short term problems or are the issues symptomatic of deeper supplier problems?  Do you temporarily or permanently increase stock levels and absorb the associated overhead or do you work to resolve the issues?  Is your supplier being truthful with you?  How do you actually work these issues out?  Are the problems actually in your organization?

·       How frequent are the problems?  How often do the problems actually affect production or shipment?  In a perfect world safety stock levels will take into account the fluctuations of the supply chain.  Do you have the ability to create your own penalties for late shipments?  

·       Increased inventory levels, given enough resources, is a relatively simple solution, but comes at increased cost.  What are the actual costs with inventory shortages?  How often do they occur?  Extra inventory carrying costs last all year(s) long. 

·       Are you providing an accurate forecast to your suppliers?  Is your supplier just a vendor or a strategic partner?  There is a business axiom that says “What gets measured, gets managed”.  Are you tracking and measuring your purchasing, receiving, production and shipments?

How well does your technology system address these and the other hundred or so challenges?  What exactly is your challenge?  Every company struggles at different points at different times?  How can you learn from their mistakes and successes? 

How well does your trusted advisor address your needs?
Dolvin Consulting works with Manufacturers, Distributors and Specialty Retailers who struggle with warehouse and inventory control issues.  In simplest terms if you have “Boxes on Shelves”, then we can help.  Contactus today.  We have a vested interest in your success.

Wednesday, May 9, 2012

ERP as a Value Proposition versus Features and Benefits

Most businesses sell something and want to grow. 

To achieve those goals businesses are becoming increasingly reliant upon technology to do more business and to be competitive.  It is these goals that often drive the technology decisions.

When an organization looks at their current operations and realizes they need to implement, upgrade or look for a new solution they do not typically get what they need.  What most companies need is a supportive consultative approach where there challenges are identified and a suitable solution match found. 

What happens too often in their search is the onslaught of slide shows or glitzy demonstrations that do a great job of showing features and benefits.  Unfortunately, during this feeding frenzy many sales people only hope that somehow their bait will appeal to you without taking the time to ask questions to understand your challenges.

A brief executive overview is often appropriate, but only after an initial interview.  It lets the organization judge the solution for fit to their environment.  Again, this should only be done after the interview.  What most sales people are afraid of is that if they do not show you everything and get a commitment right away, you will be swayed by the next salesperson and then forget all about them.  So, in essence, they throw the pasta against the refrigerator and hope some of it sticks.

Once both parties agree that the solution is a viable candidate, then an internal team should be put together to determine departmental needs and key requirements.  Departmental interviews can then be set up so that the Enterprise Resource Planning (ERP) solution provider can prepare a proper demonstration that details how their solution will address these challenges.  It also paves the way to understanding what, if any modifications may be necessary. 

Just a quick note here.  If there are too many modifications needed, either your organization has really unique requirements or you may not be looking at the right solution.

What this process details is that there has to be a real value to the solution.  Every amount invested should translate ultimately in a reasonable Return on Investment (ROI).  What value is there in a solution that looks pretty, but takes too many “clicks” to enter an order?  Or does not address your inventory or forecasting or any of the many other issues you wanted the solution for in the first place.

What we see is that, while technology is the medium to deliver value, that the driver should be more sales, more efficient operations (cost savings), marketing and new products and services.  Technology is just the bus that gets you from point-A to point-B. 

Sound technology solutions will factor in your Total Cost of Ownership (TCO) and should be a big factor.  Who wants a solution that requires new overhead of operations staff and support contracts?  While many solutions may require implementing new technologies, it should not create unreasonable overhead.

The whole discovery process is an opportunity for an organization to do a proper discovery and document their processes.  This discovery lays the foundation for automation, one of the key and desirable benefits of an ERP solution.  The automation process can improve operations else ware in the organization expediting the return on investment.  This thought should always be present. 

The more operations are automated, the bigger the return. 

The how-to goes beyond the scope of this particular article and is why we should be talking. 

I am looking for new people to meet and help.   I believe that meeting me in person will be a productive use of our time.  Contact me today.  Dolvin Consulting works with people and organizations (in that order) to help them make wise investments in technology that deliver business value.

Monday, May 7, 2012

Do Companies Ever Outgrow ERP Systems?

Excellent customer service, delivery of products quickly and correctly, integration of multiple warehouses in multiple states, and Integration into one seamless system are the driving factors for many organizations.  When there is a need to be competitive and the current system does not address these fundamental requirements, then it may be time to invest in your company’s future.

Businesses that are growing often grow out of their Enterprise Resource Planning (ERP) systems.  Ideally they would have a system updated and maintained by a supplier that listened to their customer’s needs and reinvested in the future by upgrading their software.  This reinvestment is fundamental to success.  There is a constant flux in Technology and solutions continually need to evolve to address the changing landscape.

Distributors need to be able to locate their products in the warehouse and ship them in a timely manner.  At a minimum any ERP solution needs to be able to address this fundamental need.  This leads to greater customer satisfaction.  Satisfied customers are the cornerstone to growth.

Ron Caucutt, Business Analyst, Johnson Plastics, stated, “We’ve doubled our sales since implementing VAI’s S2K.  Not only have we added another location, but we are also shipping 40 to 50 percent more orders with the same amount of people, while continuing to increase our customer service levels. The VAI team has access to numerous resources and their response time is exceptional.  I was very impressed with how well VAI handled our implementation.”

Doubling sales without doubling overhead is a significant achievement.  Add to that increased shipments without more personnel and it is clear that the system being used previously was causing a drain on operations.  How long had this situation been present?  How many other organizations struggle today with similar issues thinking they are already doing the best they can?

Rich VanHelden, Project Manager, VAI, said, “Johnson Plastics needed a major expansion of timely information to run its entire operation, and VAI helped them get there.  With S2K, Johnson is better able to serve its customers, which has always been the company’s top priority.  In addition, the advanced reporting options available with S2K have equipped Johnson with the knowledge to address any business concerns that crop up—now or in the future.”

I am pleased any time I read about increased customer satisfaction.  Just consider the benefits to any organization when customers are happy or a least happier.  Happy customers help to promote your business by word of mouth, referral business.  What is also a certainty is what happens if your customer is unhappy.  They tell everyone and I mean everyone they run into.  In the elevator, the parking lot, the supermarket, anyone, anywhere.

VAI and Johnson Plastics are an example of a good fit between challenge and solution.  Both were okay before working together and now they are a great combination.  Dolvin Consulting works with your business with a goal of equal or better satisfaction.  Contact us today to see how we can help you streamline your operations, reduce costs, and increase profits and customer satisfaction.

Friday, May 4, 2012

What software should I be using for inventory management?

Mr. J asked this question on one of my favorite LinkedIn (LI) Groups.  Boy is he lucky he reached out to his peers.  After all LI is the perfect medium to add to anyone’s confusion.

I am leaving out some of Mr. J’s details here to protect the innocent.  The details here are not the point, as we talk about process in our articles, not solutions.  Solutions come after we both understand the challenges, the effect of the challenges on business operations and profits, and how potential solutions can be used to streamline operations and reduce costs.  

How do we fix the problem, if we do not know what it is?

It appears that their current inventory system handles basic counts and locations, but does not do very well to help this organization manage their supply chain, suggested purchasing or even simple reorder levels, receiving, invoicing and purchasing.  Three way matching is definitely out of the question.

Mr. J is looking for suggestions.  Where to begin, recommendations and who do we trust. 

Here is an algebraic question for everyone reading this.  By the way, did you really believe what you told your high school teacher when you said that you would never have a need for algebra when you grew up?

If A Likes B and B Likes C, does that mean A Likes C? 

If the word “Likes” was replaced with “Equal”, then the formula makes sense, but the word is “Like”.  If I like ABC Company’s solution and I like you, does that mean you like ABC? 

People do business with people they know and like.  I am just not sure that LinkedIn is the right medium to find your next ERP solution.  Maybe to find a Consultant or Trusted Advisor that will help you look at your operations from an outside perspective.  There is too much information that needs to be collected to get any real advantage out of a social media forum.  Each challenge needs a corresponding solution.  What is right for one may or may not be right for someone else.   So, perhaps Mr. J is not so far off base.  Free consulting is after all free, but remember you get what you pay for.

The answer to the question of LinkedIn being a good resource for this type of inquiry is, “it depends”.

The first respondent points out that there is not much information to go by, but he thinks that (insert big company name here) has a good solution.  It does cover all of the requirements listing in the brief description.  In fact all Enterprise Resource Planning (ERP) solutions fill that requirement.

I wonder where our next respondent works and what their operations look like?  He suggests that Excel and Access (Microsoft Office Products) are great for developing your own programs.  If our requester could write his own programs (system), then he would not have posted his query.  Using spread sheet programs are great for slicing and dicing raw data to analyze trends.  They are great tools as long as you do not create silos of information and can tie back to the original information. 

Spread sheets are not substitutions for an ERP solution. 

Oh, and he mentions that there is this other solution that has programs written for simple to complex technologies.  Not sure from the description if it is a series of programs or an Enterprise Solution.  He has used the office tools and this other software and points out those major ERP solutions have a bad side effect of being too easy to use and therefore easy to make errors. 

Really?  Easy to use leads to easy errors?  Maybe easier than spread sheets, but error prone?  Which in anyone’s opinion has a greater chance for errors, spread sheets or an ERP solution?  We are here to help and if you are stuck on this point, then do not read any further and contact us right now.

Mr. J is thankful for the advice and says he contacted the ERP solution provider.  He spoke to a Salesrep that was able to answer most of his questions.  He is waiting for pricing and possibly a demo.  Must be a good sales person.  He can answer all the questions over the phone.  I wonder what questions he asked Mr. J?

Mr. J apologizes for the brief information posted, probably because he did not get any good answers. 

When people read his request are they tempted to answer and prove how much they know or are they aware that it is going to take too much time to get to core problems and do not want to do free consulting or end up wasting their time educating someone who will not listen anyway.  In either case a knowledgeable person knows it is not possible to address all the issues properly in this forum.

We do get a glimpse of competency in the acknowledgement that Mr. J has IT (Information Technology) support and he does not want to recreate the wheel when a solution may already exists.  At what level is this IT department functioning with his company?  An ERP solution is a business decision, not IT.  However, IT does have the expertise to take your requirements and narrow down the field for management review. 

Mr. J wants something easy to use.  Apparently the users avoid their current system.  No idea why they would not use a system that should increase operational efficiency.  Is it really too complicated, was it poor training, or lack of support?

The system they have been using for the last six years is a complete disaster, is not intuitive and creates a lot of frustration.  Well, I would be looking to, if that were my company.  Maybe the IT staff recommended and installed it, so that is why he is not talking with them.  At any rate his call goes out to anyone who can help him with that system.  Why would anyone want that job?  What type of environment would you be walking into? 

Good, bad or indifferent, he needs a new system.  With the loss of confidence and current state of “disaster”, no amount of training or support will restore this company’s faith in this product.

A friendly person indicates her experience with some of the systems mentioned, but “of course that was 6 years ago”.  Technology and the solutions built on it evolve quickly.  Her input is well received, but is really not much help.  What are these companies doing today?  How well do they match Mr. J’s company challenges? 

Other than a need for an integrated and comprehensive inventory management system, we do not know much.  Do we really know what is wrong?  We know what they want.  What about the Finance department or any other department’s challenges or frustrations?  Solution 1 may address the inventory issues, but what about the rest of the company?

Our last respondent lets us know he has been around and is competent, because he has used lots of different ERP solutions.  A long career or a lot of short stints at a lot of different companies?  Maybe he is a consultant. 

He is not a fan of in-house solutions, because he has invested a lot of time fixing them.  I think I like this guy. 

He likes the suggested ERP solution versus a home grown solution.  Okay, but do we really know enough to say this is best?  It certainly is better than spread sheets, but right for this company? 

He makes a good point that any system needs to accommodate growth. 

Do we have budget?  He even states that the budget may have already been calculated.  Budget is very important.  Great solutions exist, but if you cannot afford them, then they will not work. 

A Return On Investment (ROI) should be calculated.  If you felt very confident that what you invested would be returned in under a year, then why would you not implement the changes?  Please, no comments about the financial markets and availability of credit at this point in time.

By the way, who is responsible for making this kind of decision?  What process did they go through the last time, what was it, six years ago?  Oh yeah, that is when they installed the system that is a disaster now.

Maybe they do not know what they do not know.

What I am suggesting is that the LinkedIn inquiry and the responses received should be enough for Mr. J to start a new search and select a trusted advisor who can help him navigate the rough seas of ERP software selection. 

Define the business requirements at all levels in the organization.  Find out who is affected by the solution or lack of one.  Start looking for areas including inventory for improvement which will become drivers of a good ROI.  Make sure you in fact have a good relationship with the ERP provider.  Ensure the proposed system matches your challenges.

The questions keep on coming.  Who is asking the questions?  Who knows what to ask?

We will not promise you everything.  We will work with your team and do our best to identify your challenges and match them with available solutions.  Your responsibility is to contact Dolvin Consulting now and get the ball rolling.  Both of our futures depend on it.