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Has your ERP Solution Become Outdated?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  How many times does the same information have to be keyed into how many different systems so that you can create an outdated report?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.

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