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.

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