Two Signs ERP Changes are Needed

Most know that manufacturers, distributors and other midmarket organizations depend on Enterprise Resource Planning (ERP) solutions to increase productivity and deliver great customer support via an integrated information repository.  You know the analogy, the left hand knows what the right hand is doing, less errors, better performance, and faster access to business metrics.

 

There are many signs that you may have outgrown your ERP solution.  Every organization struggles at some point in time.  The struggles are equal during periods of growth and decline.  The economy is cyclical and so are business operations.

 

Below are two signs.  How many more affect you personally? 

 

Sign-One:  You increase your labor force and you do not get an equivalent increase in productivity.  The extra personnel just seem to be less productive. 

 

When your business grows it makes sense that you may need more people to interact with customers, process orders, handle procurement and finances.  It makes sense, doesn’t it?  Perhaps it does, but how many are necessary and how many are too much?  How many actually just increase overhead?  How many more do you need to manage the workforce?  Are you creating the need for an extra level of management?

 

If you double your warehouse work force, should you be able to pick, pack and ship twice the number of orders?  Should you be able to triple the number of orders?  What is the ratio of people to orders processed in your organization? 

 

If you actually ship twice the number of orders, how many customer service people does that translate to?  How many people do you need to add to the Finance department to handle billing and reporting needs?  How many more supervisors and managers are needed to address the increase in workforce. 

 

It might make sense to take a look at how your business is physically organized before you add people.  Not that you do not need more people, the real question is how many and where? 

 

For example, would arranging your inventory locations in a more efficient way for stocking and picking make more sense?  Would conveyors or barcoding or other form of automation increase productivity enough so that you can minimize hiring? 

 

In contrast suppose business has shrunk, how many roles can be consolidated?  How can you empower the remaining personnel with the right tools so that their productivity increases and you can maintain business operations and then prepare for the next growth cycle?

 

How efficient is the software you use to process information?  How many separate systems do you use?  How many steps does it take to enter an order?  How much time does it take?

 

 

Sign-Two:  You increase your inventory level and still have troubles meeting customer demand.

 

How much is too much inventory?  What are your customer’s expectations?  What does on-time delivery mean?  What delivery does your competition actually deliver?  Is there anything real about Just-In-Time (JIT) inventory?  Who do you know personally that can make that type of system work?

 

Manufacturers have lead-times for the products they produce.  Distributors need systems that build that lead time into their procurement process so that customer demand and sales history can be balanced to ensure that you have enough inventory on hand to meet expected levels with a reasonable amount of safety stock.  In other words, you can meet customer demand without overstocking your warehouse.

 

A purchase “deal” is not a deal if that inventory sits in your warehouse too long.  A special price so one business can basically dump their inventory is not a deal for anyone, if that inventory sits and takes up space.  Physical space, overhead, taxes all add up and can easily out-cost any purchase savings.  A deal is not a deal unless you have a customer ready and willing (and has the monetary resources) to buy the product.

 

Can you find your inventory?  Do you purchase more, because you cannot find what you thought you had?  How accurate is your current system?  What tools and processes does your current system have that helps to keep your inventory accurate?  How often do you have to count your inventory to know what you have on hand?  Is the only time you feel confident on your inventory levels is immediately after the counts have been posted?

 

There are numerous indicators of inventory inefficiency and tools and software to address the challenges and problems.  Most businesses struggle in determining just where the bottleneck is occurring.  Otherwise, they would have fixed it already.  The problem often lies deeper than the observable symptoms.  The alternative is equally pressing.  A business knows where the problem is, but lacks the resources to properly address the problem. 

 

Either way short term patches and fixes designed to address the problem will inevitably make the situation worse when a decision is made to make these fixes permanent without addressing the underlying issues.  Until you get to and address the heart of the problem, the problems will repeat.

 

 

So many questions and too few answers.

 

 

These two signs are just the tip of the iceberg.  What keeps you up at night?  You have questions and we have answers.  You may agree with some of these statements and disagree with others.  Why not share those thoughts here for your fellow readers.  I would love to hear what you think.

 

Dolvin Consulting works with industry experts to help your business identify and remediate the obstacles that are holding you back today.  Contact us to see how we can help.  Only you know how great the pain is and the impact it has on your operations.  We understand and can help.

 

Does Inventory Bin Processing Work?

Any organization that struggles with inventory at some points wonders if the bin processing feature would actually work for them.  Bin processing may have several different names depending on the Enterprise Resource Planning (ERP) solution being used or planned. 

 

In its most basic form, Bin processing segments the warehouse facility into discrete named locations.  There are different types of bins, some of the most common are bulk storage and picking.  Bulk stocking locations are designed for large pallet type ordering and will often contain overstock and is located further away from picking, staging or shipping areas.  Picking areas are situated for the majority of picking operations.  One example may be, 80% of your orders are by the case and these items are stored in the picking areas of the warehouse.  10% of your orders are by pallet and the remaining 10% are bulk storage for replenishment of the standard picking units. 

 

This sounds more complicated than it actually is.  The point is that inventory should be stored where it can be replenished and picked with the greatest efficiency.  The actual names and percentages are not as important as understanding how your organization stores and picks inventory to fulfill order processing.

 

The question to consider is whether or not you want to trust the computer system to manage that inventory storage.  If you cannot trust your system, then you are either using the wrong system, or do not have a system.

 

Trust is the key.

 

I was asked recently if I thought Bin processing worked.  The organization had limited space, a lot of inventory, and a lot of movement.  They were physically moving the inventory and redrawing maps by hand to accommodate the changes. 

 

Contrast this with a system that manages where to place and where to find inventory (automatically).

 

There is a lot of overhead in the manual processing this company performs.  Regardless, they are doing well.  They order, receive, move inventory, pick and ship inventory.  They have adapted over time to a system that is an efficient method of inventory handling, for them.  Their system would not likely work well with another company’s warehouse. 

 

They have adapted.  They use the resources they have to operate and fulfill their customer’s needs.

 

When asked if I thought bin processing would work, two thoughts went through my mind. 

 

One, they would not be asking if they were running as well as they thought they could.  People do not generally look for answers to unasked questions.  They are working, operating as well as they could, but obviously they are hitting a performance wall.  Not enough space, not enough people, not enough sales, not enough something.

 

Two, the answer is “Yes”, but… yes, if they let (trust) the system do what it is designed to do.  Most modern inventory systems work, if you let them do the work.  Automated systems look at inventory transactions and movements and will let you know where to store received items and when and where to replenish picked items.  They system “knows” where the inventory is.   The system “checks” and verifies the locations as inventory is processed (handled).  The system “knows” where the inventory is and what to list for picking or put-away operations. 

 

The problem usually comes in several forms. 

 

One, people try to out think the system.  A lot of time and energy goes into a modern inventory (IM) and warehouse management system (WMS).  A lot of smart people and a lot of trial and error went into these systems.   The systems work.   They work if you let them do what they are designed to do and you learn to trust them.

 

Two, some people as well intentioned or negligently move inventory and do not inform the system.  People are smart too.  People invented computerized systems and recognize their limitations.  This is a good thing.  This knowledge can be used to further tweak the systems.  Good systems learn from their users.  The problem comes from people acting independently.  If you touch and move inventory, then you need to let the system know about any and ALL changes.  The sooner, the better. 

 

A nice feature in newer systems is what is called Count-back systems and they are another asset to modern systems that are used to verify and an increase the accuracy of inventory.  Count-backs from an overview seem to add extra time to inventory picking, however, in the long run inventory accuracy is enforced and confidence builds.  Workers begin to trust the system. 

 

For example, if you send someone to a location that should contain 100 cases of inventory and they are supposed to pick 20.  This means when they count the remaining there should be 80 left.  If there is not, then the system halts until the problem is resolved (bypassed in an emergency).  This practice holds the people accountable.  They learn quickly that they need to get the inventory processing correct.  They have responsibility. 

 

Inaccuracy is not acceptable.

 

So yes, inventory bin processing works, if you let the system manage the inventory.  Do not get creative, let the system work for you and not the other way around.  It is like cutting wood with a saw.  You can force the saw into the wood and get an inaccurate sloppy cut or you can let the saw process the wood at the pace it is designed and get a clean accurate cut that does not need to be repeated, reduces waste and ends-up increasing efficiency (savings).

 

Hopefully this overview makes you stop and wonder if you are taking full advantage of your inventory system and the efficiencies and savings it can bring to your operations.  There are many aspects to these systems, the above is just one example. 

 

Contact us today at Dolvin Consulting to learn more about what a modern inventory control and warehouse management system can do for your company.  We are here and love to help.

 

Exponential Grow and ERP

Isaac Rogers, Vice President of Operations, Smith Drug, said, “VAI worked to fully customize S2K to meet our needs and interface with our existing modules.  The solution has helped improve the company’s efficiency in warehousing and distribution operations, thus allowing us to open a third location, one of our primary goals.”

What happens when a wholesale and distribution company grows exponentially? 

Over the past decade, Smith Drug Company found out when it experienced enormous growth. The company knew that it would soon push the limits of its enterprise resource planning (ERP) software. In order to maintain its growth potential, remain competitive, respond to the dynamically changing industry and supply its customers with unparalleled service, Smith Drug Company developed an aggressive initiative to enhance its technology.

Read the full story by clicking this link.

“The company’s legacy system, written in-house, was no longer able to accommodate the business’ needs, especially in the areas of inventory management and customer service,” said Claudio Gallina, Project Manager, VAI.

Smith Drug Company had simply outgrown its technology.

·         The continuously growing company was confined to just two warehouses and unable to reach its potential.

·         Manually enter inventory information increased time usage and impeded replenishment process.

·         Difficult for users to determine exact quantities of product in the warehouse.

The ideal solution would be highly functional and capable of interfacing with existing modules, while adhering to industry regulations.

·         Strong need to expand beyond its two warehouse facilities.

·         Ability to scale its technological resources.

·         Proactively preparing for the future.

Using an ERP with a robust, integrated warehouse management system (WMS), and incorporating this into other key aspects of the business would maximize the solution’s potential throughout the organization.

·         Alerting employees of errors as they occurred.

·         Tracking inventory movement more closely.

·         Easily check received item quantities.

·         Check return quantities processed.

·         Automated replenishment.

·         Eliminating the mistakes.

·         The system schedules purchases before products runs out.

·         Employees can quickly create reports and retrieve customer and order information.

·         Focusing on exceptional customer service and accurate inventory management.

Smith Drug Company now has room to grow and is poised for continuous expansion in the years to come.

 

Corporate growth is a needed challenge and is somewhat rare in today’s economy.  More business is great, but if the overhead of the new business crushes the infrastructure of an organization, then it can be a mixed blessing.  In order to process more orders through more locations and maintain great customer service, there has to be some sort of automation.

Enterprise Resource Planning (ERP) solutions are a great source of automation.  Picked and implemented correctly a business will have new tools to manage material, labor and overhead associated with warehouse operations.  More information, more accuracy, better allocation of resources and the ability to look down at the maze of operations instead of being caught in the maze.

Dolvin Consulting works with Manufacturers, Distributors and Specialty Retailers to help them streamline their computer operations with ERP solutions so that they reduce costs and improve profits. 

Contact us today so we can start working with your team to drive improvements in your operations.  We are not here to tell you how to run your business.  We both know that you already know how to do that.  We are here to provide you with better tools to manage what you are already doing.

Virtual Warehouse: BP Industries

Virtual Warehouse: BP Industries

VAI Integration: Portable conveyor system, automated shrink wrap system, RF scanners…

BP Industries, established in California in 1989, is a distributor and exporter of home goods. The S2K Warehouse Management system, along with a portable conveyor system, allowed products to be received more efficiently. An automated shrink wrap system and RF technology created a complete solution for their business.

BP Industries is another example of how a great company such as VAI works with its customers to understand their needs and find and apply the appropriate solution.


Dolvin hopes that it can help to fulfill your technology challenges.
Click here to learn more about Dolvin and our success working with companies like yours.

Click here to contact Dolvin.

Virtual Warehouse: Waytek Inc.

Virtual Warehouse: Waytek Inc.

VAI Integration: Carousel, conveyor belt system, RF scanners…
Waytek, Inc. uses S2K for Warehouse Management. Solutions include carousel, conveyor and RF technology. Waytek, an electrical part supplier, improved warehouse efficiency and inventory accuracy and created a faster turn around time for shipping.

Waytek is another example of how a great company such as VAI works with its customers to understand their needs and find and apply the appropriate solution.


Dolvin hopes that it can help to fulfill your technology challenges.
Click here to learn more about Dolvin and our success working with companies like yours.