ERP Life Cycle

Enterprise Resource Planning solutions have life cycles, just as plants and humans have.  They differ in many ways and also have many similarities.

Sunflower plants follow the pattern of:

1. Existing mature flowers make seeds.
2. Seeds find fertile ground.
3. Seeds grow into new plants.
4. A young plant is a seedling and grows bigger.
5. The fully grown plant flowers.
6. The cycle repeats.

ERP software function as a business management solution and usually consist of a suite of integrated applications that a business uses to collect, store, manage and interpret data from many business activities, including: product planning, cost and development, Manufacturing or service delivery, marketing and sales, inventory management and shipping and payment.

ERP cycles through:

1. A business operates and spurs new growth.
2. New modules or third party solutions are added to address growth and the need to capture and manage additional streams of information.
3. Inefficiencies increase as growth outpaces capacity.
4. Separate systems are implemented to address growth.
5. A new solution or upgrade is implemented to address the new scope of business.
6. The cycle repeats.

There are a lot of definitions of ERP cycles. 

Most start with planning and package selection, then move on to implementation and then operation.  While these stages are true most companies are already in the middle step of operation mode.  The existing solutions can be a full ERP solution or a mish-mash mix of manual, spread sheet, or older solutions.  One of the biggest challenges are determining if the current growth is temporary or a sign of future activity.

What has changed?  What is driving the need to change?

Many factors stimulate change.  Growth, Mergers and Acquisitions are common sources as well as a new product or service lines or a myriad of other economic influences.  What becomes a driving factor is the incumbent solution worked at one level of business and was not able to scale up or down to address the new level of need.  The need could be to handle additional or a drop in transactions, new or a loss of business units. 

The need could be up or down, growth or decay.

Increased activity without a corresponding increase in revenue is a sign of inefficiency.  The higher overhead drains an organization’s resources.  In today’s business world automation is the key to sustained growth. 

When selecting a new ERP solution it needs to address the current needs, pains and anticipated growth.  Many organizations concentrate on the current needs and how the proposed solution addresses their pain.  This is certainly a good starting point.  However, a good solution should also address future growth.  A great solution takes into account business cycles and can address both future growth and downturns.

There are seasons to business cycles just like plant life.  There is a nurturing point in time, growth, maturity and then the cycle inevitably repeats.  A lot of businesses forget this point.  What goes up comes down and with proper planning business goes up again.  Your solution must scale in the same way. 

• How is your solution designed to address future business cycles?  
• What downturns have your business triumphed through with your ERP solution?  
• What key components are you considering in your next solution or upgrade?  
• What cycles does your solution need to address?

Dolvin Consulting works with businesses in Manufacturing, Distribution and Specialty Retail to help them identify and address their growth pains.  Take a minute to post and share your successes and failures here with our readers.  Contact us to discuss your challenges.  We are your trusted advisor and want to help.

Will Analytics help Forecasting?

One definition of Analytics is “Information resulting from the systematic analysis of data or statistics”.

   

In a recent conversation I had with a contact he said his inventory was 99.8% accurate and that his firm used cycle counting to ensure accuracy.  He shared information with me about the business he obviously cares very much about and has invested a good portion of his life to as we talked about his operations, inventory and growth projections.

We discussed his Enterprise Resource Planning (ERP) solution and he is satisfied with it, in fact his company is planning on an upgrade.  I mentioned that I worked with another company and they asked if bin locations worked.  And I said, yes, if you let the system do what it is designed to do. He agreed that ERP systems can be rigid, but they do work if you let them do what they are designed to do.

I then asked him based on what he shared where his bottleneck was.  Every business has a bottleneck.  They occur at different points at different times.  If a company is growing, then bottlenecks are enviable.  What works at one level of business often does not at a higher level.

He said Forecasting was his biggest challenge at this point in time.  I asked if he meant receiving forecasts from his suppliers.  He said, no, it was sales forecasting.  This company has been growing steadily for some time and one of their product lines is really moving. 

Inventory is key and managing it is much like a dominos effect and is why companies invest in ERP solutions. 

How much raw inventory and finished goods you keep on hand is dependent on your sales projections.  Too little and you may become late, too much and you end up wasting space and paying taxes on what is left hanging around.  You need to fulfill customer orders in a timely manner and you also need to plan. 

In addition to the accuracy level, an indicator many firms use to judge their inventory level is called Inventory Turns or Turnover.  It is a measure of number of times inventory is sold or used in a given time period.  It is usually calculated as a ratio of the cost of goods sold divided by the average inventory.

Back to point.  Would a robust analytics solution that was used to analyze past and current sales to identify trends, be helpful in forecasting future sales and thus predict better inventory levels?

At its core Analytics is used to provide insight into customers and products.

Speed and efficiency are critical in businesses that operate at high volume.  These businesses have a need for real-time visibility into sales and inventories.  Their management has needs for ad-hoc as well as standardized reporting and analytics helps fill that need.

The key to Analytics and ERP in general is data integrity.  The old saying in computer technology is “Garbage In, Garbage Out”.  It means that the value of the information the system generates is only as good as the quality of the information taken in.  One of the goals of implementing these types of solutions is for people to concentrate on the results of the information analyzed and not worry about how they were achieved.

New data engines and tools speed up reporting that once took hours to produce and distribute to just minutes.  Dashboards, once built, provide management with top level overview and drill-down capability that business need to make better decisions more quickly.

Management can determine when they see customer sales dropping off if the problem is related to inventory, usage or a period of inactivity.  Increased awareness allows insight into greater margin awareness.

Greater awareness allows for more accurate forecasting and the ability to identify variances and make adjustments as demands change.  Reacting quickly to issues can make the difference in customer retention.  Knowing why a customer is purchasing less is important so that corrective action can be taken.

Forecasting not only allows users to spot global trends, but also identify specific issues that might otherwise have been missed.  Today’s systems generate and collect a large amount of information.  Tools like Analytics applications give insight.

What are your systems designed to do?  Do you use Analytics to forecast sales and inventory levels?  What successes and pitfalls have you encountered implementing your systems?  How long did it take?  How much did you budget?  Was the Analytics solution part of your ERP solution or was it a third party solution?

Dolvin Consulting works with industry experts to help your organization identify bottlenecks and streamline operations.  Contact us to learn how we can help your business.

Customer Service Matters

Through hardware, software and service offerings, Enterprise Resource Planning (ERP) systems can provide a portfolio of solutions to help manufacturers and distributors streamline production, operate more efficiently, improve planning and scheduling and implement more fine-grained and flexible decision-making processes.  Solution providers are helping businesses optimize their technology and make the most of their ERP and supply chain applications by extending analytic capabilities, making better decisions, improving order management and purchasing, plus many other capabilities.

 

The driving factor for many organizations often starts with “there ought to be a better way”, “our overhead is too high”, “we have too many errors”, “there is no observability”, “it takes too long” to name but a few.  There are also some that rationalize not addressing the issues by saying “that’s the way we have always done ‘it’”.  Find any challenge and add “too much” or “too little” to it and it will become the seed to change when someone tacks a price tag on it.

 

What type of benefits should a solution have?

 

Ultimately manufacturers, distributors, retailers and others need to make better, quicker decisions and act faster in complex markets. They need solutions that deliver powerful advantages which includes the ability to find the right information, from the right place, at the right time.  This includes workflow tools and notifications. 

 

Higher productivity. 

 

When you can help your employees avoid the clutter and overload of increasingly complex solutions to be able to focus on the information they need to make decisions and move their workload forward.  You empower your employees to attend to more important tasks first.

 

Easy Access to systems.

 

The definition of mobility has evolved in recent years to mean any device, any time, any where.  While this is the evolving definition for the mobile sales force, many companies are single location based and their devices are desktop computers.  What they find with newer solutions is that they can take advantage of mobile solutions at client meetings or when they count, receive, or pick-pack-ship inventory.  The theme of the ivory tower and dished-out information no longer works in competitive industries.  Businesses must improve the efficiency of the way they collect and deliver information to their employees, suppliers and customers.

 

Collaboration.
 

Newer solutions must increasingly bridge the gap between the traditional ERP solution and other web based solutions such as social media.  This integration creates new opportunities for employees to collaborate in real time with colleagues, suppliers, and most importantly customers.  Empowering employees to answer questions more quickly is a key component in customer service.  Meetings can be planned and coordinated more quickly.  Complex tasks can be divided and delegated with greater efficiency.

 

Customer Service.

 

Overall we should be investing a lot more time and energy in solutions that drive customer service.  Whether that is an updated ERP solution, integration with social media, contact management, or other solution.   It does not matter if the solutions are on premise or hosted in the cloud as long as the integration is tight and does not increase errors.  ERP Vendor integrated solutions potentially have the greatest Return on Investment (ROI).  Sometimes the upfront costs seem higher, but when you look at the Total Cost of Ownership (TCO) fully integrated solutions, that you did not have to integrate, are the best buy.

 

Your organization needs the tools and applications that empower them.  Solutions that give them access to the information that your customers need, like how long until I receive my order, or being confident when you tell them what they want is in stock and doubly sure they will actually receive what they ordered.

 

Your customers have questions.  They want to know you care. 

Your suppliers need information.  They want to serve you better.

Your employees need to bridge the gap between the internal and external worlds.

 

What is your organization doing to empower your employees?  Our readers would like to know.  Please share your ideas and what changes you have or are in the process of implementing.  Are you considering a new or upgrade to your ERP solution?  What new modules are you considering?  What third party solutions would you like to integrate and why?  Are you planning on small incremental steps or a major overhaul?

 

At Dolvin Consulting we work with industry experts to find the right solutions that will fulfill your goals to drive your efficiency in your operations.  Share your ideas here with our readers and then contact us to see how we can help you serve your customers better.

 

#AHA - A time to help

Help me help others by donating just $2 (you can always contribute more if you like). 

A donation is the right thing to do if you or your loved ones have been impacted by Heart Disease like my family.  It is even more important if you want to prevent Heart Disease from affecting those you love.

Click here to make a tax deductible donation

Thank you in advance for your support.

The Future of Enterprise Solutions

Clearly the Internet is the future of Enterprise Computing.  And by this I mean the Internet is and will continue to change the way solutions are delivered and accessed.  Further, by delivering software through a browser with a flexible nonproprietary web interface, developers can provide the user with a single sign on and user experience of all web applications.  This simplifies the user experience, increases productivity and minimizes training costs. In addition, web based software provides mobile access enabling every user in the organization immediate anytime, anywhere access. 

Solution providers can concentrate on developing more robust solutions that solve real world business issues that drive bottom-line results.  Organizations can now compete at a very high level by leveraging the flexibly and mobility of web services.  Growth potential is unrestrained due to the scalability that web services provide.

Nearly every modern device provides some sort of web interface.  Some compatibility issues exist, but even those issues continue to fade away with more standardization.  The standardization occurs as more and more vendors require consistent tools and interfaces.  These requirements are not specific to any one solution provider. 

Standards based technologies are the modernization and automation trend for technology, just like the assembly line was to the automotive industry.

Benefits of this evolution are a more responsive design, resizable display to match the devices used, and anytime anywhere access.  The benefits facilitate the transition to Cloud or hosted solutions.  If you remove proprietary emulation and terminal emulation, you open the door to adoption.

As more and more organizations adopt in part or more fully Cloud/Hosted solutions the greater the pressure on solution providers to embrace these solutions.  It becomes a win-win situation.  More adoption, more providers, more choices. 

While not everyone is ready to completely convert today, we see the trend well underway.  Small changes lead to bigger and bigger adoption.  Many businesses are one or two generations away from complete conversion.    

The capability to scale to seasonal or continued growth without adding to internal infrastructure is a big cost benefit.  While there are still some critical business operations that need to remain in-house, hybrid solutions are helping to bridge the gap.

Consumer adoption is aiding the transition.  Younger generations are wondering what the delay is all about.  Years ago, adopting a new technology required significant education and training for internal users and external customers.  Today, both have an expectation that your organization should already be utilizing these technologies.    

New solutions are allowing customers multiple options for their infrastructure including on premise servers, platform as a service, or software as a service.  Increased productivity and automation are driving factors to better customer service.

Automation that drives customer service starts with internal collaboration and communication.  Web enable solutions allow employees to stay connected and serve customer needs whenever and wherever the occasion demands, in house or on location.

Operationally monitoring daily tasks and alerts from any module or application helps efficiency.  Assignment of user tasks and workflow alerts keep employees engaged with production and customer needs.  These capabilities help create role based responsibilities that bridge the traditional module interface. 

In the past Enterprise Resource Planning (ERP) solutions were primarily departmental based.  Today they have been transitioning more and more towards functional role based solutions.  The collaboration of hosted based solutions helps to facilitate this transition.  For example, Procurement is a combination of inventory management, customer service and buying trends, vendor purchasing, receiving, production monitoring and control.  An overall overview of Inventory processing in and out and the ability to filter the information to meet individual user needs.

Companies thrive when they empower their employees to drive results.

By providing new role based solutions employee productivity is increased allowing them to react more quickly to business demands. 

Dolvin Consulting works with industry leaders to help businesses like yours deliver comprehensive solutions to your customers by empowering your employees.  Contact us today to see how we can help your team drive greater efficiency in your operations.

More Efficient Operational Processes

More efficient warehouse operations.  If only.  Is it possible?  If it were, there would likely be less labor costs relative to increased production.  Less costs and less production is clearly a down cycle in the business as is more costs and less production.  Ideally you want less costs and more production. 

Automation is the key.  But, automate what, how?

For most manufacturers and wholesale distributors the key often revolves around inventory levels, processing and handling.  Inventory tends to have the greatest Return On Investment (ROI).  Inventory management is somewhat like upgrading your kitchen in your house remodel.  The kitchen remodel generally returns the most on investment.  Other upgrades make living more comfortable, but Kitchens have one of the better paybacks.

Increased accuracy in order and pick/pack/ship processing due to warehouse layout optimization, receiving efficiencies including barcoding and scanning, automated put-aways and cycle counting are just a few examples that can contribute to more efficient operations.

Most businesses that have survived the economic fluctuations are running fairly well and have probably automated at least some and likely much of their facilities.  Warehouse Management Systems (WMS) are the key to the automation.  Unfortunately these systems are not always fully implemented.  Sometimes the implementation plan was a phased approach, but never completed.  Sometimes the organization had a loss of faith in the promised return.  The causes are many, a bad match between sales and purchasing, lack of education, or lack of funds to fully implement the solution. 

WMS systems are great, but they do have to match the business model.  Typically the greatest efficiency in WMS comes from a fully integrated solution that is part of the native Enterprise Resource Planning (ERP) solution.  However, if the ERP solution is not a good match, the WMS module will tend to exacerbate the problems.

A thorough review of business operations makes sense before purchasing or upgrading your WMS solution. 

Are there plans and budget available to outfit workers with wireless equipment, barcode scanners, printers, and other tools?  The benefits of WMS will be limited without the corresponding equipment.  Automating labor collection and reporting is another benefit of WMS systems.  A phased-in approach is a valid model as long as the implementation is completed.

How much paper is involved with the current processing of orders, receiving and counting?  How will a WMS system reduce this overhead?  Will your people be convinced?  What is the baseline and what metrics are needed to gauge the project success?  Without an electronic system how can workloads be optimized?  How much time and effort is needed to check orders? 

How much does the administrative overhead affect your profitability?

Achievable goals include year over year decreases in labor costs relative to production, order, pick and shipment rates of 99% accuracy.  To enable these accuracy levels organizations will typically need to implement bin management in their WMS system, real-time paperless receiving and put-aways, automated picking and cycle counting.  Manual systems require a significant amount of administrative overhead and paperwork which contributes to inaccuracies. These inaccuracies increase if batch, lot or serial number processing is involved. 

High accuracy rates are not the end goal, efficiency is.  High accuracy rates are what enables business to concentrate on real operational efficiency improvements. 

To get started, businesses need to conduct a business process review including evaluation of the incumbent and competitive ERP software including WMS systems, including any upgrades to their current systems.  This is only a start, but it is an important an unavoidable step in the right direction.

Buy-in at all levels in the organization is an important component to not be forgotten. 

Owners and/or management cannot just decide one day to push out a whole new way of doing business without proper training and education.  From the shop floor, warehouse, to the back office, management and top level personnel, everyone needs to understand that the change will help them to do what they do more efficiently and productively.  Set the expectations and gain consensus on the outcome. 

This is a real test for the leadership in the organization.  

How is your organization dealing with change, leadership and inventory challenges? 

Dolvin Consulting works with your team to identify and remediate the causes of inefficiency in your organization.  Contact us today to see how we can help. 

ERP Mobility

Your customers are mobile, your sales people are mobile, everyone is talking about the cloud, it must be heaven.  The reality is we are on the ground and there are times when we are connected and when we are not.  Is your Enterprise Resource Planning (ERP) solution running reliable like a sports car on the freeway or is it like an old farm truck with rust, bolted-on additions and constant repairs?

“If it ain't broke, don't fix it” – Bert Lance.

Not broke is not the same thing as fixed.  It means you are getting by.  Simply working is not the same as efficient.  There is a difference when you drive a new car versus a slightly used or old bucket of bolts.  ERP solutions start out shiny and new.  They get a little wear and the physical equipment gets a little older.  You keep up on the maintenance, at least initially when it was bundled in the purchase, and now it is just another line item in your overhead that you wish was not so big.  There are more and more mechanics.  There is more confusion as to where the actual problems exist as the symptoms are misleading.  There are too many aftermarket or third party add-ons and no one source is responsible for the entire solution, except you.

Add to all this mass of confusion the need to mobilize your salesforce.  What?  They have smart phones and we send them out on the road, aren’t they already mobile?  They call us to find out where to go next, what the customer owes, and inventory availability.  We just wish they would actually go where and when they are scheduled.

What?

Mobility software solutions have the ability to work while connected and while disconnected from your systems and synchronize after being disconnected.  Mobility software can exist as a bolt-on to what you are already using and is where many organizations start.  Somebody, somewhere created something that your people will somehow, after too much time and expense, finally figure out how to integrate with your system and then invest a lot of time keeping it integrated.

In contrast your solution provider may have or is developing a fully integrated solution.  This solution is typically clean and simple and has the same interface and conventions as the main ERP solution.  The mobile solution is typically fast and effective for everyday use.  Users can easily search for customer or inventory information, pricing and availability, create and send orders.  In some cases the mobile applications can be utilized by both internal personnel as well as customers. 

Once you are mobile enabled it opens the door to more effective connections with your customers, it is an enhancement to your relationship.  Trade shows, onsite customer visits, on the street.  You are conducting business where and when it needs to happen, not just in your back office.

So what should you look for in your solution?

• Work well online as well as offline.
• Minimal need for additional equipment.
• Minimized data usage on cellular networks.
• Intuitive searching and selecting.
• The ability to take advantage of mobile bar code and image capture applications.
• Connectivity to Bluetooth devices such as scanners, printers, and credit card devices.
• Signature capture.
• Payment collection.
• Geo location and navigation.
• DSD route sales.
• Immediate sales and delivery.

How would your organization compete better with a fully integrated and supported set of applications by your ERP solution provider?

This might all sound futuristic, but these solutions exist now and your customers are expecting these types of solutions.  Why?  Because your customers have their own demands and your products are needed when they need them, on their schedule. 

Mobility or not, you do not need the solution just to have the solution.  You need the solution to service your customers the way you would expect to be serviced.  Remember always that everything you invest in your company should have your end customers in mind.  You could have the best of everything, but if you do not have anyone to purchase your product or if it takes too much effort to do business with you, then they will go somewhere else even if it costs more.

What are your thoughts?  Share them here to benefit your fellow readers.  I am sure they would appreciate it as much as we do.

Navigating your way through the constant flux in technology and how it specifically impacts your business needs takes effort.  A trusted advisor like Dolvin Consulting helps in many ways including helping you to recognized and narrow your focus on critical impact areas.  Contact us today to see how we can help your team drive more efficiency in your operations.