Should ERP be a Technology Project?

There is a good article in the Wall Street Journal talking about some common pitfalls of Enterprise Resource Planning (ERP).  The author makes the analogy in the headline about diets not working.  This is true.  A diet alone will not achieve long term goals, only short term results.  Diets have a see-saw effect on the body.  It is only when someone looks at their entire lifestyle and make adjustments will they achieve a healthy life.

 

Diets That Don't Work: Where Enterprise Resource Planning Goes Wrong

Some key thoughts from the article:

·         Executives see ERP solely as a technology project.

·         Buying new software system will make inefficiencies magically disappear.

·         Before executives make a big investment in a new information-technology system, they need to rethink the way their organization is designed.

·         The effort to redesign business processes is typically the most expensive part of an ERP project.

·         Companies stumble with ERP, because they are afraid to abandon old ways of working.

·         The ERP effort was overly ambitious or unfocused, resulting in much-higher-than-expected initial investments in training, testing and time.

·         Some companies allowed their ERP projects to split into several smaller projects.

 

“They need to treat ERP as a transformation effort involving three areas of their business: processes, technology and spending.”

 

Solution Objectives:

1.       Create a common language.  Frame the project as an organizational transformation, not an IT project.

2.       Apply the 80/20 rule.  Focus on transforming the business activities that matter most to your organization.

3.       Keep the best of the old, discard the worst of the new.  Don't change things just for the sake of changing them.

4.       Develop enterprise metrics.  Measure the performance of your organization as a whole to determine whether ERP is working.

5.       Plan for the long haul.  Cast the ERP effort as a long-term project, not a quick fix.

 

 

There is not a lot to add to this article.  It is well written and makes several good points that I write about a lot in my blog posts.  ERP solutions are not the same as off-the-shelf boxed software.  An organization needs to use a Trusted Advisor and look at all of its processes.  Like the diet analogy, efficiencies that last do not come from quick fixes.  If you are bleeding use a bandage.  If you want a healthy life, then make changes in your lifestyle.
 

Enterprise software looks at the enterprise, so that means all levels of people from top executives to the guy who sweeps the floor at night need to be considered.  All suppliers and vendors, customers and business partners need to be integrated.  There is a lot to consider and a phased in approach under a global plan with realistic benchmarks should be developed. 

 

Probably the most important piece of the puzzle is your relationship with your trusted advisor and the partnership you develop with your ERP provider.  These relationships, especially with the ERP solution provider are critical.  If you like the solution, but do not feel that you are developing a close relationship, yes relationship, with the ERP provider, then be forewarned.  You do not have a partner.  You have a store/customer relationship.  There is too much involved in an ERP implementation to not have a partner in the process.

 

Dolvin Consulting works with Manufacturers, Distributors, and Specialty Retailers to help them streamline their computer operations with ERP solutions so they reduce costs and become more profitable.  Contact us today to see how we can help you find appropriate solutions for your challenges.  We are here to help.

 

ERP Solutions Enable Automation and Streamlined Operations

When you boil down the driving force for Enterprise Resource Planning (ERP) automation and streamlined operations should be at the top of your list.  More data collected and analyzed enable better and quicker decision making.  ERP solutions do not just collect information, it is what that information enables the business to do more quickly and efficiently that is important.   It is through accurate record keeping that we can see trends.  Integrating and connecting more of your business operations is not optional any more.

 

Are we using more labor to pick, pack and ship fewer orders?  Are those orders more or less accurate?  Where we able to find the inventory at the location our system indicated?  Do our customers feel like we are being responsive to their needs?  Are we buying what we need or what we think we need?  Are our customers buying what they did last year?

 

ERP solutions cannot just be bought off the shelf. 

 

Some vendors have hosted or cloud solutions and offer free 30 day trials.  Just sign up and off you go.  Are you really willing to risk your business on this type of solution?  How will you convert, test, and learn any new system in that period of time?  How much time did you invest to see if that would be a good solution?  Did you find them in an Internet search?  How reliable is that vendor?  Do they have a successful track record of serving their customers?  Will they be bought out next week?  What commitment do they have to your success?  Can you meet their company president or even get him on the phone?  Is your business that straight forward?

 

Any solution must be process based like your operations. 

 

You must invest in a Trusted Advisor to help guide you through the jungle and maze of technology.  Weed out the hype and define the metrics necessary to select a new solution and define the criteria needed to implement and gauge its success.

 

A successful solution will be one that integrates or has the ability to integrate over time your entire organization.  You may need to phase in a solution, because of budget, support, or some other resource constraint.  The system you choose needs to have the ability to grow with your growth.  Find out if the software vendor is continuing development so that as new technologies are adopted in the industry you can take advantage of them in a timely manner without replacing all of your systems.

 

Do you need a cloud solution?  How distributed and mobile is your Salesforce or organization for that matter?  Do you need to analyze sales and inventory trends?  What type of integration do you need with your supply chain?  Does procurement need to forecast demand with your suppliers?  Does your finance team have the tools and information to manage your accounts?  Can you produce accurate financial statements in a timely manner?  When was the last time you had accurate inventory counts?  How accurate are your shipments?

Do not forget about people. 

The software must fit your company’s culture.  It cannot be so dramatically different that no one has the capacity to learn how to use it.  If you will integrate the enterprise, do you have buy-in from senior management?  What about the customer service people who deal directly with your customers?  Will the shop floor or warehouse people be able to utilize the system?

Is your organization ready for change? 

 

How will you pay for the solution?  What is the Total Cost of Ownership (TCO)?  How will you determine the Return on Investment (ROI) of the solution?  What are the base requirements for a new solution and what is on your wish list?

 

Where and how do you get started? 

Would my existing consultant or trusted advisor be able to assist me or do I have to find new advisors?  How do I tell if they have my best interest at heart or if they are only interested in a commission?  Do I have to establish a new relationship with the company after the Salesrep leaves or do I work with the same people throughout the entire project?  What if I like the software, but not the Salesrep? 

There are no shortcuts to finding the right solution.   Dolvin Consulting works with your team to determine your needs and match that with an appropriate solution.  Contact us today to get the ball rolling.  It is a process, like your business, and it takes time to make an intelligent decision.  We are here to help.

 

On-demand vs. On-premise ERP

Should your business acquire traditional on-premise enterprise resource planning (ERP) solutions? Or should it invest in emerging software-as-a-service (SaaS) based ERP solutions?

Click here to download the Guide from Ziff Davis

Software as a service (SaaS) is a fast growing alternative to traditional on-premise enterprise resource planning (ERP) solutions. But just because something is hot doesn't mean it's necessarily the right recommendation. For many, on-premise may in fact be the better solution. The key is understanding what's right for your particular business.

This is a comprehensive comparison of both hosted and on-premise solutions.  It certainly will not answer all of your questions, in fact it should actually start you generating your own questions.  Any good paper will do that.  The reality is that after reading this paper, you will not run out and switch your system type.  You might feel comfortable that for the moment that you are doing the best you can with the available resources. 

What you will get beyond the basics from reading this is a new set of questions and possibly concerns that you can share with your trusted advisor.  These will provide great insight as you look to make upgrades or replace your existing systems.

Dolvin Consulting looks forward to helping you navigate the constant flux in technology.  We partner with industry experts to deliver solutions to your challenges.  Contact us today to see how we may help your business.

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.

Incompatible Systems vs. Streamlined operations

“We knew that it was time to replace our home-grown disparate software systems with an advanced, flexible solution and were looking for an established, stable company who could help us select, implement and support a replacement system that satisfied all requirements." said Quirepace’s Financial Director Martin Chewter.

 Having evaluated the business issues caused by having disparate systems, a decision was taken to source an integrated system that was robust, proven and scalable to cope with planned future growth, without the potential proliferation of more servers and the associated maintenance and energy costs.

Read the full story by clicking this link.

Quirepace came down firmly in favour of the VAI solution, due to its powerful function and ease of use across all areas of the business, a proven track record of installations across the world and the comfort of being marketed in the UK by a relatively local IBM Business Partner, Kingfisher Associates - www.kfa.co.uk - based in Dorset.

S2K went live in August 2010 and they now enjoy faster, virtually error-free order processing and business reporting.  Meanwhile, users are happy with the familiar 'Windows' type GUI interface.  As data only has to be entered once, an added benefit is that some members of staff have been released for more important tasks.

VAI's totally integrated ERP system has enabled the business to view data easily across all parts of the system, which is proving a major benefit in streamlining customer service management.

The world over businesses struggle with the same types of issues.  Separate systems and the inefficiencies they create including errors and additional labor.  The need to streamline their operations so they can operate more efficiently, reduce costs and most importantly – improve customer service.  A happy customer is one that becomes loyal and refers new business.  An unhappy customer becomes someone else’s customer.

Most systems start out simply enough.  Start with a server, an application system or software and some training.  This works well and then new business comes along.  This is a good thing.  What challenges many is that the solution does not grow with the company.  New customers have new requirements and additional add-on solutions are incorporated.  Or, in this case there was a company merger.  Regardless many times the solution that once fit like a glove no longer works. 

 

A new solution becomes easier to manage than the complicated mess of separate systems. 

 

Dolvin Consulting works with your team to indentify and streamline your computer operations so that you too can reduce costs and become more profitable.  It would be nice to reallocate existing people that already knew your business to areas where they could increase your operational effectiveness rather than hire more people to just break even.  Contact us today to see how we can help.

Choosing an ERP Solution

First thing an organization must do is answer the “Why” question of Enterprise Resource Planning (ERP) solutions.  ERP systems are designed to let the left hand know what the right hand is doing and in real time, not delayed.  Provide more information that is related and up-to-date, more quickly, to the people who need it to make better decisions.  This information share generates efficiencies and helps to reduce costs.

Has your organization outgrown a good fit solution, because of growth or a merger?  Is what you are using now over kill due to reorganization?  Have you become frustrated by continually adding on and now you have a patchwork of software that is a challenge to keep in sync and operating?  Do you spend more time maintaining the system than actually using the system?  How many people does it actually take to run, operate and maintain your system?  Does it seem like you now have a server farm?  How reasonable does it seem to you to have so many pieces of equipment?  I am not saying they do not do what they are supposed to do, but what about the Total Cost of Ownership (TCO) from running outdated equipment?

ERP systems can vary in complexity and functionality.  The “Which” question addresses these issues.  Which system addresses my company’s challenges?  Was I quoted what the Salesrep needs for a new car?  Do I really need all-this-stuff?  How many levels of personnel will be affected by a new or upgraded solution?

What exactly are my requirements?  Which modules do I need versus want?  Can I step into a new solution or will does it have to be all at once?  Will the new software fit my company’s culture?  Will it be functional?  Will it be too complicated for my people?  Do I have to buy equipment or can I use this “Cloud” thing people are talking about?  Where do I buy a cloud?  I see them in the sky all the time, are they free?  I understand equipment costs, software costs, but what are implementation, training, testing and conversion? 

Which solution provider will be responsive to my company’s needs?  What if I have a problem?  Is there any real support after I sign the papers or is it just a sales presentation?  How do I know if I can trust this provider?  Do they really understand MY business?  How much time did they invest with us?  What if I need some customizations?  Does source code come with the system so I can make simple changes myself?  I know the system works, but how do I get to the information directly?  I want to be able to create my own reports, when I want them and not have to wait on someone else.

What if my needs change over time?  I expect to grow a lot once I optimize my operations, add new products, and take over my competition.  Will this new software stuff grow with my business?  I want to lay the foundation now.  The last thing I want to do is look for another solution in a few years and run my company through this turmoil more than necessary.  Will I have to replace all of the equipment I have now?  Do I have the physical space or resources to even support a new system?  What other applications would I like to integrate now or in the future?  How much is too much?  What is my competition doing better than I am doing?  How many more customers will I lose, because my customer service people do not have the tools necessary to compete?

How much is a new system going to cost (or should I say what is the Investment)?  Can I afford to not change?  How much will it cost to run it over time (TCO)?  I know there are upfront costs, ongoing costs, license fees and maintenance?  Will I really be able to achieve a Return on Investment (ROI) in my lifetime?  Where exactly will the savings come from?  Would reducing my inventory level one or two percent really save that much?

How will I know if what I see during the evaluation and various demonstrations will be what I actually receive?   How much training will it take for my people to change?  I know I am the boss, but if I do not have any support, this project may not succeed.  Can I phase in the new system?  Should I run in parallel?  Just what metrics will I use to test the new system?  What if the real workload is too much for the system which worked fine during the testing phase?

  

Okay.  A real lot of questions here and the point is not to overwhelm you here, but give you a taste of the questions that you should be asking your consultant or trusted advisor to help you answer.  ERP is like a big supper.  All preparation, a little presentation and fast consumption by some hungry people.  The bulk of the work is upfront.

 

Dolvin Consulting utilizes its industry connections to work with manufactures, distributors and specialty retailers to help them streamline their computer operations with Enterprise Solutions so that they operate more efficiently, reduce costs and become more profitable.  Our biggest successes come from organizations that struggle with warehouse or inventory control issues.

Contact us today to see how we can help.  We are just a phone call away.

Delivering High Customer Service

“Algoma’s outside sales team likes the ability to look at an account and optionally print the customer’s information, which they can then bring directly to the customer during visits. Now they can also see the customer Accounts Receivable and sales information all within the same location, without having to navigate around through the regular S2K menu options,” commented Rachel Christian.

“It used to take hours before to come up with total sales for a given customer across all companies and now we have it with the click of a button.”

Read the full story by clicking this link.

Algoma wanted to increase customer satisfaction by giving its sales team the technology needed to understand the customer and to be able to access all customer related data from a central point.

·         Track all communication between the company’s sales force and customer base.

·         They can react quickly to customer issues and opportunities.

·         Algoma now experiences better communication among its employees.

·         Provides the sales representatives with better information to prepare for their customer calls.

·         One location in the system to document calls and visits to customers.

·         Consolidated customer master file, one record for each customer.

“The S2K Sales Force solution reduces the number of phone calls and emails between the inside and outside sales personnel.  Our outside sales team has been very encouraging and had many positive comments regarding the software piece several weeks into the implementation,” said Rachel Christian.

The advantage of VAI’s S2K Sales Force is its integration with the S2K Software.

“The integration capabilities that VAI’s S2K ERP offered with its Sales Force product was a deciding factor for us, since we are already running VAI’s S2K Software,” said Rachel Christian, Business System Analyst, Algoma Hardwoods, Inc.  “The time to implement VAI’s S2K would be less than other packages, making it more cost effective.”

VAI’s Director of e-Business Development, Todd Endsley, commented, “With VAI’s S2K Sales Force, Algoma has the ability to understand the customer and the account. The difference between S2K Sales Force and any other contact management system is that S2K is fully integrated to S2K Enterprise and it is more than contact management, it is a salesman’s business tool.”

“A Sales Force automation product is most beneficial when you have an outside sales team. It’s an information sharing tool between the internal and external sales force which dramatically improves customer service,” said Bob Vormittag Jr., Project Director, VAI.

If happier customers buy more and refer more business, then why would not every company prioritize customer satisfaction? 

Algoma wanted to make their processing more efficient with the underlying goal of increased customer satisfaction.  That is the right motivation.  There are literally hundreds of options that companies can take to increase operational efficiency.  The ones that are successful are the ones that look outside, to serve.

 

Algoma understood that a fully integrated system would also be a benefit.  Any time people touch data or information, it is going to be corrupted.  You cannot not eliminate errors when humans are involved.  It is in our nature.  Many software solutions have interfaces to automate the exchange of information and those reduce human intervention are the most reliable. 

Algoma had a fortunate opportunity in that they had already selected a partner that would work with them on their schedule to develop, integrate and implement a fully integrated solution.  Picking the right partner is also a customer satisfaction endorsement.  In this case, they were the customer and they passed that satisfaction to their customers.

Dolvin Consulting works with their partners to deliver positive solutions to your challenges.  Contact us today to see how we can help you help your customers.  One simple goal.  Increase customer satisfaction.  We work hard to make you happy so that you can make your customers happy.  A rising tide lifts all ships. 

FIFO Inventory and the Need for WMS

There are many people seeking advice lately on how to implement various First-In-First-Out (FIFO) inventory control systems.  FIFO is simply a matter of using the oldest stock first.  If you imagine produce like bananas or lettuce, then the concept is clear.  Use it before it goes bad.  The newest inventory should have the longest shelf life.  Nuts and Bolts, for example, do not typically go bad in time, so there is less pressure to use them in any particular order.

There are numerous strategies about shelving types, flow systems, drop down, gravity feed, pallet systems.  Many people wonder about the paperwork, using colored paper and labels to indentify a product’s month of origin (this would not likely work for the food industry). 

 

There are suggestions about numbering systems, advice on paperwork, missing and reprinting, mapping the physical space, location of items, etc.

Granted warehouse efficiency is very important and physical layout and shelving is important, but the critical thing missing from the discussions was the need for a Warehouse Management System (WMS) that is fully integrated with an Enterprise Resource Planning (ERP) solution.

 

Why are people so anxious to help so quickly that they forget to mention the basics? 

 

A WMS system is to inventory like mortar is to a brick wall.   A good system will generate labels, if needed.  Will automate receiving and put away activities, physical inventory and cycle counting, pick, pack, verify and shipment processing.

 

We will talk more about the details of how a WMS system achieves the goals of efficiency in the future.  For today, we need to agree that there should be a system and that system should be managed by a solution that will let the people running the business to run the business.

 

If your employees are losing paperwork and you are reprinting papers, if you cannot find inventory, if excess inventory is being purchased, if employee labor overtime costs are soaring, if the only time you are sure about your inventory balances is when you are out of stock, then you have problems that can be addressed with a WMS solution. 

 

You cannot buy a software solution that will eliminate obsolescence, the need for training or common sense. 

 

A solution needs to become part of your organization’s culture.  Once people see the system working, their confidence will rise and the efficiency and savings will come.  But, only after the investment is made.  You cannot harvest a crop that you did not plant.

 

Now is the time to contact Dolvin Consulting.  We partner with industry experts to learn, understand, and address your challenges with simple to use, yet powerful systems.  We work with your team to match your challenges with available solutions.  We achieve great Return on Investment (ROI) so the systems implemented end up paying for themselves.  Contact us today to see how we can help your company.