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When Your Value Stream Begins With Software

When Your Value Stream Begins With Software

Stay in the Flow: Estimate Your Software Value Returns

Businesses are supposed to earn a profit. New software can quickly lead to debt. Before you commit to a new software acquisition, know if your new possibilities will also be new expenses. If one of your customers wants to open up new product channels and your legacy systems will not work to meet development needs, the software selection process begins. You want to keep the good relationship you have with your customer, and you also want the new business. If you’re a small business, this means exploring the greater world of enterprise resource planning (ERP) software.

Software Value Stream Mobile Device Cloud ERP

Can you forecast the revenue stream for this incremental product or channel?

Your customer will have their estimate. You might also be able to increase sales to other customers with the capabilities the new software brings. Is there new business you can develop that did not exist yesterday? Maybe you can win some business from your competitors using your new capabilities. Incremental revenue will also have an incremental cost of sales. The additional margin is what you need to estimate for this analysis. Some of the new sales might replace existing orders and, if this is your case, subtract the forgone revenue associated.

All You Need to Know About the Savings Game

During the meetings you and your team hold for developing software requirements and talking in general terms about this new software, you will hear excited thoughts about sales orders moving faster into production. People will talk about how you can manage inventory much better. Another one might suggest that you could produce the same level of product with half the personnel in a department.

Some “software value stream” thoughts will make it to your software selection requirement list.

Here’s a potential thought stream surrounding value potential, especially when considering adding or upgrading an ERP software.

  • What can I do to enable a 25% reduction in inventory levels?
  • How can I ensure that all new sales orders will be in production or shipping within four hours of receipt of the order? Can I achieve this using only one support person to handle exceptions? Can I do this if I reduce staff to one from the current level of five people?

With new software, value can now be seen everywhere in your company’s future. Other potential savings are not requirements but remain as expectations. You know that you and your team will benefit from this software. Develop your list of savings and describe those savings in monetary terms divided into time phases. Remember that reducing your sales order support staff as described in your requirement only counts when you actually reduce staff.

Downstream From Your Software Value Stream: Ensuring Future Business

Often some of our software requirements enable us to meet new demands such as a new compliance regulation that our legacy system cannot support. When our new software allows us to meet that compliance, we cannot say we increased revenue or reduced cost. But we can continue in business so that there is a clear value. We could say the cost avoided is the loss of any margin that comes from an entire product line, so the loss would have been significant.

Your Total Value Stream

Evaluate all of your cost savings and incremental revenue and any other measurable improvement related to your new software. Lay these objective benefits out in time buckets over the next several years. You will probably be able to name other benefits that are not easily measurable. An easier user interface will be valuable to your employees, but there might not be any cost savings related. Keep your benefits simple and only use those that you can measure. When in the selection process and considering your software value stream, get your costs of acquisition and usage defined, so that you can compare these benefits directly with your costs later.

Book an hour with a software expert & find new value in your business.

Software & Vendor Selection: Where to Look

Software & Vendor Selection: Where to Look

The Best ERP Software Begins with the Best People

At every step, from software selection to ERP implementation, people are always your best resource.

Software and Vendor Selection Team

Back-feed your software & vendor selection script with experiential feedback.

Now that the internal part of the work is done, you can start contacting people outside of your business to help with your software & vendor selection process. Before you call any vendors or developers, there is another step. Peer and expert help is a good idea, especially when considering new enterprise resource planning (ERP) software.

Where to look for feedback and ideas

Advice from industry peers and other groups will help you understand your software application options. Cloud-based ERP education is easy to come by, but it is important to have a trusted person explain the fine print. ERP solutions are often sold in a pure SaaS (Software as a Service) deployment, and this might not be the perfect fit for your business. You might be a small business looking for your first ERP software solution, or you might be a complex manufacturing company looking for the real-time flexibility of a cloud hosted ERP system.

We all have friends from previous jobs and alumni groups that we can lean on when making big business decisions. The internet is full of advice and much of it is useful. Chase answers, seek multiple views, and engage in a business process review if you’d like an assessment of where you’re at before adding anything new to the mix. An ERP vendor will give you one perspective, and those near and dear to your internal business processes might have different opinions.

Keep your search organized

Develop a questionnaire. This will help keep the members of your team unified when they begin gathering information. The questionnaire also keeps the questions useful. For example, the question “Did you like the software?” is not a very powerful question. Instead, use questions such as, “What was the primary requirement you wanted to satisfy?” Then you might follow up with a related question like, “In what specific ways did the software satisfy that requirement?” The final value of your questionnaire is that you will be able to compare and relate responses from a variety of sources to each other. You will also be able to develop a value scale that can allow you to have an objective scale to compare the responses and their value to your business.

Talk to people 

When trying to choose ERP software, it is helpful to contact people from industry and trade groups. These will often be businesses that are similar to yours and their input can be useful in helping you make your decision. Use a little caution and avoid sharing where your next growth is expected and understand these businesses will be wary of sharing anything that might allow you to become a better competitor.

Your CPA and other resources that you have can benefit you as well when selecting software. Other clients that your CPA has might have been through a software search of their own. At this stage, you are not ready to take action yet and your CPA probably is ready and willing to act as a consultant helping in your search for a fee.

Use the internet for software & vendor selection research

The internet can provide examples of other businesses who have experience with software selection. Often you can find these businesses on the fifth page of your Google search and once you find them, even a quick phone call will frequently yield a person who directly participated in their selection and software implementation and has useful experiences to share. Many people are more than willing to help if you ask them.

Now take action

Once you have done your research, you might first decide to re-evaluate your requirement list. You might find some listed requirements to be of less value than originally considered or have found a point from one of your sources that should be added to your requirement list. Through this research, you probably learned of a software provider, previously unknown to you, that was highly recommended. You certainly learned new ways that others found that helped in their search or even helped their business operations after their implementation. You also learned of search actions others would have done differently if there were an opportunity to make their search again.

Now you can develop a list of only a few software providers or brands that likely will be beneficial to you. An internet search might list a thousand systems, which are too many to evaluate. Focus on your short list and begin contacting those few. The goods or services you offer will greatly benefit from new solution, whether you’re adding a third-party business intelligence platform or a new accounting software to your resource pool.

Remember that people are your best resources for ERP and more

Mid-sized manufacturing and distribution companies are especially vulnerable right now to supply chain management issues. Make sure you have the in-house human resources it takes to ensure that warehouses managed during a pandemic are restored to pre-crisis stability. If you need help with inventory management, enterprise risk management, cloud migration, or other critical business operations, EstesGroup offers you a one-stop-shop approach to operational optimization.

Are you ready to talk to a software & vendor selection expert? Let’s begin a conversation today.

Ask an IT or ERP expert a question now.

Five Ways to Ensure ERP Satisfies Financial Compliance

Five Ways to Ensure ERP Satisfies Financial Compliance

Every business has financial compliance requirements from many sources. ERP is your primary tool — helping you prepare the required reports easily, timely, and consistently.

ERP Financial Compliance

Set up ERP to produce the reporting needed.

The first step toward financial compliance is a complete understanding of what your financial compliance requirements are. There are national requirements such as those from standards boards and, in the US, GAAP, or generally accepted accounting principles, is one. Income taxes and securities exchange reports build on GAAP.

Financial reporting goes well beyond national requirements. States and provinces have their own requirements for any business operating within their boundaries. Other requirements at various local levels can be easy to miss, as they come from cities, counties, regional districts, and an assortment of commissions. These have the force of law behind them and require compliance and reporting. Sales and value-added taxes are in this category along with property taxes. Don’t forget trade unions that want reports of payroll and hours by work categories.

Regulations from this wide variety of sources have a common denominator in the requirement of documented processes to collect data and issue reports consistently.

Understand how data is created in ERP and where it is kept.

Once we determine what reporting is required, we move to figuring out how to get the data needed for those reports. ERP systems are based on finance and accounting and many data elements will be there ready to use. ERP is made up from thousands of tables, and some data will be available, but some effort will be needed to find it and extract it for use.

You might find some required data simply is not built into your ERP, but you already collect it in some other database. Here you might be able to create a user-definable field to store that data within ERP where it can easily be combined with other data from ERP. You might also need to integrate some other system with ERP to make the data available.

Ensure that your accountant is part of your ERP selection and implementation teams. Their role is to understand reporting requirements and make sure the ERP you implement satisfies those requirements.

Document the source of your required data and the processes that develop that data. Develop and save reports you design to collect your data for financial reporting. At the same time, develop reporting to satisfy any future audit requirements from the authorities.

Use ERP to manage the data trail.

Data for your reporting will be a combination of static and dynamic data. The static data largely is field names such as ‘date’ and ‘amount’. Dynamic data is that coming from all of your transactions. Your ERP includes many built-in tools to capture normal transactions like sales invoice amounts and purchase order payment amounts. Your unique ERP configuration settings might modify those built-in tools. For example, you can value inventory as LIFO or FIFO, and that setting will modify your inventory valuation, as well as cost of sales.

Since data is the result of all the transactions performed over time, any steps you can take to reduce errors will enhance the accuracy of your reports. Training, self-validations, and management supervision all help improve accuracy. Another method of improving accuracy is to automate as many repetitive steps as possible. When a transaction is automated, once the coding is complete, the results of the transaction will never vary.

Analyze your ERP data and use it for advantage.

You took advantage of the built-in tools available in ERP and you have automated and secured many of your transactions. Now your accountants are free to analyze. Look carefully at the data collected and check it again. Does it best show the results required by financial compliance? How can you improve the report? Is there a message to your management that was hidden but can help improve your business? These are your data; the data do not belong to the agency requiring compliance.

Build an analytics team and use this team to mine your data, seeking ways to help everyone. Your CFO needs a dashboard that displays all of the key metrics in a way that enables fast, informed decisions. Build dashboards to enhance decision-making at every level where any decision is made.

Report consistently across the globe.

Because the data for all financial compliance reporting comes from or through your ERP data, consistency is always maintained. Much compliance reporting is publicly available so that auditors from one agency can easily verify that consistent data was reported to another agency.

Even where comparisons cannot be made, you know the reporting is consistent. A compliance report filed in France is derived from the same data as a similar report filed in the USA. Only the filters are changed.

Because the reports are centralized and accessible anywhere, the headquarters can run a report intended for a compliance agency anywhere in the world.

Every business has financial compliance requirements. ERP will enable us to meet those requirements without undue burden. At the same time, ERP enables consistent reporting wherever we have requirements and provides tools we can use for our own benefit too.

Are you concerned about more than financial compliance?

Compliance can be challenging, especially in regard to ever-evolving cybersecurity regulations. Sign up for a security audit today to see if your systems are compliant in regard to data management & privacy laws. Not ready for an assessment? Watch a video interview with EstesGroup’s CEO, Bruce Grant, to see how ERP & IT consultants can help manufacturers stay on top of industry rules & regulations. Read our article on cGMP compliance & ERP to get more insight into how regulatory organizations affect your business.

cGMP Compliance & ERP

cGMP Compliance & ERP

What is cGMP?

cGMP stands for current Good Manufacturing Practice and, more than just initials, it is at the center of the US Food and Drug Administration’s efforts to protect citizens from potential hazards related to food and beverages, cosmetics, pharmaceuticals, and medical devices. ERP is the system used by businesses for accounting, inventory management, sales order processing and many other processes central to maintaining management control. ERP is where businesses keep the records that show they are complying with good manufacturing practice.

cGMP Compliance ERP

What does cGMP look like for manufacturers?

Process Control

Process control is critical in these controlled industries. We need to define exactly how our product flows through manufacture. Who will perform the necessary manufacturing steps? What ingredients or component parts are required? When does each step take place related to the previous and following steps? Where will we manufacture our products – in which facility and using which equipment? Why are we taking these measures to control our process? How will we document exactly what we did and compare it to what we said we would do?

Training

An ERP system has a record of each employee. That record goes well beyond payroll and human resources. If we add the training each person has had and their current work qualifications, we can use ERP to work with our cGMP process. We can now schedule specific people within our overall production schedule. The people scheduled are limited to only those who have required training and certification based on the rules we established within our business. Next we can use ERP to track exactly who worked on each manufacturing step. This enables us to pass any audits. We also now can know who might have made any error or failed to precisely follow our defined process.

Compliance Department

Inventory

Our cGMP includes a specific list of ingredients or component materials required to produce our product. Our list can further limit the materials used to those from specific suppliers or items commonly available from multiple sources. ERP helps us track each item by lot number so that we never inadvertently mix a lot in the same batch. Lot tracking sets up our ability to manage any potential recall. We know which output batch had an issue and know exactly which ingredient lots we used in that batch. We can also use ERP to avoid any chance of using an item beyond its shelf life.

Recipe or Routing

ERP provides us with the manufacturing path that we know meets cGMP. Step one is performed on certain equipment and specified operations must take place then. We can measure the outcome of step one and ensure production is ready for step two. Since we know the duration of every step, we can schedule equipment and personnel and provide the completion date and time for our customer.

Facilities and Equipment

Our cGMP specifies that products must be made only in approved manufacturing facilities and then only using specifically approved equipment within those facilities. The production schedules we use from ERP will use those limits and help us manage capacity requirements now and in the future. Manufacturers must identify what hazards might exist and establish control points best suited to capture and control those hazards. This requirement is known as HACCP or Hazard And Critical Control Points.

Testing and Measurement

Throughout the cycle of production, we will test and measure the product using values stored in the quality module of our ERP system. The tools we use are maintained and recalibrated as we define in cGMP and our test results include the specific tools used as well as the results. Testing and measurement looks for statistically significant variances and enables us to determine corrective and preventative actions and track those to completion all within our ERP.

Quality Management System

cGMP requires that we have an active quality management system that is fully documented. ERP is one of our primary record keeping tools and supports cGMP fully. Any business whose activities fall under the cGMP rules of the FDA should ensure their ERP fully supports their required control systems.

Are you facing ERP cGMP regulation challenges?

Our ERP consultants are here to help you navigate everything from ERP implementation to private cloud hosting deployment. EstesGroup’s managed IT specialists help clients with backup solutions, disaster recovery, hosting solutions, cybersecurity, and more.

ERP Training After Go-Live

ERP Training After Go-Live

Make Training Part of your ERP Project Plan

Your employees just had a grand celebration. Your ERP project is complete! The months of hard toil, testing, trepidation, and training are in the past. Or, maybe the education has only begun?

ERP Training After Go-Live

Here are some considerations for the post-go-live phase of your ERP project:

Replacement personnel

People come and go normally in any business. A usual process is for the outgoing person to train the one incoming. Often that works adequately well. But a better way might be to enroll the new person in formal training where they get instructions in precisely the methods preferred by the business along with training in how their new tasks relate to the overall processes.

Knowledge Capture

Your employees and ERP users develop improvements in the ways they work every day. Could the improvement found by factory quality assurance people benefit accounts payable? A training specialist would recognize the improvement from a broader perspective and include it in future training for A/P and other functions.

Feedback

The initial training provided to everyone incorporated the best processes known at that time. People will complain if that process is cumbersome and will suggest improvements. Listening to feedback from every source allows processes to improve and future training to enable those improvements.

New requirements

Your customer asks for a change after go-live. Your supplier wants to change some delivery options. Changes occur frequently and ongoing training allows all to be properly trained so that those changes in requirements can be met.

Improvements that were not part of requirements

You had a list of requirements the ERP was intended to resolve. You might also have had a second list of improvements desired but not part of the requirements. Now that the requirements are complete, begin implementing some of those “nice to have” features that will help. Ongoing training is the way to implement those changes across your enterprise.

Process validation

Your ERP project was intended to bring cost savings and many other benefits to your business. Those benefits provided the return on your investment. Now, after implementation, measure the results. Are you getting what was expected? Is the use of ERP part of any shortfall? Better training might bring the system use up so the results you want are still achievable. You could also determine further process changes are needed to get those results and people will need training to use those improvements.

Ongoing review training

Implement an audit system to verify people are using the ERP system properly and completely. No training will cause a complete change of behavior. We all slide day by day and begin to take shortcuts. An audit will find behavior slippage and provide a chance for correction. The same audit might also find someone has worked out a better process that ought to be shared around the company.

Technology updates

Network and computer systems gain new technology regularly. Maybe there is a process that can now be sped up? Maybe there is another that now can be automated. Take advantage of these gains and update your training at the same time. Your ERP provider improves their software and makes these changes frequently. If you have a system in the cloud, like SYSPRO, those improvements are there immediately for your use, and an auxiliary solutions, like ERP hosting, can improve everything from cybersecurity to business process management. Pay attention to the updates, many can be used to your benefit right away and others could help with a small process change on your side. As with hardware updates, update your training too.

Continuous improvement

Training provides a path for continuous improvement. You can develop a great training program as part of your ERP project. Keep it alive and help your business thrive.

3 Ways to Spring your Epicor Installation Ahead

3 Ways to Spring your Epicor Installation Ahead

Spring Cleaning & New Growth for Epicor ERP

While individuals differ in their opinion of daylight savings time, the metaphor of “springing ahead” feels perfect for the enterprise resource planning (ERP) season. Spring is, after all, the time of growth and expansion. So how do companies make the most of this season? Successful Epicor customers often find ways to move their implementation forward, following through on the ERP resolutions made in winter. 

Whether you’re heading toward a great spring-loaded leap forward or merely some spring cleaning, there are many things that you can do to help your Epicor application spring ahead in terms of functionality, capability and overall return on investment (ROI).

Epicor Installation Manufacturing Tool Sparks

Spring your Epicor Installation Ahead with a Master File Cleanup

Daily problems in business operations often have their source in the master file records. Master file records are the kind of data that gradually deteriorates over time, if not cared for with vigor. Cleaning up the customer, supplier, and part master tables allows companies to quickly resolve multiple ongoing issues. I’ve seen many companies perform annual intensive data cleanup efforts to rectify such ongoing issues, and this often results in a system that is more predictable and more scalable over time. With each master file, countless questions can be asked to verify the accuracy of this foundational data.

These might include some of the following:

  • Customer Master: Are customer contacts up to date? How about the terms? Are credit limits in need of a review?
  • Supplier Master: Is banking information correct? Are purchase points defined correctly? Are terms up to date?
  • Part Master: Is supply-side information correctly configured to handle demand? Are part costs in line? What about customer and supplier-based part pricing?

Spring your ERP Ahead with a User Security Review

Cleaning up security within the ERP application is a simple step that can improve the maintenance and maintainability of the application. One significant question would be to ask whether your company utilizes individual user security or group security. The use of group-based security tends to keep the management of security much cleaner than the individual method, as users inherit permissions from the security groups, which ensures consistent and predicable access, without the scramble of managing individual permissions on every user account. Has your individual user security gotten out of hand? It’s never too late to rationalize security groups and roll back some of the disarray. This is one simple way of keeping your Epicor installation from becoming risky business.

Within this general structure, attention should be take to a few key functions, as to ensure that they are adequately managed:

  • Part Maintenance: Who has the ability to create and maintain parts? In many organizations, too many individuals have this ability, and it can create a significant amount of disruption if they are not doing so in a consistent manner.
  • Quantity Adjustments: The ability to adjust inventory quantities on the fly is a powerful but dangerous capability. Often, quantity adjustments are made to cover other issues, such as incorrect quality practices or inaccurate material issuing tendencies. Limiting quantity adjustments to a few reliable individuals is key to preventing inventory problems from spinning out of control.
  • Job Entry: Who should be able to modify a job? There are several settings (backflush, make direct, purchase direct, etc.) that can radically affect the application. Tightening the screws on job entry is often a means of ensuring successful supply for the jobs in question.

Spring Ahead with Focused Education

In an ERP context, education should be distinguished from training. Training generally refers to basic instruction geared for general end users, to allow them to perform processes accurately and consistently. Education differs from simple training in that it focuses much more on the underlying mechanics of the ERP system than on performing specific pre-defined tasks. When a larger critical mass of super users understands the underlying mechanisms of the system, you are better able to make decisions and further refine your system, improving efficiency and handling new challenges as they arise. Also, as new employees enter the organization, providing them with a solid understanding of the system can prevent needless backtracking. This is especially true for an Epicor installation.

So, what areas of the application could use some additional deep dives? Here are a few:

  • Transaction types: What’s the different between MFG-STK and MFG-WIP? It’s an important distinction.
  • Non-Stock: Understanding the effects of the non-stock flag on Sales Order Entry, the Engineering Workbench, and Job Entry is fundamental to successfully managing parts through the system.
  • Phantom BOMs — phantoms may help simplify your job BOMs, consolidate engineering levels, and simplify transactions.
  • Labor Entry Method: How does backflushing differ from Quantity Only? These are subtle but important differences, and the ramifications are widespread.
  • Backflushing Materials: Backflushing is another opportunity to make the system more efficient, but it relies on a solid understanding of the related hierarchy.

A Clean Epicor Installation Enables Growth

Spring, after all, is the season of growth, so push to move your Epicor ERP application forward this season, and sew the seeds for a bountiful harvest in 2021. Ready for optimal growth? Get the Epicor consulting services or Prophet 21 services you need to get ahead of the season. Take a tour of Epicor in a future-proof environment with a free ECHO cloud hosting demo. ECHO supports all ERP systems, including cloud-ready P21cloud-ready SYSPRO.