My boss once said to me that nobody wakes up in the morning and cries “I’m going to implement anERP system!”
It’s a fair point. Apart from a few business process masochists that I’ve met over the years, few people out there really go out of their way to implement an enterprise system. Enterprise systems are costly and they drain a lot of time and energy from key resources within a company. They can be generally…painful to implement. And yet I’ve seen so many companies make the move to enterprise systems and benefit greatly from the transition, in spite of the challenges. This raises a question that I’ve had more than a few prospects ask me: “WhyonearthdoIneedanERPsystem?”
Pundits have long noted that the “E” in “ERP” is the most important of the three letters. The value in anERP system comes in its applicability to the entire enterprise and not just to a few selective functions within the organization. And while ERP has been around now for many decades, there continues to be ample opportunity for better enterprise-level integration among companies. Quite often, the “why” of ERP comes in a quick analysis of a Company’s current-state application architecture.
With many of the customers that I’ve helped migrate to Epicor’s ERP platform, I’ve observed a current state application map to include one or more of the following:
The use of manufacturing oriented work order systems for managing the shop floor. Job Shop-oriented systems can be effective in defining product structures and working them through the shop-floor, but are less effective in managing the selling and shipping of manufactured products and in comparing the resultant revenues to costs.
1980s-era ERPsystems, with one or more bolt-ons for managing product configuration and/or the shop floor. First-generation ERPsystems are generally solid when it comes to inventory management, and basic order-to-cash cycles, but are limited in many areas, and are a burden to maintain.
Paper-based systems for inventory management & time card entry—some customers are still pounding the paper when it comes to basic warehouse and shop floor transactions.
Varieties of macro-enhanced spreadsheets for doing one of many things. Spreadsheets are a great gap-filling tool, but their limitations quickly become apparent as multi-user capabilities and large data requirements become a necessity.
Based on the above, it is no surprise that companies come to us looking to implement Epicor because their current state is a drafty quilt of poorly-stitched and poorly-patched legacy applications, homegrown boondoggles, and siloed modules. Customers come to us believing that there must be a better answer, and in most cases there is. The problem is, most companies took a lifetime to grow into their patchy ponchos. At certain early stages in their relative existence, most companies can get away with the above scattershot array of systems and pseudo-systems. But these same systems become hindrances as the company looks to scale up, expand its offerings, ramp up its output, or better integrate with customers, suppliers or best-of-breed applications. As these challenges become clear, the “why” of ERP begins to take shape.
Our work as Epicor partners quite often has to do with explaining the “why” of ERP. My own “why” came to me many years ago. At the time, I was still a customer and still quite naive regarding the ERP space. Working on a process-improvement project with my company’s Vice President of IT, I asked him point blank whether our recent ERPimplementation had been a success. “Yes!” he replied, emphatically. “Why?” I responded. I was a Lean Six Sigma Black Belt at the time and was practicing my “5-Whys” methodology. Ionly needed one of them, for his answer changed the way I’ve seen enterprise systems ever since. By implementing anERPsystem, we were laying the foundation for everything that was to come. In our case it was configurability—we were an engineer-to-order company, living in anincreasingly configure-to-order market, and needed to make moves toward configurability before our old methodologies priced us out of that market. By implementing anERPsystem, we set in place the building blocks for product configurability, and our subsequent initiatives took these building blocks and reshaped the way the company did business. Fifteen years and anERPsystem later, my old company is still successfully competing in its target markets, proffering configured products, and doing so profitably.
Now every company owns its own specific point in time, and faces its own set of unique challenges, as it tries to grow and thrive in changing markets. I’ve seen a lot of good reasons for moving away from a patchwork of solutions to a more integrated and comprehensive system. My own story may resonate with some, or there may be other stories that better answer the question as to why a company might make the move to an enterprise system. This is all to say that there are a lot of reasons for implementing anERPsystem. And everyone here at the EstesGroup would love to hear your story. And if you don’t think you have a reason for implementing ERP, we’d love to talk to you about that as well.
Have a question for our consultants? Trying to determine if your company needs an ERP system?
Emerging Trends Impacting the Material Handling Industry
Pundits, progenitors, and prognosticators are apt to riff on the emerging trends of a given industry. Not surprisingly, a longitudinal view of such trends leads us to infer that the emergence of such patterns is less an instance of Aphrodite’s divinity spontaneously rising from the primordial sea foam than it is one of the all-too-human Agamemnon and his men, rowing their long boat across to Aegean from his citadel at Mycenae to the broad plains of Hector’s Ilium.
A look over the many industry tendencies that have faced and continue to face the material handling industry tells us that these trends affect all aspects of the companies involved–from the HR and finance departments through to product design and delivery. For companies producing the equipment that services the needs of the material handling industry, a few of these trends are especially noteworthy, and a number of these are important for their ramifications on business systems. Companies can no longer rely on spreadsheets and CAD drawings to compete, as industry shifts apply greater pressure on companies to rapidly supply equipment that meets these changing needs.
Below are a few items, culled from the above article, that will affect the business systems of the future, in support of the companies working within this changing industry.
The prevalence of Robotics and Automation: With the increased desire to automate as much of the supply chain as possible, the ability to move product with a minimum of human intervention becomes increasingly important. Companies need to be able to tailor their offerings to provide integrated solutions that address these requirements, and to be able to integrate these different elements into systems, not only physically, but from a sales and delivery point of view.
The increased use of sensor, wireless, and mobile technology: Coupled with automation are the needs for greater integration, between material handling subsystems, and between the overall material handling system and the facility in which it resides. From an enterprise application standpoint, the importance in being able to quickly and consistently translate new features and options into their component materials and related operations becomes of great importance.
The continued emphasis on “mass personalization”: As mass personalization continues to figure prominently in the arenas of product delivery and distribution, companies producing equipment to serve these industries similarly encounter the desire for increased personalization and configurability in the equipment used as part of the delivery cycle. No two warehouse facilities are the same, and material handling equipment frequently needs to be easily tailored to support the discrepancies between buildings.
For producers of equipment serving these industries, the challenges not only manifest themselves in the material handling products delivered but also in the processes and systems used to orchestrate the creation and delivery of these products. Making the best equipment isn’t enough if it cannot be designed, produced, and delivered at the right time, and for the right price points. In support of this, configurability continues to be of great importance, as are the abilities to quickly generate requests for proposals and rapidly engineer custom orders. With its extensive product configuration capabilities, which are tightly bound to its Bill-of-Material structures, Epicor ERP is an excellent enterprise software option for companies looking to scale up their organization to meet the challenges of this evolving industry.
Hi, I’m Brad Feakes with the Estes Group. Now, with summer a distant memory and autumn full upon us, the winter still ahead, it’s a fitting time if you’re the leader of a manufacturing company to ask yourself whether your legacy ERP system is dying on the vine.
Doesn’t it seem like yesterday when your company first turned on its new ERP system and went live? Everything was blooming with possibilities, and your company was in its earlier season with its ERP system.
And then the years slipped away, and now your organization finds itself struggling with its legacy system’s withering limitations. And these limitations become an inhibitor to future growth. The truth is, winter is coming for manufacturing companies living on legacy ERP systems.
But you don’t have to hang your head over it, the ERP market is blossoming with different options, such as Epicor’s Version 10, with it’s Microsoft centered stack, and rest service compatibility, it offers the perfect platform for scalable growth.
As you assess your organization and its IT infrastructure, you need to ask yourself the question, have you harvested all the benefits of your legacy ERP system? Are you tired of endless patches? Are you frustrated with the narrow field of vision that your current system affords you? Is your legacy ERP system a husk of its former self? And are you ready to put it to pasture? Are you ready to leave your legacy ERP system behind.
I’m Brad Feakes with the Estes Group, and I’d love to talk to you, see if could help put some spring back in your business systems.
Have a question for Brad or another one of our experts? Let us know.
You’ve heard the term Smart Manufacturing or Industry 4.0; but what does that really mean for your manufacturing company? Can a company be “Smart” and use basic software like Quickbooksor do you need to have a realEnterprise Resource Planning (ERP)system? The short answer is: yes, your company needs an ERP system to truly adopt Smart manufacturing and be ahead (or even keep pace) with the competition.
For those still wondering what Smart manufacturing or Industry 4.0 are, don’t worry, the terms are newer and only recently been used in a fairly regular manner. Smart Manufacturing is, simply put, the melding of operations technology (OT) and information technology (IT). Industry 4.0 and Smart Manufacturing are really the newest phase or a new Industrial Revolution if you will hitting manufacturing on a worldwide scale.
In order to remain competitive, manufacturers must invest in inter-connectivity, automation, machine learning, and real-time data analytics.
Holding together various systems needed to properly track and analyze the smart manufacturing data captured, is a strong ERP system, which can marry the shop-floor data with cost breakdowns, operational information, job details, and customer information, etc. I find it interesting how many manufacturers still run homegrown systems or rely on access database, excel, etc to track production, which is clunky, prone to data corruption, and does not collect all relevant data to provide a company with true business analytics.
One of our clients used a homegrown system before deployingEpicor ERP a few years ago. They noticed immediate improvements in inventory control, accurate cost measurements for their products, and better shop floor scheduling. Now, image if the same company deployed machine learning and automation married with real-time data analytic software? The potential to outpace the competition is dramatically increased.
So to get back to the second question, no, Quickbooks or other smaller software systems will not support manufacturers focused on growth since they lack the basic shop floor data collection and analytics needed to streamline your business. Manufacturers that wish to remain competitive, and have an optimized business require an ERP system.
Is your company looking to move away from small accounting systems and move to a manufacturing ERP system? Or do you have an ERP system and need to work on optimizing it? We would love to talk with you about how we can work together to make your business run better.
Have you ever told a customer that you had product in stock – only to find that you couldn’t fulfill the order because the inventory was sold or used in production before you got to it? Or have you ever expedited-in material for an important customer or job, only to have that material used to fulfill a different order or produce a different job? Or maybe you resorted to hiding parts in your desk so that it doesn’t get used to “Rob Peter to Pay Paul”. Frustrating, isn’t it? That’s whyEpicor ERP’s Fulfillment Workbench is a critical application for many of my clients.
It’s a common occurrence, in both the retail and manufacturing world, having too much demand for a limited supply and seemingly no way to manage the available inventory. Wouldn’t it be nice to “set-aside” material so that it’s available when it comes time to ship or produce the product?
Fortunately, Epicor’s Fulfillment Workbench has a great way to manage those times when demand exceeds supply. Using the concept of Reserve, Allocation, and Cross-Docking, the Fulfillment Workbench allows management to decide how to best utilize limited supplies in the face of current and future demand. The Fulfillment Workbench has the option to do “soft” and “hard” allocation. In Epicor Parlance, Reserve equates to “Soft Reserve”, and Allocate is equivalent to “Hard Reserve”. Cross-Docking in essence “Hard Reserves” material that is not yet received into inventory and keeps it from being used to satisfy demand other than what it is specifically allocated to.
The “Reserve” function places a “soft-hold” on available material and keeps it from being used to satisfy other demand. However, this “reserve” status is easily removed if that material is needed to satisfy other demand. Whereas material that is “Hard Allocated” needs management permission to be remove that status so it can satisfy a different demand.
Using the Fulfillment Workbench, you can manage inventory for all three sources of demand: Sales Orders, Jobs, and Transfer Orders (inventory coming from another inter-company location). The Fulfillment Workbench provides additional functionality, like Cross-Docking, sorting by priorities, allocation templates, and many more. By utilizing this incredibly useful tool, managing your inventory supply becomes a much less complicated task, and helps make for satisfied customers and efficient manufacturing personnel.
Do you have more questions on Epicor’s Fulfillment Workbench or want to learn more about the product?
Internal Planning is Key to Forming ERP Search Questions
Let’s face it, many articles have been written about companies “Outgrowing QuickBooks” or “Signs you need an Enterprise Resource Planning (ERP) system”. But what those articles don’t usually talk about is what you can do to prep your team internally for an ERP software system; a comprehensive sales, finance, and operations system. Planning is one of those words that tends to make people groan because they know it means more work, lots of discussions, and often seems like a stalling tactic and time waster. But ultimately, asking detailed internal ERP search questions is paramount to a successful ERP evaluation and implementation.
If you ask any Military General or Combat Veteran if they would go to battle without some semblance of a plan, they would probably laugh or just walk away and say nothing in response. There is a reason that ERP implementation rooms are nicknamed “War Rooms” since heavy system testing is done and current company practices come into question.
What are some of the right internal ERP search questions to ask for planning purposes? Questions like system design, usability, industry specific functionality, cost, and implementation assistance are just some aspects to consider when looking for an ERP system. I look around on the web, and I find a lot of system questions written by software vendors, but not a lot of internal company questions to ask or considerations that need to be discussed. Having talked and worked with many, many companies over the years during their ERP searches, I wanted to give some examples of planning areas and questions for companies to prep internally.
10 Internal ERP Search Questions to Get the Project Planning Started:
What does my company need and want to accomplish with an ERP System?
Departments that need access
Time frame for evaluation purchase, deployment phases/locations, and full usability
What are the challenges of my company’s current business software? Why is it no longer meeting the needs of my company? Look at this from a department level:
Sales & Marketing challenges?
the Warehouse(s) challenges?
Research & Development challenges (if applicable)?
Human Resources challenges (if required as part of an ERP search)?
Is my company fully utilizing current systems in place and/or is the current software potentially sufficient with added training? (I suggest talking with an expert consultant of that software if its an ERP system to see if the current software works but isn’t being used correctly)
Does my company have specific compliance or auditing conditions that are of concern? Examples: Medical CFR, Aerospace & DoD DCAA, Medical Records HIPAA, Internal export FCPA, Electronic Underwriters UL, Federal Airlines FAA, Finance SOX etc.
What are the key aspects of the compliance(s) in relation to software, i.e. what data needs to be captured?
What do I need an ERP to do in order for my company to meet the compliance? Reporting?
Do we need a SaaS (Cloud-based) solution, On-Premise (due to data security concerns), or a Hybrid / Hosted System (which combines Cloud & On-Premise in a way)?
How do we plan to care for the ERP system? Do we have IT Staff in-house to support an On-premise solution or is there an Outsourced IT Firm we can work with to help?
Do we need a system that will work for 3 years, 5 years, or 10 years?
How important is “scalability”?
Modular system to add on functions as a company grows?
Multi-company or multi-site requirements?
What are the key functions we need the system to do? Look at this on a department level:
What does Production need?
What does Services Need?
What does Finance need?
What does Executive/Owner(s) need?
What does Sales & Marketing need?
What does Purchasing need?
What does the Warehouse(s) need?
What does Research & Development need (if applicable)?
What does Human Resources need (if required as part of an ERP search)?
What are the “nice to have” or “wanted” functions, beyond the base needed requirements?
What does Production want?
What does Services want?
What does Finance want?
What does Executive/Owner(s) want?
What does Sales & Marketing want?
What does Purchasing want?
What does the Warehouse(s) want?
What does Research & Development want (if applicable)?
What does Human Resources want (if required as part of an ERP search)?
What is a realistic budget and ROI for a new ERP system?
Licensing budget – per month spending (cloud) or fully purchased or financed system?
Implementation budget (research firms say to estimate 1 to 2 times the licensing budget for implementation costs.
Software Maintenance, etc. should also be factored into a budget
Hardware Systems requirement budget (especially important for On-Premise software which basically requires a data center in-house)
Additional personnel / staffing requirements to support a new system
What time frame do we expect to see an ROI (Return On Investment)?
Do you have additional questions or looking for more information? Is your company looking for an ERP system? Want to chat with the author? Contact us and we’ll do our best to help.