Warning Signs that you need to change your ERP

 

erp change

Blog Written By | ERPFocus

6 Warning Signs that ERP Change Is Needed

Your ERP system is the scaffold of your business. It connects and supports all aspects of company activity and culture, so any ERP change should be well informed and researched. This research should be done on a case-by-case basis, during which you should look out for these key warning signs.

Major Business Changes

Any large-scale changes to a business will affect the suitability of your legacy ERP system to business needs. In many cases, legacy systems just aren’t appropriate following a major business change. During mergers and acquisitions, the collision of different company cultures and activities make a necessity of ERP change. Equally, changes in market and location can be difficult to integrate into an ERP system that was implemented on past requirements and specifications. For a legacy ERP system to survive these changes, it must be adaptable.

Poor User Experience

Your workforce’s experience with your ERP system is crucial to its success. They are the day-to-day users, and if they are not happy with legacy systems, it will impact on their work and your company’s profitability. In order to gain support from the workforce, ERP change must strike a delicate balance between an intuitive product and an innovative product. It must begin to incorporate important user trends such as mobile and bring your own device (BYOD) support while maintaining ease of use and low training costs.

Lack of Compliance

Nothing may drive ERP change – and business change – more than issues of compliance. Meeting regulatory requirements consistently and efficiently is not just a matter of company culture, it is often a matter of law. The compliance of an ERP system is directly affected by its age.

Vendor Growth Hacking

Perhaps a non-traditional warning sign for ERP change, growth hacking can be a dangerous business when it comes to ERP. Growth hacking involves the change in company products or activity based upon current market trends. This is a great thing if executed well. If executed poorly it can lead to poor products and lawsuits. Growth hacking in the ERP market can take the form of acquisitions from ERP vendors and new product functionality. Both should be treated with caution. How well integrated with my legacy system is the new product/functionality going to be? Is it going to cost me more? Do I need it? All these questions should be asked. The answers may provoke ERP change.

Spiraling Costs

No list of business variables would be complete without the cost. If your legacy ERP is beginning to seem like an endless sinkhole for company cash, ERP change may begin to look like a cost-saving exercise rather than an outlay. Whether direct (upgrades, support) or indirect (the need for manual processes), legacy ERP costs have the potential to dramatically affect your ROI and profitability.

Low Vendor Activity

When your ERP vendor activity drops, alarm bells should ring. A ‘vendor silence’ – characterized by a lack of product updates and correspondence – can be a warning sign that ERP change is needed. Unless you have the support and regular updates from your ERP vendor, your legacy ERP will become outdated, leading to issues with compliance and user-experience.

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Looking at Warehouse Management in ERP

warehouse management

Blog Written By | ERPFocus

ERP for warehouse management

If you are a manufacturing company that engages in distribution as a sideline, simply as a means of delivering your manufacturing output to customers, then you are likely to be both appreciative of and possible overwhelmed by warehouse management functionality in ERP. On the other hand, if you are primarily a distribution company, then you likely know how and why you make money and, when choosing distribution software, will emphasize the features warehouse management that contributes the most to your operation.

Labor efficiency in warehouse management ERP

If labor efficiency is the key success factor in your distribution operation, you will want ERP to deliver a warehouse management system that has a robust capability to optimize pick-and-pack strategies. One strategy might be to simply minimize pick time, while another if space is limited and trailer turnover is critical, would be picking and staging complete orders most efficiently. The right warehouse management ERP should offer different picking options, allowing you to experiment and find the one that suits your company.

Levels of control

For some distribution operations, labor costs associated with picking, staging and loading a shipment are minuscule compared to the cost of an incomplete or erroneous shipment. Imagine that you were responsible for shipping the lighting and wiring kit for a new restaurant. The truck arrives on site, the wire is there, the light fixtures are there, the switches are there, the circuit breaker is there, but the electrical conduit…somehow didn’t get on the truck. The electrical crew just stands around waiting while the project manager desperately scrambles to postpone the arrival of the flooring and furniture, In this case, your warehouse management system needs to have strong controls and redundant verification loops.

  • Did everything for the order get picked up?
  • Did everything for the order get staged?
  • Did everything for the order get on the truck?

Bin Control

Another facet of warehouse management ERP is bin control and your required level of sophistication. When designing your controls for inventory control in ERP, you will learn that if you put generic inventory into a bin location, and then remove it in its entirety and ship it, you probably need a different level of bin complexity than if you remove 100 units of inventory from a bin, count out forty units for an order, and return sixty units to the bin. And that is a different level of sophistication from being easily able the forty-unit order, and return forty previously allocated units to the original inventory location.

At the end of the day, using warehouse management effectively within (or without) ERP is about emphasizing capability when it aligns with your business strategy and simplifying as much as possible the features that are not mission-critical. If you are not able to do this effectively, you may end up with a warehouse operation that is more complicated than you want without any additional benefits. If distribution is not your primary source of profit, then you may have to take what you get; the ERP package will be decided on for reasons other than warehouse management. If this is the case, be prepared to overman in the short term, and figure out how to automate in the long term.

Dynamics 365 Business Central, on the other hand, offers a wide range of modules for businesses to grow into. You can keep your finance, sales, operations, and warehouse management under control – all in one system. This adaptable ERP offers a wide range of benefits for small to medium enterprises. To find out more, contact allonline365 to speak to one of our consultants. Call us on +27 (21) 205 3650 or email  info@allonline365.com.

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Supply Chain and Master Data Decisions in ERP

supply chain and master data

Blog Written By | ERPFocus

ERP and Supply Chain: Master Data Decisions

It is often surprising for a supply chain team to see how much master data they create and maintain when its collected and organized in one place. Because ERP generally provides increased functionality, there is also usually additional master data required to use that functionality. Without attempting to examine every master data field in ERP, discussed below are three broad areas that hopefully help you to start thinking about supply chain master data issues.

1.  Data ownership when there is overlapping responsibility

An easy example of this category is the bill of materials. Many functional areas depend on the information in the bill of materials: finance for product costing, the supply chain for material demands, engineering for spec sheets or blueprints, and development for new product adoption. Which of these functional areas should have the ultimate authority over the numbers and relationships in the bill of materials? Typically, in legacy, every functional area created their own version of a BOM, because every functional area had a different agenda which marginally affected the data. Costing wanted numbers that reflected the lowest possible product cost; the supply chain wanted higher numbers to ensure they never ran short of anything. The best candidate for ownership of this type of data is the one with the least agenda, such as development. The paradox is because they have no agenda, they have no real passion for accurately maintaining the data.

2.  Yields and tolerances

This tends to be a greater issue in process manufacturing than discrete, but it needs reasonable consideration in both types of industries. In this context, “yield” is referring to the calculated expectation of how much first quality product will be produced on average from a fixed amount of components. “Tolerances”, in this context, refer to how much over or short you can be in filling an order, and still be of value to the customer. These two data pieces work in tandem as a hedge against manufacturing variation to determine how consistently you can satisfy customer expectations.

3.  Computing rules

These are shorthand codes that tell the MRP portion of ERP how to behave. Each rule is generally understandable on a stand-alone basis, but as the rules begin influencing each other, the results – while always logical – can be complex, unexpected, and unwanted. These computing rules involve everything from how to treat safety stock inventory to whether a material is purchased or manufactured to whether a material is make-to-order or make-to-stock. To master these rules generally involves experimentation, rather than intuiting the setup based on the written explanations.

To the maximum extent possible, assign informed people to figure out how to set up supply chain master data as soon as legitimate testing can occur. These people don’t have to own master data forever, they just need to discover and document what the right settings are. In the supply chain, master data has almost as big an impact on ERP performance as the configuration does.

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