Why is Change Management Key to ERP Implementation Success?

erp implementation

Blog Post Written By | K3 Business Technologies

It’s one of life’s contradictions: When you are making improvements, facing even the most positive change is hard, it can feel like a bad thing. In the retail industry, ERP implementation is a very good example. The advantages of ERP software for the fashion and apparel industry are proven, from increasing profits through improved forecasting to optimizing your organization’s operations to simply save time, but the journey of implementing and landing a new system is long and hazardous.

Once the most suitable ERP system has been picked, your entire organization will be staring down a huge shift. And while you’ll all know intellectually that the improvements are great, the new systems and new interactions are bound to involve discomfort, high emotions, and yes, bunches of stress. The key to overcoming the awkward elements of change so you can fully realize the benefits of ERP? That’s where a concept know as Organizational Change Management comes in.

Panorama Consulting Solutions puts it in perspective this way:

“These changes in business processes, which are inherent in any successful ERP implementation, create changes in corporate culture and climate. Though less obvious, perhaps, than changes in job functions, these subtle shifts will be very important to your staff and must be managed to avoid resentment, fear, and anxiety.”

A couple of key steps

Here’s a bird’s eye view of the key steps involved in applying OCM as you begin your ERP flight:

1. Take time to establish a project charter

The project charter is simply your retail EP team’s concise statement of core goals, objectives, and intent that can serve as a map for whatever comes next, according to ERP Focus. if you skip this step, you miss the chance to establish a vision for your project.

2. Present an overview and share knowledge with everyone affected (and that’s everyone)

Employees need more than training to understand the need for (and importance of) the new ERP system implementation in the company. At a minimum, you’d need to do your best to communicate why your company chose ERP, how the system will improve jobs and how their particular position will be affected. 

3. Do an ample amount of training

While the retail business is famous for its quick learners, you can’t underestimate the amount of training you’ll need to implement ERP for lasting business success. Remind yourself that literally the entire organization has experienced a disruption in its flow and duties, and plan education and training accordingly.

Start with ERP-related training to ensure that employees learn the software, sure, but also bear down on the kind of training that lets everyone learn the new business processes. Follow through with training that emphasizes the new corporate culture and any shifts in employee interactions. it will be tough and take a while, but the shift to an optimized and highly-profitable business model through ERP will be worth all the effort.

4. Be sure your support is evident from the top down

One of the best ways to manage the change that comes with ERP implementation is to make sure everyone knows the whole company is dedicated to its success. So present a unified front. Executives, in particular, should support the change fully and make sure employees company-wide know they’re behind the effort. If top management doesn’t engage with the process or implementation, employees will notice and their own commitment will flag.

K3 business technologies have a number of solutions for the retail industry, to find out more contact us on  info@allonline365.com or  +27 (21) 205 3650.

www.allonline365.com

Optimizing Time to Market in Fashion

time to market

K3 Technologies Optimizing Time to Market

Getting fashion merchandise to market with greater efficiency is not a matter of fixing one facet of the supply chain or another. Success requires a holistic, end-to-end approach. Learn how business process transformation and integrated ERP technology can help.

There is tremendous pressure to shorten cycle times and get fashions to market much faster. This need to optimize time to market impacts almost every link of the supply chain, from design to delivery.

For too many apparel retailers, inefficiencies are eating away at their competitiveness. Executives recognize that decisions made closer to the market are bound to bring stronger results, and they are looking for solutions that are fast and easy to implement. These solutions need to address multiple pain points where time and money are lost, from pre-season planning and design through production, logistics, and allocation to end-of-season markdowns and liquidation.

Aided by the latest integrated ERP technology, there is an opportunity to squeeze time out of traditional processes and perform tasks much more efficiently. By doing so, fashion companies can streamline the concept-to-consumer cycle and book sales at the highest possible profit margin.

Within each supply chain segment, an end-to-end IT solution can help apparel brands and retailers to:

  • Execute activities concurrently instead of sequentially
  • Standardize processes and data
  • Automate communications
  • Integrate and centralize information so that there is one version of the truth.

Pre-Season Business Planning: Greater Visibility into Reliable Data

During the critical planning phase, many apparel decision-makers have had to make commitments without the benefit of current trend information or reliable forecasts. They often have had to pull historical sales data from separate wholesale, retail and e-commerce systems to forge the best-laid plans they possibly can. But by the time they are creating sales orders for the upcoming season, there could be business factors playing out that would materially change their current course – if they only had clearer visibility into those factors.

To combat this problem, companies can utilize ERP technology to more fluidly compare plans to forecasts. As pre-season planning progresses, the business can evaluate forecasts, which will change based on actual sales, customer behavior and market information. They can see how forecasted results affect gross profits, volumes, and sourcing. Then they can adjust their future business plans accordingly and take steps to mitigate issues that may be building up during the current season.

An accurate forecast may only be available weeks before a season starts, whereas the business plan typically is in place months or a year in advance. When fashion professionals can truly leverage both, they can better see the best mix of product types they need to stock and sell to hit their gross margin targets.

For example, after one week of pre-season spring sales, there could be a new forecast showing a 10 percent decline in sales vs. a planned increased of 5 percent. The business can then take action to try to address this discrepancy, both for future seasons and the spring season. Planners and salespeople can look into their ERP solution to see the margin made on sales orders by both the order line level and the overall order level. This provides helpful clarity into where orders might be adjusted during this forward-sales phrase before garments are actually produced. The fresh insights from the forecast also can be used to make adjustments in material procurement and production capacity commitments for future seasons.

Putting greater emphasis on planning and leveraging stronger data can help companies enhance product lifecycle management, says Sonia Hernadez, and associate partner with The Parker Avery Group, a strategy, and management consulting firm focused on the retail industry. “Many fashion firms are struggling with the high rates of change in collections and assortments,” she says. “Customers want season change more frequently than twice per year, and assortment planning tools and processes are not keeping up with the desired amount of change needed.”

By using technology to get a better read on the business, companies have a chance to get the product’s lifecycle, beginning with the plan, off to a stronger start. “Some firms focus on the front-end (product sourcing), and others focus on the back-end (markdowns and end of life), but too many are missing a good plan that is data-driven for end-to-end product lifecycle management,” Hernadez says.

In his blog post, “Predicting Buyer Journeys and Inventory: Retail Future in a Nutshell,” Sabir Anand, vice president of research and principal analyst, EKN Research, also addressed the missed opportunities when plans are built without the latest insights. “A sizeable volume of inventory is not based on customer science, reliable forecasts or likely demand scenarios related to prospective shopping patterns or sales trends,” he said. “These problems exist not only due to lack of reliable and timely customer insights but also due to legacy ERP, business intelligence, demand forecasting, and inventory management systems.”

With newer technology, such as predictive analytics, “retailers can analyze customer and marketplace information that can be used to triangulate demand forecasts with merchandising plans and to respond to changing market dynamics in real-time,” he said.

Design and Pre-Production: Standardize for Faster Speed

One of the greatest time-to-market challenges facing fashion enterprises is a lengthy design/development process that starts very early, long before designers can see which trends are hottest. This traditional calendar drives huge volumes of work on styles that may never see the light of day. By some estimates, only about 30 percent of early concept sketches make it into final collections.

Product design often begins nine to twelve months before styles are due to land on the retailer selling floor. Multiple fashion businesses study the same sources of trend information while trying to maintain unique looks targeting their consumer markets. Of the initial designs they create, companies may drop half of them as they get closer to the market and decide some styles are not winners. Yet before that happens, weeks if not months could be spent developing samples, conducting fittings and making revisions.

This problem can turn into a crisis as companies face intensifying pressure to turn out more frequent collections. Demands mount on teams as they are forced to manage more products without automation to help them or meaningful market data to guide them. “Commitments on end products are made six to twelve months in advance of demand, sometimes longer,” Hernadez says. “Many companies are still trying to get closer to demand signals with little in the way of data intelligence tools and/or teams with product and customer analytics skills. ”

When the information that helps creative teams know what to design is significantly better, there is a major reduction in workload and incurred costs. To buy time and wait for clearer market insights, companies must reclaim precious hours, days, and weeks (or more) currently being drained by production-intensive processes, such as sample making, and rounds of unstructured communications about specifications and product details.

“The bottom line in all of this – the necessity to get it right the first time and build and protect the brand for the long term – requires a holistic, end-to-end approach to brand-related requirements management, as anything less than results in suboptimization, continued inefficiencies, and islands of disconnected automation and information,” said PLM consulting firm CIMdata in its paper “Delivering the Brand…and the Business: Can Your Current Processes and Tools Support Today’s Complexity?”

There are integrated ERP solutions with robust product development capabilities geared to help fashion businesses standardize their pre-production processes and communications. For instance, newer systems allow technical design teams to work on perfecting pattern blocks and developing standard fits separate from the regular flow of seasonal design work. This approach is much more efficient than trying to finesse the fit of every single new style.

These solutions also provide standardized libraries for materials, colors, and artwork, plus standard technical pack reports to capture details for suppliers as they build samples and ultimately production orders. In addition, suppliers can access all product information through cloud-based portals, which serve as gateways for sharing details, bidding on projects, and exchanging production progress updates between brands, suppliers, and service providers. For designers and planners, pre-defined choices, drop-down menus, and aggregated views enable efficient handling of multiple product dimensions.

When this front-end PLM functionality is integrated with downstream business processes, it also allows teams to easily access and apply historical sales data and the current financial metrics, such as gross margin and recommended retail pricing, to their line plans.

The sooner businesses make the transition to this type of integrated technology, the better, according to CIMdata, which stated: “The key point is to not delay, as every product developed and launched from within your current environment is probably leaving money on the table as well as carrying a high risk of failure.”

Managing the Product Lifecycle: Pre-Season to End-of-Season

While the acronym PLM often gets associated with pre-production activities, the work of product lifecycle management never really ceases until the product or collection reaches its true end of life. As collections fall into place, companies enter a whole other realm of decision-making – one in which integrated technology is more important than ever.

With a single system of record, companies cut down on confusion over calendar management. When teams access a shared calendar, they gain a much greater understanding of the overall business and how decisions and delays affect workflow and work pressure. “Holistic calendar management is a common challenge,” says Hernadez. “Historically and even today, many fashion firms have a merchandize or planning calendar, a marketing calendar, and possibly a separate sourcing calendar. Without the ability to integrate all components, and align the key milestones, there will always be obstacles in understanding and improving time to market.”

To streamline and reduce complexity in pre-season planning, some apparel brands are pre-allocating products based on rules. With this practice, they can increase customer satisfaction and reliability by pre-allocating future stock to a customer early in the planning process based on order and/or customer priority. Advanced ERP solutions can automatically alert the brand if there will be any issues in actually allocating the promised goods, at which point the company can immediately update and change sales orders, possibly replacing some products with available goods to ensure delivery. Throughout the season, this automated allocation based on rules continues, and teams only have to deal with exceptions or situations in which the planned product distribution is not possible.

In planning for the optimal stock, fashion businesses also can institute more pre-packs into their portfolios. Instead of selling “open sizes”, which allows customers to pick and choose any size assortment, the fashion brand can offer pre-packs with relevant size breakdowns based on their knowledge of regional markets and the customer’s target consumers. As a result, apparel manufacturing runs can be more predictable and profitable because the company can optimize fabric utilization. Then the expense of producing sizes that have less demand, such as XXS, is spread evenly across more orders.

In addition to helping optimize manufacturing efficiencies, the use of pre-packs minimizes human intervention and manual handling when products reach the retailer. Cross-docking and bonded warehousing also can reduce the need for manual handlings, such as unpacking sorting, repacking, by the retail customer. Both cross-docking and bonded warehousing require solid administration and clear instructions, all of which can be systematically and centrally controlled within the enterprise solution.

The centralized nature of an end-to-end ERP solution also is critically important for managing end-of-season planning, logistics, and markdown modeling. Retail teams need access to a single version of the truth and clear rules and guidance on when to adjust prices and move merchandise from store to store or to off-price outlets. All of this ties back to the core margin planning tools so instrumental in setting optimal stock to begin the season. The ERP solution helps guide managers as they try to sell the most merchandise within the target time window and quickly act on overstock situations. These decisions and tasks need to be managed centrally so as not to burden retail store personnel, increasing costs and consuming time.

www.allonline365.com

Resource Credit | K3 Technologies

Leveraging ERP systems to embrace change in the fashion industry

erp systems

What is ERP?

We live in an amazing era of technology-driven change.  The way we buy fashion has been transformed: shopping has lost the shackles of the traditional storefront and is now at any time and every place.

Definition

“ERP is designed to enable a total view of what is going on in an organization at any instance and over time, so you can problem-solve on the ground and plan for improved efficiency in the future. Its main function is to pass accurate, timely information back and forth within a business, between people and technology in order to prevent miscommunication, speed things up and reveal possible inefficiencies.”

Consumers are able to choose any number of ways to interact with your brand from brick-and-mortar stores, mobile phones, the Internet, to social media. As such, the way fashion companies design, manage, sell, communicate, and market products have changed beyond recognition. Our need to keep up is ever more important as we aim to find balance in the key principles of low-cost goods, flexibility. quality, on-time delivery, and speed to market coupled with a loyal customer base. None of this is possible without leveraging the incomparable power of ERP software.

ERP software, if managed well, can be the catalyst that takes your business from good to great by eliminating expensive, time-consuming, and error-prone interfaces and replacing them with a new and efficient way of working. From the initial concept to the product in-store, ERP is changing the face of the clothing and fashion industry.

The importance of leveraging technology

Leveraging technology in ERP is the difference between flat sales and achieving exceptional growth. The most successful companies will be those that take advantage of web-based technology by implementing systems built on sound existing infrastructures and well-functioning ERP systems. Everything from apparel, and footwear, to accessories to name a selection, has been greatly influenced by developments and innovations in technology.

One of the biggest effects has been in production processes where automation and speed to market have reduced lead times allowing ‘fast fashion’ to happen. Gone are the days where design, production, order processing, and distribution are done by hand. Globalization has resulted in a need to forge tighter links up and down the supply chain to integrate business functions and allow data to be shared across many boundaries and divisions.

As companies grow it becomes increasingly important to engage with an effective ERP system, one that is geared to the fashion, apparel and textile industries and one that allows a fast analysis of trends and developments.

Trends in enhanced ERP systems

Current trends in ERP systems include the move toward standardization, to cloud-based solutions, and a move to more customer-centric approaches:

Move towards standardization

The current trend in ERP systems is moving away from customization to standardization. The benefit being that generic ERP provides everything retailers need without the lengthy processes involved in tailoring systems to individual nuances. More often than not, nuances identified by companies, in fact, do not exist. Retailers need to trust the expertise of existing ERP systems. There are also clear financial benefits in taking advantage of a tried and tested, standardized package. Customization costs money, takes longer to develop, and runs a greater risk of being unable to integrate with existing company systems such that by the time a package has been customized any benefits have been lost.

A great ERP specialist will use their knowledge of fashion and apparel to adapt and enhance an existing ERP package and pre-configure it to specific business models, processes, and tasks. Functionality such as being able to consolidate inventory in pre-packs with unpack/repack capabilities and to be able to automatically adjust customer specific prices will ensure flexibility and scalability to drive future growth and expansion.

Move to cloud-based solutions 

Cloud-based ERP systems have many advantages and few drawbacks. Cloud computing systems are cost-efficient and have been found to enhance worker morale and by extension, productivity. To gain the benefits of cloud-based systems, the ERP solution must be scalable to fit business needs and one of the following options should be adopted:

  • Private cloud – Best for use in conjunction with legacy systems that do not contain built-in cloud capabilities.
  • Hybrid solutions – Using only those elements of the cloud systems that are essential to their business needs.
  • Public cloud – Systems based entirely in the cloud. Whilst this solution might be the most costly in terms of time and money, there are long-term benefits to be gained.

Why ERP is critical in the fashion industry

Fashion retailers are involved in one of the most logistically complex industries. Clothing retail has much shorter product lifecycles in comparison to other sectors, and the pace of change in demand is significantly higher. Each season a whole new collection is produced and in recent years this has moved to quarterly refreshes and fast fashion lines. We are challenged by keeping track of merchandise (that ranges in style, size, fabric, and color-way), whilst anticipating demand, forecasting sales, reducing delivery times and minimizing unplanned markdowns.

The need to assess manufacturing costs, sorting and extracting styles to be produced makes managing end-to-end processes incredibly complex. Being able to handle all this information in one system means more efficient and accurate business decisions can be made thanks to ERP software.

Key benefits of an efficient and effective ERP system

ERP integrates all departments and functions into a single computer system able to serve each department’s needs. The following summary highlights the key benefits but relies on selecting and implementing the best ERP solution for your company.

Integration 

All aspects of the business process from concept to consumer can be integrated. ERP aims to integrate all departments from design, manufacturing, financial, customer services, sales, and distribution. Productivity and work-flow are significantly improved.

Cost savings 

One of the key benefits of an advanced ERP system is the ability to focus on cost control. By inputting data in one place, with ‘one truth’ and managing the inventory from concept to solution, the cost savings can be significant. By centralizing all key product data, savings can be made on sourcing similar materials and forecasting more accurately. For example, where fabric is common to a number of different garments across different divisions, ERP helps to calculate the total fabric required and so better deals can be achieved. In addition, ERP helps to improve communication and flow within the company. For example, any changes to the fabric such as composition or washing instructions can be centralized which makes communication to relevant teams seamless and foolproof.

One truth 

Effective ERP systems enable managers to see comprehensive statistics on costing and revenue allowing adjustments to be made to production lines, sourcing of raw materials, and other contributing factors. Ultimately there is no chance of data manipulation, with the use of ERP, user input is monitored and each input logged so that it is easy to see which person is responsible at every stage. Having the right information in the right place at the right time anywhere in the world undoubtedly improves productivity.

Report production 

Reports can be compiled in a short time with pre-sets entered and run on a daily basis. Summaries for use in management meetings provide total operational overviews, in stark contrast to reports assembled by Excel, ERP allows concurrent dates to be entered, meaning time will be saved and management can have an accurate picture of what is happening across the business from production processes to planned dates for item availability in the warehouse. ERP means that optimum inventory can be maintained. Put simply, time and money investment can be allocated to areas that need attention quickly, efficiently, and accurately.

Reduction of duplicate work 

It is hard to imagine how much data is duplicated from concept to customer and how many times information is miscommunicated. Automating operational tasks and providing easy access to information means significant time savings can be achieved, and the risk of human error is greatly reduced.

Flexible and scalable solutions 

The ability to take full advantage of the power of an enhanced ERP solution is to choose a partner who is able to be as flexible and dynamic as your organization. In embarking on the implementation you must believe in the growth capabilities that your company can achieve. Therefore choosing a partner that has scalable solutions that are future proof is of utmost importance.

Customer centricity- Food for thought

As consumers integrate the latest technologies into their everyday lives they demand more from retailers. The modern consumer expects every interaction across every channel to be seamless and simple. Further, they expect to be able to shop at all times of the day (and night) and to have fast, flexible delivery options available to them at all times too.

Gaining competitive advantage 

To ensure that customer experience across all channels delights and excites means smarter systems and better processes are called for. As well as a new perspective on business process management, the key to success is to build a supply chain that services the full spectrum of customer needs using ERP software. Consumers enter a store or go online expecting to be able to locate the item they want when they want it.

Stock availability is critical to match each individual customer with the particular item they want. By utilizing the power of an enhanced ERP system, retailers are able to have the inventory levels of their worldwide stock at their fingertips. It makes the difference between losing a sale and gaining a customer.

The fit of the garment 

Brick-and-mortar retailers are beginning to see the effect of poorly fitting clothes and footwear in high return rates via online shopping. Customer reviews hold vital information to assist other purchasers to understand how the garment will fit as well as allow buying and merchandising teams to make simple amendments for the future. Simply put, yet more valuable and actionable data that can be trawled using ERP software. However, what if the description of that garment is able to contain far more fit information about the garment than we see currently? All the size data is held in the specification of the garment and therefore in the ERP system as well. In the future, we will see a marrying up of the size information and the communication to the consumer. The only way to enable this seamlessly is via an ERP system designed for the clothing industry.

Understand your customer’s size and shape

To improve the fit of clothing retailers need to go back to the start of the process and become truly customer-centric. However, it is hard to know what the shape of your customer is. This is where research needs to be combined with big data to ensure both attitudinal, factual, and behavioral indications are taken into account. This is perhaps where the future of retailer/ERP integration is leading us.

Marrying data analytics and qualitative research

In utilizing an effective ERP system, companies are able to manage and find actionable insights behind customer behavior to predict future activity. However, by incorporating smaller data sets to understand the psychology of the audience such as interviews, focus groups, and other research methods, businesses can start to access the ‘why’ behind market trends. Techniques such as immersion sessions work well to bring consumer sentiment to the front of the minds of decision-makers. ERP software then really is at the foreground of a customer-centric approach.

To find out more about how an ERP solution can transform your business, contact allonline365 on  info@allonline365.com or +27 (21) 205 3650.

www.allonline365.com

Resource Credit | K3 Technologies 

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