Posted by Linda Nist-Gudeman on Mon, Jun 28, 2010 @ 11:24 AM
Simplifying ERP Systems for Wholesale Distribution and Manufacturing series continues with Inventory Optimization for cash flow improvement. An additional Inventory Optimization article is forthcoming.
Key Performance Indicators Dashboard
Crucial to your competitive advantage is the ability to know your financial standing at any given moment and all that effects it.
Using a completely integrated ERP system you interact daily with key performance indicators (KPIs) via a centralized ERP dashboard. Knowing your financial standing helps you improve cash flow by intelligently interacting with your data so you can take proactive steps.
Inventory Optimization Scenario 1:
By reviewing your global inventory from a centralized ERP dashboard you can see an immediate snapshot of KPIs such as:
• Inventory valuation
• Inventory turns
• Fill rates
• What items are under the minimum
• Suggested replenishments
With this KPI information you can proactively take action, avoiding any adverse consequences. Imagine getting a snapshot of suggested replenishments to avoid the expense of back orders.
Inventory Optimization Scenario 2:
By using the advanced, automated tools inherent in an integrated ERP system, buyers can make informed procurement decisions. Buyers also receive assistance with advanced purchasing suggestions when the inventory management system automatically analyzes items that should be ordered using your collected data.
• Previously, inventory management was manual, cumbersome, perhaps even impossible, to accurately gauge your needs. Now, using purchasing calculations presented by your inventory management software, your buyers can utilize the most efficient buying method based on formulas which analyze your historical and forecasted data along with variables such as min/max, safety stock, and daily usage.
The inventory management system analyzes current needs, future needs, and vendor targets for special pricing and available quantity discounts.
• Your buyers are presented with suggestions across different product lines and multiple warehouses to take advantage of buying opportunities.
• Your buyers can analyze the suggestions and, based on any other human-known variables, they can update the suggestions.
• If desired, your buyers can further analyze other vendors you purchase inventory from by drilling down to compare vendor prices, deals, and lead times.
• With a click, buyers create purchase orders and print, fax, or email the POs.
• Along with suggestions, your buyers receive proactive, automated alerts for stock that falls below the reorder point and immediately deals with this exception.
Using your ERP software you optimize your inventory with suggested purchasing and tracking vendor deals and automated alerts. In so doing, you reduce your inventory carrying costs by replenishing inventory to optimal levels while taking advantage of vendor deals.
Wouldn't "What-if?" return on investment scenarios be helpful to allow you to see the effect reducing carrying costs has to your bottom line? ROI scenarios help you analyze and visualize the effects an integrated ERP system with advanced inventory management can have on your profitability.
With their newly gained efficiency, your buyers now have time for additional inventory management on even more profit-oriented tasks such as reducing dead stock, negotiating better prices with suppliers, or reviewing product mix? What else is on your buyer's to-do list?
You may be surprised to see how easy optimizing inventory with ERP can really be. To see how you can increase productivity across all departments and thereby reduce operating costs, sign up for our ERP simplified series.
To further simplify your business, learn more about SaaS ERP, Software-as-a-Service, for distribution,manufacturing, and retail.
Posted by Linda Nist-Gudeman on Wed, Jun 23, 2010 @ 12:49 PM
SaaS ERP for Distribution, Manufacturing, and Retail has numerous benefits for your business.
Top among them:
• No up-front investment for hardware and software licenses
• No on-premise application server means your IT skill-set needs are minimized
• Remote access for employees and trading partners
As SaaS ERP is getting more and more headlines, rightfully so, how do you determine if SaaS ERP is right for your business?
Begin by answering these questions for yourself:
To CAPEX or Not
1. Do you prefer your IT costs to be expensed or to have long term debt on your books?
Inventory Is King
2. Would you prefer to keep your credit line available for inventory?
IT Skills
3. Do you have the skills to manage an on-premise data center?
Hardware Maintenance
4. Do you want the server hardware investment and maintenance that goes with it?
Bandwidth of your Pipeline
5. Would your number of users exceed your bandwidth? This will require a bandwidth analysis for an accurate answer.
6. If applicable, would you be able to get the bandwidth to support sub-second response time for such applications as integrated conveyors?
Growth Flexibility
7. Would you like the option to move to an on-premise model based on your growth?
Training Bucks
8. Would you prefer to only invest in user software education, not server hardware, to run your business in a more innovative model?
Accessibility
9. Do you have a need for remote employees or dealers to access the system from anywhere?
Integration
10. What other applications do I need to integrate with the ERP system?
Gut Check
11. Are you comfortable operating in the cloud? If not, list your concerns.
To further refine if
SaaS ERP is right for your business please contact us for an assessment.
Posted by Linda Nist-Gudeman on Thu, Jun 17, 2010 @ 03:07 PM
Simplifying ERP Systems for Wholesale Distribution and Manufacturing series continues with Accounts Payable Management for cash flow improvement.
Automated management of A/P invoice prices simplifies this previously manual process. Also, crucial to your competitive advantage is the ability to know at any given moment what you owe and to whom.
Key Performance Indicators Dashboard
Using a completely integrated ERP system you interact daily with key performance indicators (KPIs) via a centralized ERP dashboard. Knowing your financial standing helps you improve cash flow by intelligently interacting with your data so you can take proactive steps.
Accounts Payable Scenario 1:
By reviewing your global A/P from a centralized ERP dashboard on a daily basis, you can understand your cash flow needs-what you owe and to whom. By sorting each of your payables aging buckets in descending amounts you can see to whom you owe the most money.
• For further scrutiny, you can drill down into each invoice and analyze the detail of purchase orders making up any invoice.
• By reviewing your replenishment needs inside the centralized ERP dashboard, you can prioritize payments to each vendor you use.
Daily management of your accounts payable improves cash flow. It is also keeps your inventory optimized with vendor payment analysis.
Accounts Payable Scenario 2:
You can also verify purchase order pricing against vendor invoices from the same centralized ERP dashboard.
• Upon invoice receipt, your team verifies purchase prices on the invoice against your purchase order.
• You then receive automated notification of price discrepancies based on a variance threshold allowing you to take proactive measures to resolve the discrepancies.
• An A/P voucher gets created allowing you to record the inventory expense in the accounting period in which it was received.
• You can also review open accruals for receipts that have not had a purchase order price verification completed.
Automated management of A/P invoice prices simplifies this previously manual process. It assists you in verifying the vendor's pricing saving you time and potentially, cash, further improving your cash flow.
You may be surprised to see how easy ERP can really be. To see how you can increase productivity and thereby reduce operating costs, sign up for our ERP simplified series.
Posted by Linda Nist-Gudeman on Wed, Jun 09, 2010 @ 03:38 PM
Simplifying ERP Systems for Wholesale Distribution and Manufacturing series continues with Accounts Receivable Management for cash flow improvement.
Crucial to your competitive advantage is the ability to know your financial standing at any given moment and all that effects it.
Key Performance Indicators Dashboard
Using a completely integrated ERP system you interact daily with key performance indicators (KPIs) via a centralized ERP dashboard. Knowing your financial standing helps you improve cash flow by intelligently interacting with your data so you can take proactive steps. Let's visit some common scenarios that just may sound all too familiar to you.
Accounts Receivable Scenario 1:
You review your global A/R from a centralized ERP dashboard by sorting your oldest receivables aging bucket, say 120 days old (You can define the aging anyway you like.). By sorting it in descending order, you can see which customers are holding up your cash.
• Now, your A/R manager can take proactive measures with customers and post a comment directly in the ERP dashboard about them. For example, "Spoke with customer's A/P manager who said they didn't have the invoices."
• Your A/R manager immediately found the invoices for the balance due by drilling down to the detail directly from the ERP dashboard. The invoices are immediately emailed to the customer who now indicates they will pay them with this week's check run.
• A follow-up "to-do" is posted to be reminded to watch for the payment.
This scenario is played out for any days-old range you want to start immediate action. The to-do list becomes the pro-active action list for follow-up and collection calls enabling you to stay on top of your A/R to improve cash flow.
Accounts Receivable Scenario 2:
You set automated alerts in the ERP system to hold new orders when a customer's receivables reach your pre-determined amount.
• Your A/R manager, or whomever you select, receives an automated notification that the customer has reached their credit limit and their orders are put on credit hold.
• Now, your A/R manager can take proactive action, by staying on top of all held orders on a daily basis to get payments collected and orders out the door again.
This simple, proactive, automated alert keeps your accounts receivable-thus, your cash flow-from racing out of control. You can stay on top of "at risk" customers before they become a bad debt without somebody manually monitoring the process. As a bonus, you also keep your customer's new orders coming in to help with a positive cash flow.
You may be surprised to see how easy ERP can really be. To see how you can increase productivity and thereby reduce operating costs, sign up for our ERP simplified series.
Posted by Linda Nist-Gudeman on Fri, May 21, 2010 @ 03:22 PM
Are you overwhelmed by the plethora of complex information regarding all facets of ERP systems for your enterprise?
In this series, we will break down ERP software piece by piece, to try to make it, well, simplified. ERP software simplified, is that possible? Let's explore...
It's complicated... but it doesn't have to be
Your business is not simple, it's complex. So, you set processes to simplify each operational function. Let's look at ERP systems similarly.
Too often, we in the ERP software world take many basics for granted when we talk about ERP systems. We assume everybody knows how ERP software handles these basics and how it benefits them. We hear much more about the advanced functionality in ERP Systems. That's great, really needed, but many people still need to know the good ol' basics, the ones that drive your business and streamline your processes. So, assumptions aside, let's get simplified...
Software+Complexity = Business+Simplicity
It's true, ERP software is complicated, but the result is a business that's simplified, automated, and, because of increased productivity, one that runs more efficiently and profitably.
The complexity built into ERP software allows you to tailor implementations to your business, making it easier to access, to use, and... less complex.
In this series, we'll explore how the components of a customized ERP work to simplify your business including:
• Improving cash flow using accounts receivable and credit management, accounts payable management, and inventory management
• Optimizing inventory for maximum profitability
• Increasing sales and marketing effectiveness
• Managing procurement processes more efficiently
• Better material requirements planning
• More useful and productive trading partner relationships and EDI
• Enhanced customer service
• Increased warehouse management efficiencies from automation
• Simpler business processes derived from the right/best ERP implementation for your business
To see how these components work, one by one, and how by combining them, you can increase productivity and thereby reduce operating costs, sign up for our ERP Simplified series. You may be surprised to see how easy ERP can really be.
Posted by Linda Nist-Gudeman on Wed, Dec 02, 2009 @ 04:19 PM
I don't know about you, but I like to squeeze every last bit of paste out of the toothpaste tube; I like to make sure all the ketchup in the bottle gets onto someone's burger or fries. I'm the one you hear in the kitchen clinking around in the jelly jar with my knife scooping up the last of the boysenberry jam.
In other words, I like to get my money's worth out of the personal inventory I pay for.
I bet you're the same when it comes to your corporate inventory. The more you get out of it, the less it costs you to carry it, the better your bottom line. A well-designed ERP, one that integrates everything from your suppliers to your distributors to your customers can do just that.
Consider these tips to reduce your inventory carrying costs with a fully integrated ERP:
Visibility is Vital
Use a real-time inventory dashboard to send you alerts, make suggestions about re-orders, under-minimum levels, turns, and fill-rates. You'll be more responsive to demand, improving cash flow and improving customer satisfaction levels.
Increased visibility into demand improves fill rates thus reducing backorders. The system can even suggest purchasing strategies you might not have thought of before.
Landed-cost tracking ensures you have the most accurate inventory valuation and margins.
Automate backorder processing in your ERP and you'll shorten the time needed to fill them and satisfy customer's anxieties.
Real-time inventory with end-to-end traceability helps you keep close tabs on finished goods and raw material usage; it ensures you're achieving your ROI targets and, with immediate visibility into your inventory, productivity is enhanced because time isn't lost waiting for materials that weren't ordered or received in time.
Optimize Purchasing
Advanced analytical tools provide improved demand planning and forecasting. Expedited purchasing and better visibility to demand also reduces overstocks, cutting carrying costs even further.
Optimize your buying power by having your ERP automatically search for vendor targets across product lines to gain special pricing and discounts.
Integrated Warehouse Management System for the Power Punch
An integrated WMS improves inventory accuracy and increase warehouse efficiency.
Implement WMS with RF shipping verification to actual orders and you'll reduce costs, minimize credit memos, and enhance your customer's experience building brand loyalty and repeat business.
Implement WMS with RF or voice-directed picking and you'll increase order to fulfillment speed, reduce overhead, increase turns, lower expedited freight costs, and increase customer satisfaction.
Learn more by downloading our How To Innovate How To Implement Guides:
Warehouse Management
Enterprise Resource Planning
Posted by Linda Nist-Gudeman on Mon, Nov 23, 2009 @ 01:49 PM
I admit it. Implementing a new ERP can be a bit like going to the dentist. You don't want to do it before it's done and you don't know why you waited so long to do it after it's over and the pain is gone.
While ERP implementation is never easy, experience tells me there are things you can do to smooth the transition.
Consider this baker's dozen list of suggestions when you get ready to implement, then contact us to guide you through the process:
Appoint End-user Leaders
End-user leaders have a real stake in the outcome of the project. Put them in place from the beginning and throughout the project life cycle to ensure consistent results.
Innovate Back to Front
Necessity is the mother of invention and innovation. Use your end-user leaders to help you define integrated business process improvement objectives.
Never Stop Innovating
You're bound to discover new things as your implementation progresses. Set aside resources to build in those newly-found innovations after your initial go-live.
Keep an Eye on Customizations
Upgrades are inevitable and they often conflict with customizations. Put a procedure in place to decide what customizations you will make and how they will impact future software upgrades.
It Ain't Over 'til It's Over
Have pre- and post-implementation plans in place, including how business process improvements will be addressed.
No Distractions
User training is critical to successful ERP adoption and execution, especially in the early days after you go live. Allocate time away from the desk for user training to get their full attention.
Practice Makes Perfect
Give users pre-implementation practice time to allow them to get comfortable with their processes and the integration.
QA is King
Test every function of the ERP to verify the setup, to determine if further testing is needed, or if modifications are required. Nothing frustrates users more than poor quality assurance testing.
Baby Steps
Break the ERP implementation down into manageable pieces-gaining early success and buy-in from your team is critical.
Make It Your Mantra
ERP implementation is a journey. It's easy for people to lose sight of seemingly intangible goals along the way. Continually communicate the objectives to keep users focused.
KPIs, meet ROI
Extracting key performance indicators (KPIs) from your ERP data early on allows you to accurately assess return on investment (ROI) later.
Time is Money
Surely one of the most important objectives of your ERP implementation is making users more productive. Be sure you understand how user's gained time will be directed towards more productive projects.
The Buddy System
Fear of the unknown is one of the most basic human conditions and a serious impediment to successful ERP implementation. Assign personnel to work with users and troubleshoot and manage the go-live.
You may be surprised to see how easy ERP can really be. To see how you can increase productivity and thereby reduce operating costs, sign up for our ERP simplified series
Posted by Linda Nist-Gudeman on Tue, Oct 27, 2009 @ 09:25 AM
Dynamic ERP, Dynamic ROI
If your supply chain business were a static entity, the ERP you implemented in previous years would still work perfectly fine, meeting your needs as well as the day you went live with it. Your WMS would still suit your situation nicely, your EDI and ERP would continue giving you all the business integration and business intelligence a savvy business exec could want.
But your business isn't static, it's dynamic.
The economy rises and falls causing restructuring then repositioning; you add new products and delete others; you add clients who, in turn, add new requirements about how to deliver not just the goods but the data associated with them; new suppliers, new compliance standards, and an ever-changing marketplace all conspire. Soon, your ERP and the affiliated component applications, fall out of sync with the business they support.
A clear view of a fuzzy object
Recognizing the symptoms of an out-of-sync ERP is easy:
• Costs are rising and containment efforts aren't keeping up
• Your IT ROI is flat or shrinking
• Your customers are hinting (or demanding) you be more responsive to their needs
• Fragmented data pools are costing you time and money
• There are growth opportunities on the horizon but you can't see beyond the next bend in the road with the ERP you have now
The hard part is making the right decisions to realign your ERP with the business you're running today and the one you anticipate running next month and six or 60 months down the road.
Avoid common mistakes
The most common mistakes we see companies making while grappling with large-scale ERP issues are:
Mistake #1 Implementing manual solutions
Result Data becomes even more fragmented and less integrated, resulting in less effective decision making.
Mistake #2 Customizing
Result Customizing is not only costly, but it digs you even deeper into an IT hole, reducing the number of options available to you in the future.
Mistake #3 Doing nothing
Result You end up throwing other resources and money at the problem, all while falling further out-of-sync with your business.
The opportunity for reducing costs from rethinking your ERP system warrants further return on investment investigation now rather than putting your ERP project on hold.
Consider the possibilities of better inventory accuracy, expanded sales channels, dashboards displaying real-time data, integration for ease of use, being more responsive to demand, being able to direct your employee's time to more productive projects. The list goes on; see our Innovation Guide to learn more.
Ask the right questions, get the right answers
Sometimes, you need to upgrade. Sometimes you need to implement a new system. Sometimes, just a few simple tools will keep your operation running smoothly for years.
Developed from our 30-plus years of experience, our Business Computing Assessment asks pointed questions designed to help you maximize the business integration and business intelligence you realize from your ERP and WMS, integrating your data and your business, and achieving the best possible ROI for every dollar invested in your IT infrastructure today and in the future. Couple the assessment with an ROI calculation using your numbers to help you make the right decision now to realize the cost reduction possibilities from an optimized ERP system.
HowToInnovate HowToImplement Free Kits includes innovation guides, business computing assessment, attend a virtual seminar and get an ROI calculation bonus!
Posted by Linda Nist-Gudeman on Mon, Oct 19, 2009 @ 09:20 PM
From EDI to EBI, using the same tool, using the same skill set
Maybe you took a foreign language in school, maybe you didn't. If you did, you soon realized that the more languages you spoke, the more people you could communicate with directly.
Data is no different. If you're a manufacturer, for example, the more trading partners' languages your data is fluent in, the larger the pool of outlets that can carry your products.
Innovate to integrate
We recently worked with an Indiana-based manufacturer who counts some of the nation's largest retailers, including Bed Bath & Beyond, CVS, Rite-Aid, Walgreens, and Wal-Mart, among their clients. As the holiday season approaches, they ramp up production and personnel, quadrupling their manufacturing work force to 200 people. But not one in the back office handling data entry for purchase orders, invoices, advanced shipping notices, and other administrative tasks thanks to electronic data integration. With the majority of their orders handled via EDI, labor costs are greatly decreased.
The company uses VAI's S2K as their ERP and EXTOL EDI Integrator to facilitate their electronic data interchange (EDI).
As their trading partners migrate from costly virtual area networks (VANs) onto secure, internet platforms such as AS2, they added EXTOL Secure (ESX) to handle the AS2 compliance requirement. Still, a new trading partner is only viable if you can manage data the way they want it managed.
But you don't have to teach your bits and bytes how to speak everyone's language; you just have to make it appear as though it does. And, the more integrated your data is, the more integrated your entire business is.
With their data integrated, the company is one step closer to complete electronic business integration (EBI). Purchase orders are electronically received and orders automatically created, eliminating error-prone double-entry. Functional acknowledgments, invoices and advanced shipping notices are automatically sent through the EDI system
Just as you rely on EDI software for trading partner data integration you can use any-to-any mapping tools for all your integration needs. Integration needs emerge via internal or external customer demand, requiring rapid response. Integration challenges also exist from different platforms, communication interfaces, and data formats.
Change the rule, not the program
Programming integration, along with being labor intensive and costly, is a one-off solution creating constraints on how it was written. Implement a tool instead and programmers remain engaged on more important work such as enhancing your customers' experience or finding ways to draw traffic to your Web site. Labor costs are reduced and data quality is enhanced.
Data integration-business integration-is well-suited for a tool where you can apply business rules. Then, let the tool monitor and act on those rules. When changes are necessary, change the rule, not the program. Even super non-programming users can now maintain processes.
When one tool set-one skill set-can be used for multiple integration processes, that's real ROI: to your ERP, your WMS, to every nook and cranny of your EDI and enterprise application integration (EAI) efforts.
Access "HowTo Innovate HowTo Implement" Electronic Business Integration Kit
Posted by Linda Nist-Gudeman on Wed, Oct 14, 2009 @ 09:59 AM
Using EDI to teach your old ERP new tricks; increase ROI
I first saw it in my client's eyes. That look that says, ‘This-feels-like-it's-going-to-be-really-expensive-and-I-don't-want-to-do-it-but-I-have-to-do-it-and-it-will-be-worse-if-I-don't-do-it-so-what-should-I-do?' look.
It was accompanied by the words ‘upgrade,' and ‘customization, warehouse management system (WMS), and ERP,' and, as I'm hearing more and more, ‘RFID.'
The client, an Indiana-based logistics warehousing company with about 50 employees, was watching their business grow nicely. Executive management knew it was time for an ERP and a WMS and settled on VAI's S2K suite.
Their warehouse operations manager used the opportunity to point out the efficiencies they could gain by simultaneously incorporating handheld RF devices: Now, the valuable data and tools enabled by their ERP and WMS would permeate the organization by putting real-time information into everyone's hands, whether they're in the back office or working the front lines.
In the initial ERP implementation we designed a custom WMS together, necessitating some base software customization to meet the organization's unique requirements.
But, five years later, when they were ready to upgrade to VAI's latest version (one that included an integrated WMS module), the drive was on to minimize the number of customizations required. So, we got creative.
We took their existing EDI data, built some simple, front-end and back-end tools, and using a holistic approach to enterprise computing-the same integrated approach they were using to run the rest of their business-put the pain of multiple, expensive, upgrade-induced ERP customizations behind them.
Rather than extensive modifications to track serial numbers to the bin level, we leveraged functionality referred to differently in the base package than the user nomenclature. The client can even track serialized inventory planned for specific customer orders prior to the item being received into inventory by creating a standalone cross-reference file populated by electronic data.
When WMS spells real ROI
The results speak for themselves: By writing some new standalone programs that amounted to only three percent of the original base objects, their integrated ERP WMS went from 87 percent base unmodified to 99.5 percent unmodified base; going forward, retrofits should be just 10 percent of the modification requirements.
Sometimes customization is unavoidable, that's true. But when have you ever been better off customizing already-complex software versus taking what you already have-some great EDI data, for example-and teaching it a few new tricks?