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?