by Tim Sands

ERP and “Coming of Age”

Where are you in the evolution of your company?

In my day to day work of Business Development I wade through multitudes of “suspects” on my way to finding and identifying prospects we can help.  One thing I find as I have discussions with prospects and research their situation is how software selection must have evolved over the years, how they arrived at their initial selection and what is happening now.

The start up.  More times than not, we discuss that at the time, in the beginning their company needed not much more than an accounting system and something to manage formulas, quality control, inventory would suffice and many times that ends up being excel spreadsheets.  They would plod along manually and things would go ok.

The small company. Years later due to increased volume, new regulations and enhanced risk they embarked on a software selection.  At this point often then they may get advice from outside consultants (many from the accounting world) or perhaps someone in financials in their own company – so the selection was driven from the financial side still and perhaps not manufacturing or if it was driven somewhat by manufacturing, they would search out a familiar name ERP (Enterprise Resource Planning).

The midsize. Present day they find themselves seeing their competitors catching or passing them by, often they are looking for an edge to help them improve production and manufacturing, get clearer reporting and the right system to bring them to all the next level.

The industry vertical.  At this point the customer does research and often finds that there are ERP solutions that “specialize” in one industry or another.  What does that mean?  Often, it will mean that an ERP vendor has experience and “reference able” companies in the same vertical.  The ERP vendor will also have Implementation Specialists who have experience in that vertical.  Finally the ERP vendor has proven the ability to meet the regulation requirements of that vertical, and has active user groups in that vertical.

The future.  As you go through your day to day work and are looking for an ERP partner, my advice would be to find out where you are in the evolution of your company and are you ready to choose the right ERP system for you?  If you are ready, choose an ERP solution that is in your vertical.  Check for things like: Does the ERP vendor specialize in my industry?  Has the ERP vendor proven they can meet my regulations? Can they provide me with documentation of that?  Do their implementation specialists have experience in my industry?  Can they guide me through this process?  Having awareness of all of these things should hopefully help you as you select your new ERP partner.

Resources: How to Choose an ERP for Process Manufacturers - White Paper Library

By Tim Sands

“Matchmaker, matchmaker, make me a match; find me a find, catch me a catch.”  Ok.  Maybe not everyone knows all the songs to Fiddler on the Roof like I do, but you get the gist.   Today’s topic: dating.  Not really dating in the traditional sense of the word, but dating like matching the best ERP system for your business.  In ERP selection, like in life, the cheapest date isn’t necessarily the one you want to marry.  Time to do some due diligence.  There are many types of ERP systems out there in all different sizes, shapes, colors, and styles.  Since the goal of your company is to partner with someone who fits your business  for the long haul, it’s prudent to do the homework, the vetting, if you will.  It’s better to do it right than having to repeat the whole process again in a year or two.

In my profession, I run across prospects that are looking at several different ERP solutions - as they should.  Sometimes they include systems in their search that are focused on discrete manufacturing.  Discrete, roughly defined, means things are being measured in “eaches” like nuts and bolts, shelf brackets, or roof trusses.  Systems that are designed for those types of manufacturers are much different than that of ERP systems made for process manufacturers. Discrete systems manage a simpler process and consequently are much cheaper.  Sure, discrete systems might handle the basics of standard based manufacturing, but they can’t really do what a process manufacturer needs nor solve the problems they are looking to solve.

That’s when it is important to step back and look at the real business issues and outcomes a company is looking for.  The advice I give my prospects when they are starting a project is to do their homework.  I tell them, “Whatever you do is ok with me. All I know is you will want a system intended for your industry and a solid vision that gives them a clear upgrade path, that will cause less headaches, and result in less money you’ll need to  put out on your end later.”  Isn’t that true?

That said, start with answering the basic question: What do we make?  What type of “stuff” do you make?  For example, in the inventory or manufacturing process, is there a need to convert various units of measure?  Perhaps it’s a good idea to see that the software contains tools for specific gravity conversions.  Next, there might be a need for automatic unit of measure conversion.  An ingredient may be measured in grams when making a small batch, but measured in kilos when making a large batch as an example.  The list goes on.  There are many other components to this decision and I have provided two different white papers on this topic:  Process vs. Discrete ERP software – What is the Difference?,  and Process vs. Discrete ERP software – The bottom Line.

When making a big investment like an ERP purchase, it’s imperative that you do all you can to do it right the first time.  Invest sufficient time and effort into the decision making process – including things like weeding out the cheapest date.  When you are in process manufacturing, make sure to look under the hood, shop around, get references, and find out what you are getting yourself into. Selecting a new ERP solution will likely be the largest IT decision your company will ever make as it will become the information backbone of your company. The right system will provide you and your managers with critical information about how to better manage your business and drive more dollars to your bottom line for years to come.

Attend the January Webinar: Not all Manufacturing ERPs are alike – 8 Questions to ask when searching for an ERP.

Jan 18th @ 2:00 pm CST & Jan19th @10:00 am CST  Register online.

By: Tim Sands

Selecting a new ERP solution will likely be the most important IT decision your company will ever make as it will become the information backbone of your company. The right system will provide you and your managers with critical information about how to better manage your business and drive more dollars to your bottom line. 

Before purchasing, however, you may want to know in advance what an ERP system will really mean for your bottom line.  An ROI calculator is one tool that can help determine the potential return on investment.  The numbers should help you see the value and savings you could be bringing to your organization such as cost reductions through better management of raw materials, tracking, and testing.  Implementing ERP should also help to better manage inventory:  where it is located, when it came in, expiration dates, co-mingling, placement, and storage/warehousing.  Order processing, accuracy, and on time real time production is also a benefit of ERP.  ERP allows order entry as fast as the order is made.  Lower costs, faster production times, increased ability to serve your customers right every time and respond to your competition, market trends, and industry forecasts are all pieces of a complete ERP with will  boost your ROI.

ProcessPro has an ROI Calculator. I offer it to companies seeking to measure this sometimes intangible value. It is easy to use tool, and can help you begin to quantify your return and see the possibilities and potential annual savings you could achieve with an ERP.

I’m also looking for other ROI tools for ERP that you have found helpful, comment to this blog with your experiences.

By: Tim Sands

There is so much change coming down the pike in the food manufacturing industry.  President Obama made history on Tuesday when he signed the FDA Food Safety Modernization Act.  What does that mean for you? Well, in general terms most likely it means more regulation, more checks and balances, and more oversight.  The law will require food manufacturers to perform tasks such as identifying areas of risk so that preventive measures can be instituted.  This means revisiting things like SOPs and securing mock recall plans. Being prepared for an actual recall will ultimately minimizing risks before a recall is necessary.  Food companies will need to have more accurate tracking abilities than ever before, and maintain solid cradle-to-grave records and systems to minimize or prevent potential food borne illness outbreaks. 

Instituting an ERP system, and getting help and guidance in establishing a recall protocol is one way to help solve these problems.  For more information on how an ERP can help get you prepared, attend our webinar on Jan 18^th or contact us directly at info@processproerp.com

We are also interested in hearing your response to these new provisions, post a comment below.

By: Tim Sands

Is your company growing and your accounting and tracking system having a hard time keeping up production, reporting, and audit requirements?

Do you lack sufficient and accurate information on your company’s performance?

Are you using QuickBooks or Peachtree and you would like a fully integrated system that handles manufacturing, quality control, and accounting?

If you answered "Yes" to these questions, it might be time to look at implementing an ERP software.

Companies can experience many benefits from implementing ERP software including increased productivity, reduced operating expenses, improved information access, and more. The most important variable however is to be sure to select an ERP that is the best fit for your operation. This task cannot be taken lightly.  If you have recently done a an internet search for manufacturing ERP software solutions you were most likely shocked to find more than 765,000 links to various ERP developers, vendors, and more.  Instead of feeling overwhelmed by the number of ERP selections, careful planning and prioritizing can be made simple by following some basic guidelines.

ProcessPro recently released a white paper outlining these guidelines. Are you planning an ERP project in 2011? Tell us about it, post a comment below.