As the labor market tightens with changing demographics, companies will need to leverage technology and digitize their supply chains.

The world has never experienced a labor shortage quite like the one we are experiencing. According to the Bureau of Labor Statistics, employment growth will average .3 over the next decade; however, labor participation will drop from 62.2% to 60.4%. In essence, we have entered a secular labor shortage. Similarly, according to the German Chamber of Commerce and Industry, half of German companies are struggling to fill vacancies due to labor shortages. Thus, the only companies that will thrive in the next decade will leverage technology and digitize the supply chain.

The use of technology and automation will be of paramount importance to not just supplement the labor force, but also to meet ever increasing customer requirements and provide visibility across the end-to-end supply chain. Companies must be faster, focused, and perform with lights-out manufacturing and logistics to succeed. Thus, a modern ERP system will be an assumption, not a differentiator. In addition, companies must pursue advanced technologies such as business intelligence and predictive analytics to forecast the future and determine where to focus, artificial intelligence, and IoT solutions to support items such as predictive maintenance, and digital twins to optimize process and product performance.

Pertinent Examples

An electrical power solutions manufacturer struggled with an ERP system upgrade, and it impacted every aspect of the business, requiring additional resources to support customer requirements. A base ERP system is no longer acceptable. Instead, a modern ERP system that supports customer expectations such as configure-to-order (CTO), customer relationship management (CRM), and customer-related functionality — including customer portals, order fulfillment visibility and backlog management — is essential.

Since the ERP team didn’t have the time required to fully prepare, the executives quickly supplemented with additional consulting and temporary resources, developed interim solutions for tracking backlog, and ordered ahead to support the transition. Even with one of the best management teams in the industry, until modern ERP functionality was available, they had to implement several stop-gap measures to avoid significant customer impact.

An industrial manufacturer struggled to forecast revenue accurately one month ahead, causing frustration with their board of directors. An assessment of their business processes and use of technology showed that their sales and order entry systems did not talk with their production and inventory control systems. Although Sales could estimate revenue, Operations had no idea which products would be required to support that revenue until Engineering completed design. Thus, although performing above expectations, the two rarely met.

To turn this situation around, we had to build a bridge between the two systems with a data model. However, that alone wouldn’t resolve the issue, as the product details were not known soon enough to ensure seamless delivery and revenue predictability. Thus, in addition, the team created a digital-twin-type capability to predict the product grouping and model information with a SIOP (sales inventory operations planning) process so that materials could be purchased and capacity planned. Once this information was built into automated dashboards, Production was able to transition from reactive to proactive, thereby creating predictability in shipping plans and taking it a step further with proactive margin enhancement strategies.

An aerospace manufacturer continually struggled with on-time delivery, and customers were losing patience. The issue was a bottlenecked area of the manufacturing process that simply could not keep up. They could not find enough high-skilled resources to run the machinery on second and third shifts, and overtime was maxed out. The team pursued an alternate strategy to employ a technological solution to run lights out around the clock.

They purchased a robot and focused their most advanced resources on modifying the robot to work in their manufacturing environment. With the upgraded robot, their high-skilled resources refocused attention on setting up the machinery during day shift, which allowed the robot to perform the repetitive tasks on second and third shift. Order delivery performance improved rapidly, and customer complaints disappeared as the bottleneck was removed. Later, they focused on upgrading their distribution processes with lights-out capabilities as well to further differentiate performance.

Forward-thinking companies will pursue smart technology upgrades while their competition focuses on containing cost. The companies that figure out how to do more with less and digitize their supply chain will thrive while the rest struggle. Resources will no longer be plentiful, and so pivoting with technology will be the only route to executing successfully while meeting ever increasing customer expectations.

Originally published in Adhesives & Sealants Industry.

The post Automate, Digitize, and Thrive in the Supply Chain appeared first on LMA-Consulting Group, a supply chain consulting firm.

Lisa Anderson was quoted in a SelectHub article about your ERP requirements checklist, and why a thorough ERP Requirements Template is vital. 

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Not spending enough time on your ERP template can cause more problems than solutions. Replacing ERP software is more challenging than swapping printer ink cartridges.

Consider everything a system offers to craft a proper ERP system requirements checklist. We’ve created an extensive list of the most popular features, purchasing considerations and tips on selecting the right software for your organization.

Key Requirements & Features

This list is a good starting point when deciding how to build your ERP template, ranging from manufacturing and accounting to warehouse management and more.

1. Analytics and Reporting
2. Asset Management
3. Customer Relationship Management (CRM)
4. Finance and Accounting
5. HR Management
6. Inventory Management
7. Manufacturing
8. Order Management
9. Procurement
10. Project Management
11. Service Management
12. Supply Chain Management (SCM)
13. Warehouse Management

Crafting an ERP Requirements Template

Like searching for a new destination with a map or GPS, you can’t find suitable modules without an effective ERP template. You can’t skimp this process.

Lisa Anderson, president and founder of LMA Consulting Group Inc., sat with us to explain the importance of a thorough template.

She said, “It is vital to create a template to ensure you have captured a comprehensive set of business requirements and have incorporated input from all business process owners. A business requirements template keeps software providers on track and answering questions that are relevant to the client’s needs,” Anderson continued. “[The template] will provide a methodology for ranking functionality and ERP suppliers.”

To read the full report, click here.

Originally published on Select Hub, October 5, 2023

The post ERP Requirements Template: Vital for Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

In the last month, there has been a flurry of ERP related discussions. A client went live on an aggressive timeline with an ERP system with little to no data migration as there simply wasn’t time. As you can imagine, there is quite the mountain of follow-up tasks. In talking with a CEO group, there was a lot of ERP activity. One company went live a year ago and is still recovering in terms of smoothing out since go-live although it was successful. Two others are looking at ERP selection projects and another is looking at better utilizing their ERP system. The bottom line is that folks are realizing they must automate, digitize and better utilize ERP functionality and related technologies (AI, IoT, CRM, e-commerce etc.) to support customers and grow profitably.

Why is ERP Strategy Vital?

ERP is one of the most expensive non-equipment purchases a manufacturer or distributor will make, and it is certainly has the most potential to impact customers. The statistics tell the story. 80% of ERP implementations fail to produce the intended result. The key is whether you are negatively impacting customers or if you spent additional fund, needed additional resources, or didn’t gain the efficiencies upfront.

And, so you might wonder why you should upgrade ERP at all? In the current environment, customer expectations have changed dramatically, profitability is critical, and high-skilled talent is not plentiful; thus, upgrading to a modern ERP system and/or expanding the use of ERP in a way that supports your business differentiators is one of the most important decisions your executive team will make.

A modern ERP system is required to support many customer requirements and some of the automation capabilities. Thus, if you don’t have a modern ERP system and plan to grow, you should evaluate it. On the other hand, not everyone should upgrade their ERP system. Clearly, if it isn’t required to support your growth, you will be diverted from the business at a minimum, and lose business at a maximum. If you already have a modern ERP system (one invested in heavily by the provider and one that has a strong base), it is likely you do not need an upgrade.

You could decide to better leverage your ERP system instead. In the last 20 years, we can count on one hand (and perhaps with just a thumb) the number of clients that couldn’t benefit from further leveraging their existing ERP system. The one exception that pops to mind was solely due to risk as removing a card from their house of cards could bring the house down.

ERP Roadmap

At a bare minimum, every company should develop an ERP roadmap to ensure technology supports business growth and success.

Start with strategy. Evaluate several questions:

• What are your growth plans? Do you expect to buy companies? Expand through organic growth? Partner? Internationally?
• Do you expect to expand, add or change markets, industry segments or customers? What is required to support these plans? Are you familiar with your customers’ plans?
• Do you expect to expand, upgrade, or add products? If so, will that change your business requirements?
• Do you expect to change your supply strategy and related analysis? (insource, outsource, offload, make vs buy, manufacturing type (job shop, process, ETO, CTO), product rationalization, customer/ product profitability, etc.)
• What is unique to your business or industry?
• What is unique from a profit driver standpoint?

Once you have thought through your strategy questions, it is time for an ERP assessment. During an ERP assessment, you should evaluate the following:

• Your business requirements
• Your critical success factors (profit drivers, differentiators)
• The requirements fit with your current ERP system.
• If needed, an ERP system evaluation to select the best ERP system and related technologies to support your business.
• If needed, an ERP partner to support your ERP implementation.

In ERP circles, there are many “good salespeople” selling bells and whistles, and there is a lot of complexity in the cross-section of business processes, ERP functionality, and technical specs. It makes sense to hire an outside, unbiased resource to assess your business requirements, critical success factors, fit with your current ERP system and evaluate ERP software and partner upgrade options.

To learn more about the topic, read our article on better utilizing your current ERP system and selecting and upgrading your ERP system.

As the manufacturing resurgence accelerates, the need for a modern ERP system and use of related technologies will be vital to support customers and profitability. Please contact us with your success stories and your questions for how to succeed during these volatile times. And, please keep us in the loop of your situation and how we can help your organization get in a position to thrive for years to come. Learn more about these topics in our blog and download your complimentary copy of our recently released special report: The Road Ahead: Business, Supply Chain & The World Order

The post A Flurry of ERP Discussions appeared first on LMA-Consulting Group, a supply chain consulting firm.

Why Modernize Your ERP System?

There might not be a need. Since it is one of the largest expenses your company will undertake, and, more importantly, it will impact customer performance and profitability (positively or negatively), there is no reason to jump into the deep end of the pool before understanding the value to your growth and success. Upgrading your ERP system is not for the faint of heart as it will consume resources (financial and people), and 80% of ERP upgrades fail to achieve the intended results. Thus, you must ensure you will be part of the 20%!

With that said, if you do not have a modern ERP system, you will constantly struggle to meet customer expectations, grow profitability, and achieve cash flow goals. Our clients with old systems try to incorporate add-on software, but it becomes a house of cards. Orders slip through the cracks. Duplicate transactions confuse and annoy employees. Archaic screens discourage teams. Key business nuances cannot be incorporated into the system. And down-the-line impacts are lost.

Additionally, archaic systems typically cannot support modern customer expectations (e-commerce, CRM, business intelligence, AI, etc.), and so clients create work arounds to try to meet the needs. Soon, there are elaborate subsystems required to support the business, and the solutions are not scalable.

Although in every client situation we found opportunities to better utilize the system, the effort required to limp along with an old ERP system and avoid the upgrade will not be worth the value over the medium to long-term. Instead, focus attention on when to upgrade and plan your upgrade to ensure success.

Why ERP Upgrades Fail

Most ERP upgrade projects fail. The most frequent reason cited is lack of training; however, we find that is RARELY the cause. The root cause is that the people do not know how to use the system to perform the business processes required to achieve the day-to-day business objectives For example, the ERP team might have provided training on how the system plans production; however, the planner does not know how to use the system to get production schedules for what he/she knows is required to meet the #1 customer’s needs and/or how to get the schedule to show the correct number of pieces per day (instead of showing an unrealistic output that would require double the resources he/she knows is available).

Unfortunately, the ERP team typically says, “Use the best practice process. You are being resistant to change.” And the planner says, “The ERP system is not working, but provides no details as to what is wrong.”. Neither side is happy with the other, and the planner puts together a work around, and the ERP team requests a change consultant. It is no wonder 80% of implementations fail.

What can you do to turn failure on its head?

The good news is that it is not difficult to know what to do to succeed with ERP upgrades. The bad news is that companies don’t want to accept what needs to be done to succeed. The critical priorities are as follows:

• ERP Software Selection: Focus upfront to make sure you select the best-fit system for your business requirements. For example, if your business requirements dictate a job shop software, your options will be limited. If you need a configurator or service module, your options will be further limited for the best software to support your needs. Focus on business requirements, and especially those requirements that differentiate the company in the marketplace or those that are unique to your industry. Our clients have found that the best way to be software agnostic and not get sucked into a slick sales presentation is to bring on neutral experts to focus on requirements, fit, and facts, and they arm the team with pitfalls to avoid.
• ERP Selection example: For example, a manufacturing client was hesitant to spend the money on consultants to perform an ERP selection. Their CPA convinced them to give it a go. After working with them for several months, we agreed on the best fit software and partner; however, the client decided to postpone the ERP upgrade for a few years. The CPA provided feedback that even though they didn’t follow the recommendations, the client felt like the process itself was well worth the investment because they understood what was needed to be successful and could prepare to ensure success. Fast-forward a few years, and they did just that. We went through a new selection process as requirements change, ERP software capabilities change, ERP positioning changes, and suppliers areas of focus and expertise change. We selected a new best fit software and partner, and they were prepared for the ERP journey.
• ERP Supplier selection: Just as important as the system is the selection of your implementation partner. Plans rarely fail in formulation. They fail in execution. This means that the partner you choose has to fill in gaps of your weaknesses, supplement your strengths, and align with your path forward (agile vs process-oriented, focused on quick wins or looking at the long term, knows how to work with small and medium size company resources or is focused on larger company issues, focused on saving money or return on investment). In the ERP software selection example, the supplier of choice from the first selection process evolved with changing market conditions and no longer focused on medium size clients in their sweet spot. Thus, a different partner made more sense.
• ERP Team: As difficult as it is, you need to put your best and brightest on your ERP team. This team will be designing processes, working through roadblocks, driving change, providing training, listening to feedback, and will drive your success or failure. You will have to invest in people, ensure career paths for top talent, and provide tools, support and supplemental resources to ensure success.
• Project Management: The fundamentals or project management and change management are bedrock to ERP success. These are not rocket science yet essential to success.
• Business/ Systems Analysis: Beyond being proficient in project management, you will need business process and system analysis capabilities. You need to visualize down-the-line impacts, pivot as appropriate, know when to keep looking for ways to resolve issues and when to stop at success (and not pursue perfection). Incorporating cross-functional business process expertise is critical as the connections between processes and modules will make or break success. Unfortunately, ERP partners typically have experts in each module. This leaves a gap in cross-module processes. Supplement with these experts if you want to succeed.
• Pilot: Design a pilot to test the end-to-end life cycle of your processes. The most successful clients utilize an agile approach to pilot a segment of the business or a sub-process, incorporate changes and expand your pilot. This iterative approach will rapidly incorporate business feedback instead of waiting until the end to see if everything works as desired. By then, no one wants to be the one to postpone the go-live, and so critical updates will not be uncovered.
• Testing & Cutover: Each ERP supplier will have proven implementation processes. Unfortunately, methodologies are only as good as the people executing them. Don’t skimp where it counts. Resolve key issues before they impact customers and daily profitability. You’ll need strong organization and orchestration to coordinate successfully.
• Ongoing Support: Planning a week of go-live support will not cut it. If the supplier has one foot out the door because they have committed to another project so that they can fund operations, they will not be focused on what your team needs to succeed.

A Final Thought

Do not leave your ERP upgrade to your IT team, your CFO, or an ERP leader. It is a transformative process to build scalability and sustainability into your business processes. You will need a visionary. You will need leaders to drive change. Not change for the sake of change or to implement best practices. Instead, you will need to drive change and improvement to your business processes. It might make sense to bring on a business consultant to bridge the gap between process, ERP, and technical specs. Last but not least, execution, collaboration and partnership will be key to success.

If you are interested in discussing whether you need an ERP upgrade or you are interested in discussing an unbiased ERP selection, review our ERP resources and/or contact us to discuss your situation.

Did you like this article?  Continue reading on this topic:
Managing Increased Complexity with High OTIF & Efficiencies Using Technology

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Should You Upgrade Your Systems?

It depends. Being the first to upgrade for each new fad is a waste of resources for little, if any, benefit. On the other hand, if the upgrade supports your ability to serve customers and grow profitably, it will become a “must”.

Inaction Isn’t an Option: The Southwest Airlines Debacle

Let’s take the Southwest Airlines debacle as an example. Although there were some extenuating circumstances (weather events and an infrastructure that supports point-to-point flights), the crux of the problem was that their systems failed. Weather caused delays and cancellations. Next, because Southwest doesn’t use the hub and spoke system, they do not have resources gathered in hubs throughout the country. Thus, when a flight was cancelled, they didn’t have their equipment (planes) and resources (pilots, crews, etc.) in the “right” place at the “right” time to quickly pivot.

They could have moved resources to the correct places; however, their systems were not upgraded to handle these ever-changing conditions and so flights came to a screeching halt. Southwest had insurmountable challenges resulting in cancellations to OVER 90% of their flights and countless unhappy passengers. Clearly, in hindsight, a systems upgrade would have been worth it!

How to Know If You Should Upgrade Your ERP System

How do you know if you should upgrade your ERP system? Of course, there is not a magical answer; however, there are several questions to consider:

• Does your ERP system support your customer needs? Customer needs are constantly evolving. Do you have high levels of service? OTIF (on-time-in-full) or OTD (on-time-delivery). Can you quickly pivot to changing customer conditions? Are you aware of these changes? Can you provide the visibility customers need?
• Will your ERP system support your FUTURE customer needs? Too many clients are running on the hamster wheel to keep up with current conditions and don’t have time to look to the future. Focus on where your customers are going and whether your systems will support their future needs.
• Does your ERP system support process upgrades? For example, if you would like to have inventory in the “right” place at the “right” time to achieve high service levels yet you could reduce your inventory levels to free up cash flow, does your system support this type of upgrade?
• Will your system support automation and digitization? For example, could you collect information about your machines with IoT capabilities and feed back to your systems so that you can use AI (artificial intelligence) to predict your machinery needs instead of focusing on preventative maintenance? Or could you simply attach a robot or automate a mundane process?
• Will your system connect with customers & suppliers? Viewing just one link of a supply chain is useless. You are only as strong as your weakest link. For example, to provide visibility of order status, you should connect with your suppliers, your suppliers’ suppliers and so on.
• Does your ERP system support your data needs? The only route to success is to be able to collect and analyze data so that you can stay ahead of changing conditions to make directionally correct strategic decisions. Business intelligence, predictive analytics, what if scenarios and more.
• Is your ERP system a hodge-podge of functionality or will it work like a well-oiled machine? It is fine to have add-on software so long as it works seamless together and as issues occur, the parts work together to resolve rapidly without finger pointing and wasted time. If not, you need to upgrade your system.
• Will your system keep up with modern functionality needs? For example, if your system doesn’t have a strong CRM (customer relationship management) system, it is doubtful you will keep up with customer needs. Does it have a forecasting system, an e-commerce system, an MES (manufacturing execution) system, and a WMS system (warehousing management) that acts as part of your ERP system? These are often separate systems or modules but they must seamlessly integrate.

If Your Answer is Yes, Perform a Selection Process

Clients frequently call to ask for help in selecting an ERP system. Unfortunately, it is not for the faint of heart. If there is one thing that is a certainty, it is that ERP salespeople are sharks. Some are likeable, friendly sharks, but sharks nonetheless. They easily sell ice to an eskimo.

Review our ERP category on our blog for several articles on ERP selection, but a few of the key steps include:

• Assess business requirements: Determine what your system needs to do in detail to support your needs.
• Document business requirements: Although we’ve tried to find a way to minimize the workload associated with this step, it is vital to keeping the sharks at bay.
• Source potential ERP suppliers: Narrow the list to ones that support your type of business and customer needs effectively.
• Develop an RFP & Scoring Method: Even for small selection projects, it is good to document at least the key points to further narrow your list of potential ERP suppliers.
• Demo the software: It is important to visualize how you can use the software.
• Ask second-level questions &/or perform deep dive demos: The devil is in the details. The software can look amazing yet not support your business. It happens frequently. The key is in asking the underlying questions and seeing how the software handles your specific needs. Will it handle the 80/20 or only 70/30? It will make a huge difference to your success – and resources invested to achieve success.
• Pricing comparisons: There is no doubt that software suppliers must sit at a bar and find ways to make pricing apples to oranges so they are impossible to compare because after 100+ projects, there are still curve balls to work through every time. You must get it to “apples to apples” to understand if your likely investment and comparison.
• Partner comparisons: The 80/20 of success will be implementation (assuming you get a decent fit for functionality). This will boil down to your partner and the capabilities of the specific resources you will work with on the project. Even with the best of partners, you can go down the “wrong” path easily and waste countless hours before pivoting. In fact, it is only the better partners that will tell you when they discover it is the wrong path because they don’t want to tell you that time has been wasted. The better your partner, the better your success.
• Summary comparison of functionality, partner and implementation which results in a final selection.

If Your Answer is No, Don’t Do It!

It is often easier to blame process issues on the system. Or, it could be for a lack of knowledge of how to expand the use of your system. Refer to our recent article, The MacGyver Approach: Leveraging Your Under Utilized Asset to find ways to upgrade your results without upgrading your system. Or ask experts to evaluate your situation. Don’t pursue an upgrade if it isn’t needed! Upgrading your system unnecessarily could be the quickest route to insolvency or customer debacles.

If you are interested in discussing whether you need an ERP upgrade, review our ERP resources and/or contact us to discuss further.

Did you like this article?  Continue reading on this topic:
Managing Increased Complexity with High OTIF & Efficiencies Using Technology

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Do you wish you could find all the top ERP influencers to follow all in one place?  

Enterprise Resource Planning (ERP) can be a complicated process and an immense task to plan and implement, with each system having various functionalities and each vendor providing different benefits for your business. That’s why you ought to be following the top ERP influencers for all the latest insights into the ecosystem.  

But who are the experts within the field; the big brains behind the processes who understand the ins and outs of the technology?  

Look no further as we’ve created this handy guide of all the experts in the field that you should be following, alongside links to their LinkedIn and Twitter accounts, for all the latest news within the ERP ecosystem.  

This list, compiled by ERP Recruitment Experts, Washington Frank, is in alphabetical order and provides links to the top influencers you should follow.

On the list you’ll find:

Lisa Anderson, President of LMA Consulting Group, specialising in the supply chain, ERP and S&OP to help manufacturers and distributors elevate business performance. She provides expertise and advice on maximising the customer experience and enabling profitable, scalable, and dramatic business growth. Arketi named her a Top 40 B2B Tech Influencer and she has been ranked by SAP as a Top 46 Supply Chain Influencer. Lisa has also spoken at conferences such as the Global Supply Chain & Logistics Summit, the APICS International Conference, and the Drucker Supply Chain Forum, and has a book called ‘I’ve Been Thinking: Turning Everyday Interactions into Profitable Opportunities’.

Click here for the full story.

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Lisa Anderson, LMA Consulting, as one of the top writers about ERP. Assessing the existing system and the possibility of a new system requires understanding the business, what ERP systems can do and what the company needs.

There are thousands of ERP blogs available now.

The ERP market is so filled with ERP experts providing advice on systems that it can often result in information overload for the reader. 

We’ve researched and read hundreds of ERP blogs to find which provides the best experience for the reader in terms of expertise, readability, and general usefulness.

We’ve assessed the blogs based on a number of factors, including:

• The frequency of posts, and how up-to-date they are.
• The content itself including how original, insightful and useful it is.
• The writing style; how readable the blog is, and if it’s easy to understand.
• How the blog is presented; the layout, blog design, and font choices.

There are 3 different categories:

Best Writer for anyone writing anything on ERP. 

Best Vendor Blog for any blog operated by an ERP vendor. 

Best Independent Blog for any blog not owned by a vendor but anyone else such as consultants, analysts, and enthusiasts. 

From our research, we’ve selected what we consider to be the top ERP blogs in each section.

The best ERP blogs 2022 (softwarepath.com)

The post Softwarepath: The Best ERP Blogs appeared first on LMA-Consulting Group, a supply chain consulting firm.

Organizations certainly want to move quickly to begin reaping the benefits of the new ERP system as soon as possible, but Lisa Anderson, Manufacturing and Supply Chain expert and president of LMA Consulting Group, cautions that it’s better to take the time to get the vendor selection process right than to rush into something that you might regret down the road.

From laying the organizational groundwork to planning for the long haul, IT experts offer insights on how to make this challenging business transformation smooth and successful.

Enterprise resource planning (ERP) systems are the backbone of modern businesses. The agility afforded by a modern ERP system backed by honed business processes can help any company compete in today’s business environment, which has been severely affected by supply chain disruptions as well as disruptions to traditional business operations due to employees working from home due to COVID.

If your organization has cobbled together point solutions or limped along with a legacy, on-premises ERP platform, it may be time to invest in overhauling how your business operates.

An ERP implementation or migration can be a daunting prospect, especially for organizations with antiquated business processes customized to fit the limited functionality of their current enterprise stack. The following tips, however, can help organizations select the right ERP vendor and implement the new system with a minimum amount of pain, and a maximum amount of success.

Click here for the full story.

The post CIO Magazine: 11 Tips for selecting and implementing an ERP system appeared first on LMA-Consulting Group, a supply chain consulting firm.