Only companies that automate, digitize, and utilize modern ERP systems and advanced technologies will survive, let alone thrive during the next decade. There is no doubt that volatility, uncertainty, complexity, and ambiguity (VUCA) have increased in importance since the pandemic, and even though progress has occurred, there is no end in sight. Navigating these turbulent times while providing superior customer service and delivering profitable growth requires different ways of thinking and doing business. Advanced technologies are no longer nice-to-have; they are cornerstone to success.

In the current business environment, executives must find ways to do more with less so that they can expand their business with fewer resources. Automation, robotics, the better use of ERP, digital twins, artificial intelligence, data analysis and predictive analytics are simply required to meet customer demands with limited resources as baby boomers retire and high-skilled talent is in scarce supply. Advanced technologies enable a more consistent quality with a quicker turnaround and tailored to the customers’ needs.

Although it is always better to evaluate ERP systems and related technologies to ensure the best fit to business requirements, it has become an imperative during these volatile and turbulent times. Cash is limited due to rising interest rates, increasing input costs, and greater investment needs required to support changing business conditions. Thus, wasted time and effort as well as unhappy customers and potential lost revenue and profitability is unacceptable. To ensure scalable growth, manufacturers must evaluate ERP systems and related technologies to protect their cash flow and ensure a robust return on investment.

No matter the system, start with your business requirements. Look beyond bells and whistles and technology salespeople to your business needs. Prioritize the functionality that will support your unique differentiators in the marketplace, your profit drivers, and what’s unique about your industry, product, or service model. In addition to focusing on these requirements, document your full requirements to keep your potential software partners in check. Put together a standard assessment process and expand upon these basic requirements with demonstrations, deep dive discussions, and proof of concepts for your critical success factors.

Review apples-to-apples pricing as every supplier will provide complex pricing that will lead you to the wrong decisions if not standardized across a three-, five- and ten-year time horizon. Finally, keep top of mind that evaluating the software partner is the 80/20 of success. Since ERP implementations fail to deliver expected results 80% of the time, you must ensure you are part of the 20%.

For example, a consumer products manufacturer wanted to evaluate ERP and related technologies to include WMS (warehouse management), e-commerce, CRM, and business intelligence systems to best support their future customer and business requirements. Flexibility, value-added ordering functionality and customer personalization were of critical importance to growing the business while automation, data analysis, and advanced warehousing functionality were important to the customer experience and profitability. We developed requirements and kept the process on track to ensure customizability, value-add features, and scalability while comparing pricing and partners.

Smart manufacturers will pursue ERP and related technology upgrades to prepare for growth. Forward-thinking manufacturers will dedicate the appropriate time and resources to ensure success. Since it will have a significant impact on customers, profitability, and scalability, pursuing an ERP evaluation will be your most important strategy to protect your business. At a minimum, mitigate your customer and financial risk. At a maximum, leverage your ERP system and related technologies to take your business to a new level of performance.

Originally published in Brushware, November/December 2023

The post How to Evaluate ERP Systems & Related Technologies 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

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CLAREMONT, CALIFORNIA – September 29, 2023 –  Manufacturing and Supply Chain Consultant Lisa Anderson, MBA, CSCP, CLTD, known as the Strongest Link in Your Supply Chain® and President of LMA Consulting Group Inc.,  underscores the pivotal role of Enterprise Resource Planning (ERP) systems in modern business strategy. LMA Consulting Group specializes in supporting manufacturers and distributors in strategic planning and comprehensive supply chain transformations, focusing on enhancing the customer experience and facilitating robust business growth.

In a rapidly evolving digital age, the emphasis on ERP systems has never been more pronounced. More than just supportive tools, these systems are integral for sustaining profitability and addressing evolving customer needs. “Modern ERP systems are no longer just about transactional processes. They are now pivotal in meeting customer requirements, supporting automation and integrating other essential technologies like AI, IoT, CRM and e-commerce. The real question today is not just about possessing an ERP system but ensuring it aligns seamlessly with business aspirations and customer expectations,” stated Ms. Anderson.

Given the hefty investment ERP systems often represent, their implementation requires meticulous planning and strategic alignment. “A roadmap is essential for achieving desired outcomes. I’ve seen instances where the urgency led to ERP implementation without data migration causing elongated post-implementation recovery phases, resulting in lost customers and revenue,” she added.

A strategic evaluation, coupled with a thorough ERP assessment, can guide businesses in identifying core business requirements, discerning profit-driving factors and ensuring that their ERP system aligns with their overarching goals. With the complexities of ERP solutions, where each provider is touting unique features, seeking external expertise provides an unbiased perspective, allowing businesses to navigate the complexities with clarity and confidence. 

For deeper insights into navigating the complex landscape of ERP and global supply chains, download Ms. Anderson’s special report The Road Ahead: Business, Supply Chain & The World Order. Additionally, her resource SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth offers invaluable strategies for organizations. Download it at LMA website,  Amazon and Apple.

About LMA Consulting Group – Lisa Anderson, MBA, CSCP, CLTD

Lisa Anderson is the founder and president of LMA Consulting Group, Inc., specializing in manufacturing strategy and end-to-end supply chain transformation.  Ms. Anderson is a recognized Supply Chain thought leader by SelectHub, named a Top 40 B2B Tech Influencer by arketi group, a Top 16 ERP Expert to Follow by Washington-Frank, in the Top 10 Women in Supply Chain by Warner PR, in the top 55 Supply Chain & Logistics Experts by flexport, and a woman leader in Supply Chain by RateLinx. She has been interviewed by Fox News and published the ebook, Future-Proofing Manufacturing & the Supply Chain Post COVID-19, Her primer, I’ve Been Thinking, provides strategies for creating bold customer promises and profits. An expert on the SIOP process (Sales, Inventory Operations Planning), advancing innovation, and making the supply chain resilient, Ms. Anderson is regularly interviewed and quoted by publications such as Industry Week, Bloomberg, and The Wall Street Journal. For information, sign up for her Profit Through People® Newsletter or for a copy of her book, visit LMA-ConsultingGroup.com.                 

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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

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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.

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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.

The post Washington Frank: The Top 16 ERP Experts You Need To Be Following This Year appeared first on LMA-Consulting Group, a supply chain consulting firm.

If there is one thing in common with every client (big or small) in the current business environment which is characterized by significant volatility and uncertainty, it is the increased level of complexity of supply chains. As the old saying goes, you are only as strong as your weakest link in your supply chain! That has proven true and has led to unfettered complications in successfully navigating the current supply chain environment. In fact, it is why we are have been focused on helping clients become “the strongest link in your supply chain”.

Customers do not care about the complexities of our supply chains. They want the “right” products delivered at the “right” place at the “right” time at the “right” price. In fact, during this volatile post/emerging from pandemic timeframe, customers are laser focused on which suppliers can provide solid delivery performance as measured by high levels of OTIF (on-time-in-full) and a superior customer experience. They will give volume to customers that can deliver!

On the other hand, companies are laser focused on increasing operational efficiencies so that they can deliver to customer expectations while meeting profit objectives. Because of the significant level of supply chain disruptions and increased money supply, costs are escalating. Companies want to limit the price increases they have to pass on to customers as they will lose the business if substantially more expensive than competitors without a commensurate increase in product quality or service. Thus, there is an increased interest in increasing efficiencies, automation, and “doing more with less”.

Utilizing ERP to Improve Service & Decrease Costs

Almost every client has an ERP system; however. ERP systems perform the transactions required to support taking orders, purchasing materials, planning production, picking and shipping product, handling returns, and invoicing customers. NOT every client has a modern ERP system. In today’s world of global, complex supply chains and increasing customer requirements, advanced functionality is needed to support customers without adding armies of people to support the processes. Additionally, modern ERP systems provide additional opportunities to automate, digitize, predict what needs focus (example: predictive maintenance vs. preventative maintenance), and they enable the collection, assimilation and analysis of data for decision-making.

Performing a quick assessment of your business needs as compared with your system functionality and capabilities is a great place to start. When evaluating whether an ERP upgrade is needed to support customer and profit objectives, we recommend starting with a comprehensive yet directionally correct assessment of business process requirements. For example, when working with a control panel manufacturer, we quickly determined that their current ERP system would not meet their growth plans. Not only were they struggling with multiple add-on software options that didn’t seamlessly connect, resulting in double keying and a hodgepodge of data, but they also needed advanced functionality with customer relationship management (CRM), configure-to-order (CTO) and engineer-to-order (ETO) and related customer interfaces, and advanced reporting and analytics. Thus, an upgrade was required.

Therefore, we started a deep dive of business requirements to select the appropriate software. We talked through and observed the business process requirements that would support sales and customer relationship management, engineering design, order entry, configure-to-order, production planning, purchasing, operations, shipping, invoicing, accounting, quality control, data management, and reporting/ data analysis. Based on that, we documented business requirements and, most importantly, identified the critical success factors that were unique to their industry, company, specialized process, and /or unique system requirement. Armed with this data, we were able to develop a request for proposal, demo ERP systems, compare pricing, and decide upon the best fit system to meet their objectives for the best return on investment.

Utilizing Other Technologies to Increase OTIF, Reduce Costs & Inventory

In addition to utilizing an ERP system, to meet the increasingly complex customer requirements without adding overhead, other technologies will add value. Similarly to evaluating business requirements for ERP systems, start by evaluating your needs to support customer and profitability objectives. Some of the technologies required to support success in the current volatile and uncertain business environment are as follows:

• CRM (customer relationship management) software to proactively manage customers and potential leads
• Forecasting software to forecast customer demand
• Advanced planning software to go beyond traditional MRP and simple planning systems to better navigate complex supply chains
• Warehouse management software (WMS) and warehouse execution system (WES) to increase warehouse efficiencies and achieve fulfillment objectives
• Transportation management software (TMS) to optimize transportation planning and freight costs, lead times and service objectives
• Predictive maintenance systems (using artificial intelligence and internet of things (IoT) to predict maintenance needs to target resources
• Manufacturing execution systems (MES) to monitor manufacturing performance and tied to machines with IoT
• E-commerce systems to support B2C and robust B2B effectiveness
• Business intelligence systems (BI) to analyze data and consider what if scenarios
• Predictive analytics to take BI and data to the next level
• Blockchain although this type of software remains in an R&D phase for the majority of businesses
• Additive manufacturing/ 3D printing to print products on the fly
• Digital twins, robots, drones, RFID, autonomous vehicles, virtual reality, and more

The key is not to get caught up in fads. Start with your business requirements and determine the “right” place to invest to support your business objectives where the efforts and investment will support critical customer requirements and/or provide a significant return on investment.

Turn Data into Insights

Data is especially essential to driving OTIF and efficiency improvements. Simply tracking information in your ERP system and related technologies is not enough. It is more important to use your data to evaluate progress towards objectives and make directionally correct decisions to move the business forward. The key is to turn data into insights.

When your data analysis is achieving directionally correct results, it will make sense to take it to the next level with dashboards and slicing and dicing ability with a business intelligence solution. Once you can slice and dice data and have a dashboard available with the push of a button, consider moving on to advanced data topics such as predictive analytics. Instead of solely using data for decision-making, you can take it to the next level and predict your future so you can get ahead of the competition.

The Bottom Line

To succeed in these volatile and uncertain times, there is no doubt you’ll need a modern ERP system and related technologies to automate, digitize, meet customer expectations, accomplish more with less, and make directionally correct decisions rapidly by turning data into insights. Don’t go overboard and do everything and accomplish nothing, but get started on your journey with an assessment of your needs immediately before your competition passes you by.

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Achieving Customer Growth by Turning Data into Insights

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