The pace of change for ERP software is often dominated by urgent business imperatives: a new acquisition demands a major migration or implementation project, a new customer introduces a sudden need for more expansive reporting, or a new government regulation requires more robust data protection measures.
ERP system enhancements, meanwhile, are driven by continuous, phased, iterative, work: there will always be new challenges and/or opportunities for improvement. A company almost never gets to look at its ERP implementation and say “done.” With a new need almost always on the horizon, it can be difficult to focus on genuinely improving an ERP implementation.
In our experience, companies can begin to suffer from “ERP burnout.” Implementation phases that were planned when the ERP was originally introduced are set aside (temporarily, at first) to give the staff a breather from the hard work and long hours. Over time, another phase or two may be completed with their own pauses. Eventually, progress slows or stops and later planned phases are never actually completed.
At PSGi, we have the proven ability to work with clients to identify and execute ERP implementation improvements that drive real operational value. In this article, we take a look at some avenues for overcoming burnout and taking steps to improve your ERP implementation.
Maximizing Valuable Functionality in the ERP You Already Own
Today’s ERP software covers a huge range of potential functions and use-cases. Many companies have fairly limited knowledge of the full capabilities of their ERP solution. Understandably, they focus on the portions of their package that are most relevant to their individual urgent day-to-day business workflows. In other cases, module implementations that were planned for a future development phase get set aside--leaving valuable functionality on the table.
In this context, improving your ERP may only require implementing a module or extending functionality that already exists in your current solution. We’ve worked with organizations adding the finite capacity scheduling module years after the initial implementation of standard ERP functionality. Others have added a quality management module that was planned as a later project. We’ve worked with other clients to turn on functionality like material lot control and lot tracking, which they had never gotten around to before. The software vendor may also have released new, highly desirable modules since the implementation started. All of these are ways to get more return from your original investment.
Every industry is different, and there are certainly times when custom development or third-party software is the right solution. But first ensure you perform a comprehensive assessment of your existing software to ensure the desired functionality isn’t already in your existing ERP. We’ve seen some organizations make huge investments in new software and the accompanying formidable cost of integration when an existing module could have been deployed at a small fraction of the cost and most of the desired functionality. Employing solutions available in your existing ERP alleviates additional licensing costs, new system training costs, and integration costs since the solutions are already integrated within the ERP.
In some cases, adding off-the-shelf modules (e.g. Quality Management) offer an opportunity to automate manual reporting/tracking of the relevant operational data, improving efficiency and providing more transparent, timely reporting. Added functionality helps capture workflows and data that simply weren’t included in the original ERP implementation.
Examples of standard ERP packages that might not be implemented during initial phases but can be implemented later and offer valuable capabilities include:
- Lot Control: From food safety and allergen management to shelf-life control, bringing more detailed reporting and control to the warehouse offers value for a wide variety of industries. Think “How do I perform a recall?”
- First-in-First-Out (FIFO) Inventory Control: Ensuring that the first products received in the warehouse are the first ones shipped to market helps minimize product loss due to expiration or obsolescence.
- Automated Pricing: ERP solutions usually offer comprehensive pricing, discounting, and promotional pricing modules that enable companies to put in place competitive and profitable pricing schemes.
- Finite Capacity Scheduling: Standard Material Requirements Planning (MRP) functionality does not take into account capacity restrictions. Finite Capacity Scheduling modules enable users to ensure sufficient production resources (equipment, manpower, materials, etc.) exist to complete work orders or schedules without unanticipated stoppages eating away at profitability.
- Vendor-Managed Inventory: Tracking the inventory at your customer locations (production inventories, warehouses, store shelves, etc.) and replenishing inventory before stockouts or maintaining minimum inventory quantities is an effective and profitable win-win partnership between vendor and customer.
Third-Party Integration for a More Powerful ERP
Integrating new third-party apps and/or technology environments is a common target for investment in expanded functionality. Logistics/distribution is one core business area, for instance, where we’ve seen a marked trend toward adopting third-party partners. Outsourcing distribution and logistics offer the opportunity to address a complex management challenge, taking advantage of the economies of scale achieved by specialized logistics firms. Effective ERP-3PL integration is an essential foundation for managing this partnership as efficiently and effectively as possible.
Other examples of 3rd party apps we have recently helped clients implement as part of a hybrid ERP environment include:
- Promotion Management: from automating seasonal or conditional pricing promotions to tracking spending on sales rep samples, there are many valuable applications for adding promotion management into your ERP environment.
- Deduction Management: many large organizations employ financial incentives designed to increase sales, shorten payment processing, increase inventory turns, decreasing customer-imposed fines, etc. Effectively managing on-time and right-place deliveries, advantageous payment terms, and generally complying with customer contractual terms and conditions goes a long way to reducing cost of goods sold. Tracking these costs in your ERP can help understand where you’re falling short in achieving your objectives and potentially being penalized for it.
- Sales and Ops (S&OP): is an integrated business management process that includes the forecast leading to a sales plan, production plan, inventory plan, customer lead time (backlog) plan, new product development plan, strategic initiative plan and resulting financial plan
- Warehouse Management (WMS): specialized warehouse management requirements are often met with WMS applications that offer functionality that many ERP solutions do not provide: kitting, smart trip generation, pick-to-light, backhauling, palletization, and more.
- Barcode Inventory Management: hardware and software systems that enable manufacturers and distributors to perform transactions quickly, accurately and securely while delivering lot tracking and progress tracking capabilities from supplier to manufacturer to distributor to end-user.
- GS1 Standards Implementations: are designed for trading partner collaboration to maximize the cost-effectiveness, speed, visibility, security and sustainability of their business processes through solutions based on GS1 global unique numbering and identification systems.
Helping Users Get The Most Out of Your ERP
Personnel are bound to change over the long lifetime of ERP software at most companies. Users may have received comprehensive training during the original implementation, but they may not be with the company anymore. The current implementation can be a “work-generation” (or more) removed from its initial deployment, yet formal training has long since ended.
Furthermore, in many cases, ongoing ERP training is relegated to the bare minimum provided by co-workers. Employees too often receive “keystroke” training on the commands needed to fulfill their daily job functions without any understanding of what the software is doing behind the scenes nor the importance of their keystrokes. Users may be apt to use workarounds that miss key data entry requirements. Formal training can offer real opportunities for a more effective ERP implementation.
Modernizing an older ERP to deliver an improved user experience can also help get more value out of your solution. A more intuitive UX can mean easier onboarding for new employees, more efficient work, and fewer mistakes. Interfaces designed to work more like familiar personal apps help minimize training needs and improve both employee work quality and end-user satisfaction.
Knowledge is Key: Unlock Your ERP
A thorough understanding of specific business challenges and objectives, combined with a broad knowledge of ERP functionality, is the key to getting the most possible value out of your ERP implementation.
Whether it’s understanding the full potential of software you already own or implementing a third-party app and integrating it with your existing ERP, knowledge and implementation experience is essential to moving forward effectively without getting bogged down or burnt out by the pace of change.
That’s precisely how PSGi helps our clients build the ERP they’ve always wanted. With a deep knowledge-base on ERP capabilities, experience across different types of manufacturing and distribution, and know-how working with both smaller and larger firms, we understand how to keep business-critical ERP projects moving while taking full advantage of your software investment.
If you’re interested in learning more about leveraging PSGi’s knowledge to build a better ERP, you can get in touch with us here.