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 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