The Red Sea disruption forcing ships to go around Africa creates a new Supply Chain reality. It can lead to late deliveries of inventory resulting in disruptions affecting business globally.
One of the noticeable issues is the Reuters report, “Tesla, Volvo Car in Europe Pause Output of Certain Car’s models.” Besides the production disruptions, late inventory arrival can result in order cancellations, often creating excess inventory which affects the warehouse. Besides the additional labor cost, it often results in using a 3rd party warehouse or purchasing/leasing additional warehouse space. These disruptions can lower profit margins and cause cash flow issues.
Today’s reality of business disruptions makes companies realize that their outdated ERP Software, should be replaced with new integrated ERP/WMS Software that has a Warehouse Management module enabling companies to avoid business disruptions by having the features below:
• Inventory availability after it was allocated for production or future orders.
• Real-time Analytic information reflecting sales activity, what products should be ordered, and when.
• From which vendor to purchase based on analytic information of promised delivery dates.
• Customers’ buying patterns of products ordered. If the customer’s current purchases are less than in the past, the reason for this should be investigated.
• If the accounts receivable overdue payment days have increased, the customer’s financial stability should be evaluated.
Selecting New Software
Before the software selection search starts, a committee should be established. Its members should be key people from each department and a requirements list should be developed.
• The end users can provide important information that will be needed when the demos are conducted and they will have emotional investment once the software implementation starts.
• The developed requirements list should be addressed at each demo.
• All the demos should be a “workshop style” rather than a “slide show” with “bells and whistles.”
• Not having the “workshop style” demo often results in purchasing the wrong software that does not meet the business’s unique requirements.
• Having to change the business model to meet the software requirements will result in business disruption and the end users having a large learning curve.
• Software functions that are beyond the users’ ability to learn will result in long implementation, and the project might be eliminated.
• Before the decision to purchase the software is made, a visit to the software provider’s client in the same industry should be arranged.
• Three people should be met at the vendor’s client site: the CEO, CFO, and IT manager.
• The main question the above people should be asked: “How good is the software house hotline support?”
• This is a crucial factor that should be considered. Not having good hotline support will result in severe business disruptions when an issue occurs and immediate support is not provided.
Issues Arising from Multiple Software
Often companies that have legacy software choose rather than replace it with new integrated ERP/WMS Software that has Warehouse Management they choose to buy it from Warehouses Software Vendor and have it integrated with the legacy software.
Doing it will result in the issues listed below.
• Stand-alone warehouse software can result in integration issues resulting in inaccurate inventory.
• Having multiple software platforms creates issues when it’s upgraded.
• Excess user efforts accessing multiple software results in business disruptions.
• Often when one of the vendors has a software upgrade it might result in integration issues.
• When having to contact multiple hotlines, vendors often don’t take responsibility resulting in business disruption.
Case Study: Multiple Software
• Large Food Manufacturers/Distributors decided not to upgrade their legacy software and purchased four software platforms from different vendors hoping it would enable them to meet their business requirements.
• It resulted in the users having to access multiple software platforms resulting in excess efforts retrieving the needed information.
• When one of the software platforms was upgraded sometimes it affected the main software platform or the other platform resulting in business disruptions.
• When connecting the software hotlines each vendor claimed it was the other software vendor that caused the issues.
• After a few incidents the management team decided to purchase new single database software that will have all the software modules needed supported by one vendor.
• Before starting the software, a search committee was established having key end users for each department and a requirements list was generated.
• The list was presented to each software vendor who gave the demo and made sure that besides addressing the business requirements the end users could master it without a large learning curve.
Benefits of Single Data Base ERP/WMS Software
• The end users without having to access four different software platforms instantly find the information needed.
• The customers were able to place orders on smartphones and have a web portal where they could view various needed information.
• Inventory in the warehouse is picked by using Voice Pick which has multiple language capabilities addressing today’s labor reality and RF Guns.
• Streamlining the operation resulted in lowering operating costs and improved customer satisfaction.
Overseeing Software Implementation
Manufacturers and Distributors, who had outdated software, experienced production, and inventory control issues. It resulted in shipment delays leading to products being returned, excess inventory in the warehouse, and penalties affecting the accounting department which had to issue credits and adjustments, often missing the vendor’s early payment discount date.
When the shelves were consolidated to receive new inventory, products sometimes were misplaced and were not found until the physical inventory took place. This resulted in excess inventory becoming obsolete. To resolve these kinds of issues, new ERP/WMS Software was purchased from the company we represent.
The computer manager designated to oversee the software implementation was related to the president. Unhappy with the decision, feeling that the 20-year-old software he developed met the company’s requirements, he decided that purchasing the new ERP/WMS Software was the wrong decision and became an obstacle to implementing the software. His behavior resulted in implementation delays. The users, seeing his attitude, lost interest in the project and did not practice what they were taught.
The president, with whom I had a long-term working relationship, asked me to meet him for lunch and expressed his concerns about the ERP/WMS Software going live on the targeted date.
I asked the president to assign a different person to oversee the project. To prevent a family rift resulting from this action, I suggested the person be called the computer manager’s “assistant.” Extensive individual training should be given to the manager to enable him to get over the fear of learning the new software. After the training ended, the manager got comfortable with the new ERP/WMS Software, assumed the project’s responsibilities and the end users practiced what they were taught every day.
Case Study: Benefits of the New Software
Twelve months after the company went live with the new ERP/WMS Software, the president invited me for lunch again and told me:
“I would like to thank you for helping resolve the issue I had with my relative. It prevented a family rift. The new integrated ERP/WMS Software streamlined the production and enabled my company to ship the products the same day, The company operating costs were lowered and the inventory accuracy is 99.6%.”
Key Person Overseeing Implementation
The large Distributor who bought the ERP/WMS Software from the company we represent had a computer manager who was eager to learn the new software functions. As soon as the project started, he addressed the users’ concerns about learning the new software and made sure they practiced daily. It resulted in going live on the estimated date and budget. The end users, before having the new ERP/WMS Software, had to access multiple software platforms to retrieve needed information. They were happy being able to retrieve information instantly without having to access multiple screens. this resulted in decreasing their workload and improved customer service.
Implementing Software without Parallel Run
• Before the Software implementation is conducted, the business requirements study should be conducted and a test environment should be established.
• The legacy software data should be downloaded to the test environment daily and verified for accuracy.
• Data verification will eliminate the need to run parallel software.
• The end users should be trained in a test environment that has the information they are familiar with.
• Software vendor key personnel should be assigned to each department i.e. accounting, warehouse, and purchasing.
Going Live with New Software
• Company-wide tests should be conducted in which the end users create errors in the “test environment” and then be able to correct their mistakes.
• If the users cannot correct their mistakes, the going live date should be postponed and additional training should be given.
• After going live with the new ERP/WMS Software, the training and technical staff should remain on-site to assist with any issues that might arise.
ERP/WMS Software Case Study
Attending the event at a major accounting firm I met the large Food Manufacturer/Distributor CEO who was the keynote speaker describing his experience of going live with the new ERP/WMS Software he bought from the software company we represent.
“I had a sleepless night before we went live with our new ERP/WMS Software concerned about shipping the daily 800 orders to our customers who depend on us. I was relieved that we didn’t have any issues because the ERP/WMS Software House training and technical team were at our location. If any of the users had an issue, it was immediately resolved.
The training and technical team stayed at our location until they were convinced that our users were proficient.
I was also pleased that our ERP/WMS Software house Hot Line support personnel are all technical. When my users call, they get an immediate response, and any issues they experience are immediately being resolved.”
About SMC & Dani Kaplan:
Since 1980, Dani Kaplan https://www.smcdata.com/ has worked with Manufacturers, Distributors, and Food companies as a trusted advisor helping them lower their operating costs, streamline their operations, and control the inventory.
Dani can be reached at Dani.kaplan@smcdata.com