ERP For Manufacturing - The Nine Great Benefits

Synchronicity. It is something every organization hopes to achieve, but more often than not falls a bit short of attaining. When we talk about synchronicity we are speaking of principles of connection, where the parts work in total alliance with the whole. Historically, synchronicity has been of particular importance in manufacturing where the quest is always for a seamless connectivity between product planning, product development, material sourcing, and shop management. Indeed, synchronicity in manufacturing is a direct result of the knowledge (data) that any one part of the system has about the whole facility at any one moment.

To achieve synchronicity in manufacturing, enterprise resource planning systems (ERPs) have been developed to integrate all data of an organization into a unified system. Typically, ERP systems use multiple components of computer software and hardware to achieve the desired integration of a manufacturing system. A primary part of most ERP systems is the use of a real-time, connected database structure to store information for use by the various system modules.

In short, ERP systems combine hardware and software in a single functional package that covers two or more systems in the manufacturing operation. What are some of the benefits for the use of an ERP system in manufacturing? Though the list is long, here are nine great reasons for implementing ERP in a manufacturing operation:

1) Synchronicity: Again, the greatest benefit to be gained from ERP integration is having everyone in the production operation on the same page looking at the same real-time data.

2) Data Input Only Once: When data is input in one part of the system, the whole system has access to it. From estimates to work orders, from payroll to shipping, any input data is available to everyone. This, then, leads to the next point of...

3) Less Spreadsheets: Since all data is in the single-source system, production information does not have to be reproduced on traveling (and often out-of-date) spreadsheets.

4) Orderliness: When ERP is used to replace two or more independent applications, it eliminates the need for the external interfaces that used to be required between systems in non-ERP operations.

5) Shortened Cycle Times: ERP works well with just-in-time pull-production, increasing inventory turnover and reducing inventory cycle times.

6) Efficient Direct Labor: Direct labor costs are reduced through more precise and real-time production data. For example, routers might give clear and concise production instructions. As well, clocking on and off a job is made easier through the use of integrated recording systems such as Graphic User Interfaces (GUI).

7) Less In-Direct Labor: Through integrated GUI time clocks, in-direct and non-productive labor time is accounted for by employees, and production is measured in terms of output relative to time spent.

8) Reduced Set-Up Times: In ERP, scheduling is tailored to build production around standardization, repetitive processes, and other lean manufacturing principles to reduce machine set-up and break-down times.

9) On-Time Delivery: Ultimately, the primary goal of on-time delivery is achieved through the efficiencies gained in ERP system unification. Production contingencies are anticipated and built into the scheduling system as a result of continuous data flow.

In conclusion, these nine great benefits realized through ERP integration are the result of one thing-synchronicity in the total operation. Manufacturers who chose to utilize ERP principles, as well as robust software and hardware within the system, can expect greater productivity through enhanced efficiencies, as well as better bottom-line profits.

Increase the Productivity and Profitability Through ERP

Enterprise resource planning (ERP) is an enterprise level information system that is designed to coordinate all the resources, information, and activities required to complete business processes. It can be consider as an integrated management of business which covers the techniques and concepts required.

Traditional stand-alone applications were designed for specific needs, with limited functionality, and isolated from other departments. On the other hand, ERP is a concept to consider many departments and combining their unique systems into a single unit, enabling seamless communication between these departments, clients and management.

Initially ERP package was consider a costly affair, so it was only possible for very large Multi National Companies to implement it. Today many companies over the world have gone in for implementation of ERP and it is expected in the near future that 60% of the companies will be implementing one or the other ERP packages since this will become a must for gaining competitive advantage.

Modern ERP Solutions are highly customized, covers almost everything that you need to run your organization whether it may be small enterprise or a full fledged multinational firm. It includes the system starting from the employee's entry inside the gate to final product to customer for a product manufacturing company. All facilities like customer complaints, accounting & finance, HR, sales & marketing, purchase, inventory, tax details like excise, sales tax etc including export & VAT documentation will also be handled by the system. To maintain all this it has high degree of security/access control. Ultimate result is that it helps in increasing productivity and better profits.

Benefits of ERP

* ERP ensures timely completion of all business activities and increases customer service satisfaction. Helps you to analyze, plan and forecast the business activities by giving you clear view from any angle.

* ERP facilitates information flow across different departments or sections of the organization. It can connect your every business premises and give you consolidated and complete view.

* ERP bridges the gap between business partners, suppliers and customers allowing ongoing collaboration.

* It helps you efficiently and cost-effectively manage Man Power, Money flow, Stock and Machinery.

* With ERP, achieve high security and privacy protection along with the sharing of data by proper access rights and roles definition for users.

* ERP also provides important user friendly information to the company. When changes occur the system will update accordingly, also allowing individuals to work more effectively and decrease redundant data.

* ERP also provides some high-end business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) to enable for better decisions and hence improve business processes.

In today's dynamic business environment there is a strong need for the business to become globally competitive. The key for success lies in customer satisfaction, through understanding customer needs, and providing quality goods and services in the shortest time possible. ERP is now proved to be a better solution for project management.

ERP and SAP ERP Understanding the Basic Concept

Historical Background
Around 1860, during the first wave of the Industrial Revolution of the late 18th century, companies around the world became interested in improving operations as a response to market changes. In the early 19th century, companies operated in a supplier's market (vendors would produce and clients would buy this production)., Later,mid-1800s, as companies became more numerous, larger and increasingly complex, competition increased, turning the marketplace into one in which the consumer had more power (clients determine more what the companies need to produce). This new, consumer-oriented market demanded productivity, cost controls and marketing strategies. In this new environment, productivity became the new focal point as companies attempted to improve on their core manufacturing processes to gain an edge over their competitors.

IT Background
On the other hand, in the late 1950s, information technology appeared in a material way in the workplace. The term software engineering was used to describe that era's initial programming-development efforts, while the concepts off databases and applications started to mature rapidly. Software engineers and hardware manufacturers started to integrate IT within businesses the business. One of the pioneer software applications built to assist businesses' needs was the manufacturing control systems, which reached a mature stage in 1975 when material requirements planning (MRP) software entered the marketplace. MRP systems were designed to support control on the shop floor and overall manufacturing operations as well as production planning based on sales forecasts. Later, a more complete version, MRP2, was delivered, which including capacity planning functionalities. Both versions focused on manufacturing, albeit with poor integration of other areas like human resources, finance and marketing.

Business and IT
When integration was identified as a key success factor in business-support software, ERP systems were developed to fulfill this key requirement. ERP systems now attempt to integrate all the basic functions of an enterprise, regardless of the organization's business or industrial sector. ERP systems can be built in-house or acquired from such world-class software companies as SAP and Oracle as well as from smaller, lesser known ones.

Why Would Organizations be Inclined toward ERP?
In the our data-centered economy, information is considered a competitive advantage, and, therefore, the issue of obtaining reliable and timely information is absolutely critical to a company's success. Consequently, organizations need to base there operations on information systems like ERP. By implementing this kind of tool, a company will obtain different benefits in terms of processes, people and technology. Specifically,

• Control: Automation, monitoring alarms.
• Integration: All information is integrated so processes are cross-company instead of isolated activities.
• Opportunity: Timely reports and data analysis.
• Productivity: As an integrated tool, it decreases rework and errors.
• Security: User Administration, profiles and authorization.
• Scalability: Having a solid base that can grow with the incorporation of new, compatible software solutions.

The issue of implementing ERP can be broken into different stages according to methodologies of software projects. The first stage is to find a consulting partner to guide the company in the project phases listed below:

• Planning: Project plan and project charter definition.
• Blueprint: Technical and process design based on business needs.
• Testing: Individual and integrated testing of processes and data.
• Training: Plan and execute training and knowledge transfer sessions.
• Cut-over and Production: Data load and operation of the new system.

The key factor for successful implementation is to understand that ERP is the integration of all areas in the company and not as an isolated IT initiative.

This means that the implementation project should include three dimensions: People, Technology and Processes, all of them aligned to the business strategy.

How will Implementations Vary between Older Businesses and Start-ups?

As explained before, an ERP implementation project is a combined effort between IT and the business as a whole. It starts and ends with the business' needs. The business needs from a new company differ a lot from those of one firmly established in the marketplace. Relevant differences in terms of ERP implementations can be summarized as follows:

Business Process Design: Older businesses normally have already defined processes; while new businesses need to identify them. This will represent much more complex scenario higher complexity for new business implementations because it will take longer to develop the process blueprint and detailed specifications.

Master Data: For a newly formed company, data cleaning activities, which normally are highly complex, are not required. Data load for new businesses is simpler, lowering the risks for the project as well as costs and implementation time.

Testing: Since new businesses have not operated for a long time under real conditions, special scenarios are difficult to foresee affecting the quality of testing. Special circumstances can appear later in the production environment and will represent a risk since they were not tested in the developmental phase. This will affect the business because it can take some time to understand how to configure the system to fulfill these new requirements.

A Prescription For the New Economy

By now certain concepts have been widely accepted about the recession of 2008, almost like the diagnosis of a disease. One prognosis about recovery is that we are moving into a new economy rather than returning to what once was. We are advised by the doctors (the so called experts and the business media) that to avoid coming down with another case of the economic flu in the near future we need to be inoculated with a healthy dose of innovation before venturing too far out into this new economic reality. But what type of innovation will boost our business immune system sufficiently in a new economy where viral bugs like costs, regulations and competition seem to be mutating rapidly?

Well, first I can tell you that it's not the kind of innovation that has made the term little more than a buzzword for many of us. In this article we will explore a common sense process for understanding exactly what type of innovation is prescribed for this new economy, and some proven strategies to get it done.

In the past, the term innovation has most commonly described new products or services that create new markets or leverage untapped opportunity in existing markets. The innovation needed to thrive in the new economy will likely go well beyond new offerings to involve changes to your entire business model in order to be effective.

In a recent edition of Trends Magazine an article featured a list of questions that every business should ask about their business model in order to insure they succeed in this new economy. While discussing that concept with a colleague, we began to put together a similar list for small and medium sized wood products manufacturing businesses. Here are five key questions we came up with:

· First, what is main thing your business must do in the new economy to assure that you are paid the highest price in a timely manner for your products and services?

· Second, is there anything about how you produce your products that a customer can understand that would justify paying you more than your competition?

· Third, what can be done to reduce the cost of producing your products that will not reduce quality, value, competitiveness or profit?

· Fourth, what can be done to reduce the costs of keeping, managing and training employees?

· Fifth, if your primary customer base were reduced by half next month what would you do immediately to replace that lost revenue?

If you can confidently provide the answers to those questions you are well on your way to grooming your business model to insure growth and stability in the next decade. If you cannot answer some or all of those questions... well, you are probably already well aware that some changes need to be made. So how do you begin the process of improving your business model so it can thrive in the new economy?

Let's consider the best or at least the most profitable answers to the five questions above. You might even consider each one as a category by which to evaluate your business model for possible innovation that is compatible with the new economy.

First, the best way to be paid a fair amount in a timely manner for your products and services is to deliver a flawless product consistently and more quickly than your competitors, or at least in line with the customer's best expectations. If this is not currently possible for you to accomplish then you will constantly be chasing market share in the new economy.

Second, unless you are in a very unique market, there is virtually nothing about how you produce your product that most customers would understand, that would compel them to pay you more than one of your competitors that is offering a product that is similar in functionality and appearance.

Cabinetry and wood products have been trending in this direction for years but in the new economy it will be a given. In many cases previously rigid architectural specifications have conceded to this reality in most parts of the country and on many jobs, resulting in stapled cabinets hanging right down the hall from cabinets with traditional high quality dowel construction.

Third, the most effective ways to reduce production costs without suffering any negative impact on your products or market share can be divided into two categories: automation and standardization of all processes that are high value or high profit and elimination or outsourcing of all processes that are not. If any of the processes that your business model requires to move a job from contract to final payment are not adding significant value or effectively expediting completion you have a weakness that is either reducing your profit or your ability to compete in the new economy.

Fourth, the only practical way to reduce employee related costs is to reduce the number of employees and the overall skill levels required. This can factor heavily into the decisions you make with respect to the third category of innovation above. As badly as this country needs more high paying jobs, most wood products manufacturers are not going to be able to provide them and remain competitive in the next decade.

It is truly sad for me to accept this reality, being a lifelong woodworker and cabinetmaker that started as an apprentice at the age of 14, but this is now an inescapable truth. Between the unknown costs that are being created by new laws, insurance requirements, etc, the decline of skilled craftsmen in the workforce combined with low interest in the skilled trades among young people, your ability to retain quality employees and control related costs is decreasing at an alarming rate. Ironically, your best shot at being able to create new jobs in the future may depend on how effectively you can reduce these costs now in order to adapt to the new economy.

The fifth and final answer is perhaps the most dynamic. What would you do if there is a second bump in the economy for your niche market or what if a large high-volume competitor decides to expand market share and cuts your prices in order to get your customers? The answer to survival in such situations is often not about where to look for the new customers but how quickly you can adapt to service them competitively and profitably when you find them.

The key is having a business model behind your products and services that can shift into another gear quickly so you can secure that new business by delivering flawless products on time when you get a shot at a new opportunity. That requires a finely tuned chain of processes that can take a job from contract through design and into production for a wide variety of products without major rework on a first run.

If that all sounds like a tall order I can tell you that the worst part is over as soon as you have completed a well thought out plan for changing your business - but here's the secret - don't skimp on the plan! Nobody wants self serve discount flu vaccine, right? In order to formulate the right vaccine to ward off the economic bugs of the new economy it will need to match the strain of the new threats. I haven't seen in depth clinical trials on the solutions offered in this article but I can verify that they are working quite well for our customers in a wide variety of shops in the wood products industry.

It is my sincere hope that this article will be helpful in your efforts to develop an innovative business model and see your business thrive in the new economy.

Software Testing - Software Development Life Cycle

SDLC or Software Development Life Cycle is a software engineering term, which includes all the processes in Software development and deployment. It includes methodologies that are used to design and develop systems. In software engineering the SDLC concept underpins many kinds of software development methodologies. The methodologies referred are the one that help in creating a framework that can be used as a base for developing larger information systems

Testing is sometimes interpreted wrongly. People think that testing should be done after the programming is done for a system or software. In fact testing should be performed at every level of the development cycle.

The most common types of testing involved in the development process are:

o Unit Test: This is the first level of testing in cycle of software testing. The overall product is divided into small units. Testing of these units individuals are termed as Unit Testing.

o System Test: System level is the upper level of unit testing. Whenever there is a large system and different programmers are coding over different units, they are combined and testing done over the combined system is system testing Integration Test.

o Functional Test: When the system is integrated it is tested over its functionality. To test the function of the system I termed as functional testing.

o Automated Testing: It is one of finest way to increase efficiency, productivity and accuracy of the software product. It simplifies the testing practice by reducing the human effort involved. In this we create automated test cases and perform those using automated tools. Automated testing tool repeats the predefined steps and results more accuracy than the manual testing.

Alpha Testing: Alpha Testing is done after the code is competed to check most of its functionalities before actual user start using it. Sometimes a select group of users are involved in the testing. More often this testing will be performed in-house/small scale. or by an outside testing firm in close cooperation with the software engineering department.

o Performance Test: This testing is done when the product is fully developed. Its main objective is to identify the performance of the software as par the customer guidelines.

o Acceptance Test: Testing the system of the software with the intent of confirming accurateness and efficiency of the product and customer acceptance.

Sometimes the software is so complex and big that it is practically impossible to test it completely. Before ending software testing we should keep certain points in mind:

- Testing guidelines should be met
- Test cases should cover every aspect of the software.
- Bugs found in the software should be minimum.
- All the defined test cases should be run at least once.

Once the complete software testing is done the system or software is introduced in the market for the user.

Managing Change - An Occupational Health and Safety Perspective

OHSAS stands for Occupational Health and Safety Assessment Series. It was developed to help organizations control and minimize Occupation Hazards and Risks. The 2007 version of OHSAS 18001 lays a strong emphasis on Change. Occupational Health, Safety Assurance Standards are today adopted by many organizations as part of their corporate governance requirements. Managing the change is not a simple exercise. Change can hit an organization all of sudden or it can sometime be regulated and planned. An agile and a flexible organization will respond to change in much more positive way than an organization with rigid and straight jacketed setup.

It is often said that only thing which is permanent in this world is change. One like it or one don't like, change will take place. If we are prepared, we can take them in our stride and move on and if we are not prepared then change will get over us and we will be doomed. So the best way to tackle the change is to keep ourselves informed and updated. An updated person will be more aware about the world dynamics and can weather the storm in a much sober and calm way.

OHSAS 18001:2007 devotes substantial portion of its written standards on change. When an organization gets certification under OHSAS 18001 standards, it is deemed that the particular organization has an Occupational Health and safety Management system in place.

Any change will require a reassessment of operations and activities which are associated with occupational hazards. Controls are required to be reassessed so that OHS risks arising out of change can be addressed.

These New Requirements of 4.3.1 in OHSAS 18001:2007 covers the Four Important Concepts.

• Identification of Hazard(s) associated with "Change".
• Assessment of Risks Associated with "Change"
• Consideration of the OH&S Hazards and Risks Prior to the Introduction of "Change".
• Implementation of the Controls needed to address the hazards and Risks associated with the "Change".

Ineffective management of change is a leading cause of accidents in workplace. To quote US Chemical Safety and Hazard Investigation Board (CSB):

In Industry, as elsewhere, Change Often Brings Progress.

But it can also increase Risks that, if not properly managed, Create Conditions that may lead to Injuries, Property Damage or even Death. Ineffective Management of change is one of the Major Contributing Factors in many of the Incident Investigations conducted by CSB.

How to Make Sure Your Time Management System Is Working

Is your time management system failing?

Does it seem to take more effort than it is worth?

Does it regularly breakdown?

If your system is failing, then it's time to re-evaluate.

First we need to assess why it's not working:

Is your time management system is too complex? - This is actually the most common problem that causes systems to fail. Is it cumbersome or time-consuming? Do you use multiple tools or require a plan just to plan? If it takes more time to organize than it does to do the work then it is too complex.

Is it redundant? - Do you have multiple lists? Do you use more than one calendar? Are you duplicating work? Use one central planning tool, list and calendar.

Is it portable? - Where do you keep your time management system? Can you take it with you and have access to it at all times? You need to be able to capture ideas and retrieve information in real-time or your system fails.

Does it match your personality or work patterns? - If you are tech savvy, then en electronic organizing system is most efficient. If you are more comfortable with traditional pen and paper then carry your notebook and don't force yourself to struggle with a PDA. The best time management system is the one that works for you!

Tips to keep in mind:

• The simpler the better - Choose the simplest, most direct method to get the job done.
• Keep it centralized - Whatever your system, keep it in one place.
• Make it accessible - Make sure that you can get to your information and capture thoughts and tasks easily in real-time.
• Choose your tools carefully - Select the tools that accomplish what you need without additional bells and whistles that will distract you.
• You are the most important consideration - Your system must suit you, your personality, your work style and your way of thinking or processing information.

An effective time management system should save you time and effort. It should help you make the most efficient use of your time. It should not be a struggle to use. It should feel comfortable. Maybe not initially, but after using it for a bit, if it's still uncomfortable - re-assess, tweak it or ditch it and start over.

Inventory Accuracy in 60 Days

INTRODUCTION

Do you have inventory accuracy problems? Typical symptoms:

o Lots of inventory errors

o Surprise backorders, unplanned shortages, "lost material"

o Nobody believes the records-- numerous calls to "check" on availability

o Air freight bill exceeds the national debt

o Nasty financial reporting "surprises"

o Lack of consensus on importance of accuracy

o Lack of consensus on how to measure it

o Inability to reconcile inventories, cycle counts

o Error causes largely unknown

o Weak/no company tradition of data accuracy

o New systems/software implementation causing more confusion

Solution recommendations are presented as follows...

ORGANIZE PROJECT

Results are usually best when there is a bit of a crisis atmosphere established. Business as usual won't usually serve to get serious inventory accuracy problems fixed within two months. Sometimes a humbling blow, such as losing millions in an inventory "write-down", or an unfavorable "write-up" by a customer, is helpful to shatter the status quo and energize an organization to begin work in earnest on a solution. Top level executive action works best to motivate and mobilize people. At a minimum, perception of a costly problem is needed, with some realization of a need to correct it.

Custom Coding Basics And More

Internet has changed the way we read, perceive and understand the world through our computer screens. Even if you are not directly affected by something like custom coding, you should be conversant about it. It is better to know about coding for website design layout, search options for beginning an online business or to get accustomed with how things work for the more curious intellectuals.

Custom coding is an object oriented PHP coding of high quality. The fusion of supporting tools and product can provide an efficient Content Management System (CMS) platform or custom code for the website.

Writing a customized code for your website can be easy. Code based on the minimum requirements is much prompt when compared to a customized CMS. Added functionality to the website with help of this customized coding is a bonus. Modification of a well written and documented code can be changed easily. The programmed code has the most important features of speed and functionality.

The coding, based on changing technology can be changed quickly. Clear know-how of your website program is possible with custom code only. Different section or pages of website can be given diverse styles with the custom programming method. Accommodating coding format can provide the required layout and even the appearance of the website. Before you start the project, scribbling down points for customized coding proves to be a better option.

• What is your requirement-who will write the code?
• Use of the code for website and hosting conditions.
• Features you need for an efficient site.
• Number of users coming to the website.
• Site maintenance and updating

The applications like Customer Relationship Manager (CRM), data mining and Enterprise Resource Planning (ERP) were more rigid and costly in last decades. As the speed of internet has improved, the users expect quick business online.

Web programming has improved considerably and affordable web development is available to everyone interested in e-commerce. Bill Schrader quoted "almost overnight the internet's gone from a technical wonder to a business must".

Many companies offer to do the daunting task of coding for your website at nominal rates. You need to plan out your requirements and the desired strategy and tools for best PHP application development. Make sure you research properly and then give your project to a company for PHP coding. The web world is very vast to accommodate all businesses and hence we need to capture the attention of our clients for better trade prospects.

JIT Vs JIC

Many manufacturers are realizing the benefits of lean manufacturing within their facilities through application of lean concepts and principles. They understand the importance of eliminating waste and practicing the JIT (Just-in-Time) philosophy. But has the time come where JIT inventory levels should be increased to JIC (Just-In-Case) inventory levels considering the current volatility of the economy? You'll find the answer hidden deep within your supply base.

In a lean manufacturing environment, inventory is considered one of the seven major wastes. It can be defined as any material over and above what is currently required and/or in process. The ideal situation in a JIT environment is piece per process, which equates to one piece delivered, one piece processed and one piece shipped. All inventory held over and above this quantity is regarded as waste. Although this concept may be viewed as the ideal situation, it's not very practical for most, if any, companies.

Due to the impracticality of operating under the ideal situation, inventory is carried. This inventory must be kept to a minimum to avoid excess storage requirements, carrying costs, increased material handling and risk of obsolescence, among other things. Realistically, just about every company will have to carry inventory. This inventory may be kept as sub-assemblies, finished goods and/or raw components. The finished goods and internal sub-assemblies are not the major areas of concern. These inventory levels are within your control and should be set based on the level of customer service and on-time delivery you wish to provide your customer. The real concern lies within your raw component inventory levels. This is where your highest risk resides for potentially missing customer shipments, or worse yet, shutting down your customer.

In the past few months, many small companies (as well as some larger ones) have been forced to close their doors for good. If you've been a victim to this type of situation you probably understand the need for JIC inventory, as you've felt the effect a primary supplier shutdown can have on your delivery performance. Or maybe it was a secondary or tertiary supplier that caused you to shut down? Either way, the ultimate effect could be devastating to your business. If you haven't done so yet, it's time to take a look at your inventory strategy and review your just-in-time levels.

In order to understand the greatest area of concern or highest risk potential in your company, consider the following questions; how well do you know your first, second and third tier suppliers? Are any of them at risk of closing their doors and catching you off guard? Have you looked at their financial health lately? Maybe it's time you get to know them a little better. A small ripple in an upstream process can have a major effect downstream. For example, a tier three supplier that provides heat-treating for your bolt supplier can cause major disruptions down the pipeline if they go out of business unexpectedly and there are no other heat-treating companies in the vicinity. In this case, it might be a good idea to carry a few weeks inventory (or as much stock as it may take for you to recover from a critical situation) of this small, relatively inexpensive part, to protect yourself until you get a chance to evaluate your risk potential with this supplier. You will need to dig deep into your supply base, deeper than your primary suppliers, to understand how solid their foundation is. A small investment made on a visit to a supplier or sub-supplier could help you avoid much higher future costs due to shutting down a customer.

Start by reviewing some of your more vulnerable suppliers. If you are in the automotive industry, start by checking the financial health and stability of suppliers that you share with North American automakers. Many suppliers that rely on these O.E.M.'s for their bread and butter may soon find themselves looking elsewhere for business if they haven't already. Once you've chosen your starting point, you need to determine how much JIC inventory you should carry.

In order to determine how much to carry and what inventory to focus on, ask yourself these questions; how difficult is it to find replacement parts? How long does it take to get customer approval to move tooling? How much testing is required if a new supplier is needed in an emergency situation? How long can you delay shipping before it affects your customer relations? How much space will be required to carry enough stock in case of emergency? These questions should start to take you down the path towards determining your on-hand inventory levels. Your planning strategy and rules should also help determine which components are at the greatest risk based on lead-time and commodity type.

If you are going to carry JIC inventory, you will want to carry it on small, inexpensive parts, but they may not be the parts that hold the highest risk. A shelf item may not be of great concern if another company down the road is selling the same part, so consider that fact when you develop your own risk potential chart and focus on your most critical suppliers first. Allow yourself enough time to react to moving a tool, or some equipment, to a new supplier.

Remember, this is a temporary solution to a temporary problem and I strongly encourage you to address this as quickly as possible. It would be extremely expensive to carry JIC inventory for every part, so the decision needs to be made as to which parts are the most critical. Your carrying costs may increase in the short term so consider this like an insurance policy; nobody wants to pay for it but they sure are glad they did when it comes time to cash in on it. I am a huge advocate of lean manufacturing and the JIT philosophy so the sooner you understand the situation of your supply base and get back to JIT, the better.

The ERP Market 2001 And Beyond – Part 2: Vendor Reactions

Enterprise resource planning (ERP) integrated software solutions have become synonymous with competitiveness, particularly throughout the 1990's. ERP systems replace "islands of information" with a single, packaged software solution that integrates all traditional enterprise management functions (transactions) like financials, human resources/payroll, and manufacturing & logistics (See Essential ERP - Its Functional Scope for more details). We also believe that having an ERP system is a prerequisite in most business environments to fully take advantage of the latest business information processing trends, such as collaborative e-Business and customer relationship management (CRM).

For a list of the major ERP vendors and their market share, see Figure 1.

Figure 1.

This is Part Two of a five-part article. This part discusses the vendors' reaction to market changes. Part One contains an overview of the ERP market and how ERP is expanding to included SCM, CRM, and e-procurement. Part Three will briefly analyze some of the major ERP vendors. Part Four will contain market predictions. Part Five will contain recommendations for the vendors and users. Part Five will contain links to the preceding parts.

How Are Vendors Reacting?

On the other hand, in the ERP market, the major vendors focused on the high-end of the market have virtually evolved into providers of comprehensive e-Business suites (see Where Is ERP Headed (Or Better, Where Should It Be Headed)? Part 3: E-Business and Mid-Market Shakeout). They also compete with a slew of smaller extended ERP vendors for the market for small to medium enterprises (SMEs). While the heyday of the ERP market in the mid 90s may have postponed the consolidation in the lower tiers of the market, it is, however, not the case today. The acquisitions mentioned in Part One reflect the morphing enterprise applications landscape as vendors scramble to outrival competition or, more often, survive during the next phase of e-Business.

While at the high end of the market, vendors of enterprise applications suites face fierce competition from CRM, SCM, B2B exchange providers and other niche players, in the mid-market, a more conventional consolidation has been taking place, mainly with an aim of combining the resources to deliver extended enterprise software suites that meet the 'one-stop shop' requirements of smaller companies.

ERP Pricing Options

ERP systems have earned the general perception of being exorbitantly expensive to license and implement (see ERP Trivia - Every Why Should Have Its Wherefore), and vendors have recently been trying to change that infamous image with new pricing options in order to keep users' costs down. Users typically pay an up-front per-user (either concurrent, role-based, or named) license fee and an annual maintenance charge to use ERP systems (typically 12%-20% of the license fee). The per-seat price for ERP varies greatly depending on the number of users, the number of modules to be deployed and what "bells and whistles" are added, and whether the company belongs to the high-end Tier 1 (Fortune 500) or the small-to-medium enterprises - SMEs (Tier 2 and 3) market segment.

The per-user price range has been from $1,000 to $6,000 (typically higher values for larger companies), with the continual price decline trend owing to fierce competition and the reduced or postponed demand for software. Many vendors offer per-month per-user rental or outsourcing deals as an alternative to traditional up-front licenses (for more information, see Where Is ERP Headed (Or Better, Where Should It Be Headed)? Part 4: ASP's and New Pricing Models). Fixed price, preinstalled, pre-configured ERP is also available and is particularly attractive for the lower-end of market (see Fast-path Implementations - Are They Good or Bad?).

Competitive Changes

Sales cycles vary from months to years depending on the company size, its organizational structure (single or multi-site, international or not), and the functional scope of the project. While the selection phase of software acquisitions will increasingly gain critical importance (due to customers' increased awareness of possibly fatal consequences from selecting the wrong software), the pressure for faster decision-making will mount both from vendors (who want shorter and less fluctuating sales cycles) and users (in order to stay ahead of their competitors). As a rule, every $1 of ERP software sales drives on average another $3-$6 of additional hardware, third party integration and consulting, and resellers revenue, although in some cases additional costs can reach $10-15 for each dollar spent on software.

Early ERP adopters discovered to their dismay that implementing these systems was only the first step toward creating a competitive information technology infrastructure. They and new users alike are now looking for significantly more comprehensive functionality - from advanced planning and scheduling (APS) and manufacturing execution systems (MES), to sales force automation (SFA) and collaborative business-to-business (B2B) e-commerce tools - and demanding that they be integrated into their ERP backbone. Consequently, during the last few years, the functional perimeter of ERP systems began an expansion into its adjacent markets, such as supply chain management (SCM), customer relationship management (CRM), professional services automation (PSA), product data management (PDM), manufacturing executions systems (MES), business intelligence (BI)/data warehousing (DW), and e-Business (see Where Is ERP Headed (Or Better, Where Should It Be Headed)? Part 1: Functional Scope and Vertical Focus).

Faced with competitive inadequacies, the major ERP vendors have been vigorously busy developing, acquiring, or bundling new functionality so that their packages go beyond the traditional realms of finance, materials planning & management, and human resources. While most traditional ERP software enables the integration and management of critical data within enterprises, companies have increasingly recognized the need to deploy more advanced software systems that manage the global supply chain by enhancing the flow of information to and from customers, suppliers and other business partners outside the enterprise.

A typical ERP system now offers broad functional coverage nearing the best-of-breed capabilities; vertical industry extensions; a robust technical architecture; training, documentation, implementation and process design tools; product enhancements; global support and an extensive list of software, services and technology partners. While it is not a system-in-a-box yet, the gap between its desired and actual features is becoming smaller every day. Consequently, we believe that the above outlined trends in the ERP market are the direct consequence of vendors' attempts to:

1. Resolve current ERP functional and/or technological deficiencies,

2. Expand software sales both within their existing and potential customer bases, particularly in the lower-end of the market, by allaying the ERP complexity and costs perceptions, and/or

3. Harness the Internet, which has been reshaping the enterprise applications market by making possible unprecedented visibility and information sharing both within an enterprise and between business partners.




SOURCE:
http://www.technologyevaluation.com/research/articles/the-erp-market-2001-and-beyond-part-2-vendor-reactions-16486/

Can You Add New Life To an Old ERP System?

Recently, TEC featured an article by Olin Thompson titled, "The 'Old ERP' Dilemma: Replace or Add-on" which discussed options available to companies who want to add business functionality to their "Old ERP" systems. Certainly, there are many options now available in new business functionality that run the gamut from Supply Chain Planning (SCP) to Customer Relationship Management (CRM). The pros and cons of replacing or adding on to your existing ERP system were set forward in Thompson's article. But before you look to new ERP functionality, you should see if you are getting the full benefit out of your existing system. If not, are there ways to add new life to your current ERP system without going into an extensive development project.

Whether you have an old or new ERP system you have probably learned that to maximize its value, you have to work hard at getting information from the ERP system to key users. According to Thompson, " the data checks in, but the information can't check out of many ERP systems". You also may be finding that as e-business strategies are emerging in your supply chains, you could need access to more externally generated information than your ERP system, in its current configuration, can handle. For an Information Technology manager, both situations are problematic. Many companies should take another look at data warehousing before deciding that what to do with the "old ERP" system.


*In Memoriam

Does Data Warehousing Really Work?

Bob Cramer, Director of IT for Appleton WI based Anchor Food Products has found that, " lots of the pain we have with our old ERP system is based on users not having access to information. We see data warehousing addressing most of the problems our users have with the old ERP system". Today, most reporting from older ERP systems is directly from the ERP transaction processing (OLTP) system. Typically, users take ERP transactional data and input it to an Access database or a spreadsheet to generate the reports they need to make business decisions. From a user perspective, the extraction and re-inputting of information is both time consuming and potentially error prone. From an IT perspective there are no opportunities to build in validation checks to ensure that the information is either reliable or the most current available.

Data warehousing provides another way of getting information from legacy systems. Many companies have found it necessary to "build around" their ERP system to some extent. For example, Advanced Planning and Scheduling (APS) systems have often been added after the ERP installation. Companies find that they can report from either their ERP or their APS systems, but have difficulty combining data from both systems without having to create new databases or spreadsheets. Once the data is extracted from the systems, it is very difficult to ensure its integrity. James F. Dowling pointed out in the TEC article, "Business Basics: Unscrubbed Data is Poisonous Data" data should be managed as a corporate asset that appreciates in value over time. Historical data must be addressed with as much care as current database content".

The Data Warehousing alternative uses a better approach. It "packages" the information in data cubes that are customized for each group of users. Once the information is packaged in a data cube, users can extract the information using an On Line Analytical Processing (OLAP) tool. Today, OLAP tools are available as client-server applications or can be operated from a Web browser.

The data warehouse also can include information that is not in your ERP system. By adding information from outside the ERP system, IT can provide users access to ALL the transaction information that the company collects as well as whatever information they might want to collect from OUTSIDE the company. This is a significant difference and a potentially powerful advantage. Pat Clifford, Director of Business Consulting at the Boise ID agri-business giant the J. R. Simplot Company, found after installing a data warehouse comprised of company information from their ERP and several legacy systems, " it not only gave more information to our employees, but allowed them to move from just reading reports to performing managerial analysis."

What is the Best Way to Integrate Your Old ERP with Data Warehousing?

There are two basic strategies that can be used to start a data warehousing project. For certain ERP systems third party providers have developed 'off the shelf" data warehousing solutions that are pre-built to the fit the features of your ERP system. If you have an old ERP system that is supported by a data warehousing "solution", you should seriously consider this option. Data warehouse solution products are usually based on the ERP modules you have installed. You can roll out the data warehouse to one module at a time making it easier for IT to manage. One major advantage of using a data warehousing solution is that it can be done in a significantly shorter timeframe than if you have to buy an entire data warehousing tool set.

If your old ERP system is not supported by a data warehousing solution product, you will need to "build your own" using a tool set provided by a data warehousing vendor. At Simplot, Clifford found there were advantages in defining the project by functional areas instead of trying to create one big project: "Different functional areas look at information in different ways, so it's important to work with each group as you build the data warehouse". The advantage of a data warehousing tool set is that it gives you total control over what kind of information you want to present to your users. The disadvantage is that it will take more time and internal resources to implement.


SOURCE:
http://www.technologyevaluation.com/research/articles/can-you-add-new-life-to-an-old-erp-system-16444/

Chemical Industry ERP Showdown: Infor vs. JD Edwards vs. Lawson vs. SAP vs. SSI

Five vendors were selected for the evaluation: Infor ERP LX, JD Edwards EnterpriseOne, Lawson M3 for Process Manufacturing, SAP's mySAP ERP, and SSI's TROPOS. All the results presented here were determined by TEC's eBestMatch decision support system, based on the latest request for information (RFI) supplied to us by the five vendors.

The priorities assigned to the various modules and submodules were selected by the client. (This is different from Showdowns we've run in the past, where all the priorities were set evenly.)

The chart below indicates how priorities were assigned across the main ERP modules:

Distribution of priorities by main ERP modules

As the chart above indicates, the client gave Process Manufacturing Management the highest priority, at 25%, followed by Inventory, Purchasing, and Sales Management, all at 15%. Financials, Quality Management, Human Resources, and Product Technology were given the lowest priorities.

In the chart below, you can see how the priorities were assigned within the client's key module of interest, Process Manufacturing Management.

Distribution of priorities within the Process Manufacturing Module

The two most important submodules within Process Manufacturing Management, as indicated above, were Formulas/Recipes, with a 28% priority, followed by Material Management at 17%.

Results

How, then, did the vendors rank? The overall results (factoring in all the modules) are shown in the chart below.

Overall Vendor Rankings

As this chart indicates, Lawson M3 for Process Manufacturing scored highest overall, followed by mySAP, Infor ERP LX, and JD Edwards EnterpriseONE—all closely grouped together—with TROPOS finishing last.

Below are the results within the Process Manufacturing Management module.

Vendor rankings — Process Manufacturing Management

Again, Lawson placed first. But Infor LX moved up to second place, displacing mySAP ERP. TROPOS came in third, moving up considerably from last place in the overall rankings. Slipping to fourth place was mySAP, with JD Edwards placing last.

Conclusion

Of the five vendors, Lawson was the most consistent performer. But as we've seen in this Showdown, rankings can change when different areas of functionality are looked at.

For example, although Lawson placed first overall and in the Process Manufacturing Management module, the vendor slips to third place in Human Resources, behind both Infor and mySAP (see chart below). And, as we saw in the chart above, with the exception of Lawson, all the vendors shifted rankings when the focus was changed from overall results to the Process Manufacturing Management module.

Vendor rankings — Human Resources

Given that the rankings can shift depending on what functional areas you look at and the priority you assign to them, how, then, can you determine which ERP solutions are best suited for your particular business needs?

The fastest, simplest way is to use TEC's ERP Evaluation Center.

TEC's ERP Evaluation Center allows you to set priorities that reflect your organization's business model and special needs, at every level of functionality. At the modular and submodular levels—even down to the individual criteria—you can tell the system which business processes are critical, important, or not important to your organization. The system then compares your priorities against the vendor responses to produce a shortlist of solutions. You get a custom comparison—one that ranks vendor solutions on how well each vendor's functionality matches the business requirements of your organization.

It's the best way we know of to evaluate ERP solutions, and we invite you to give it a run-through. Simply click on the link below to visit our ERP Evaluation Center, and conduct your fast, free custom ERP comparison. After all, there's no other organization quite like yours.


SOURCE:
http://www.technologyevaluation.com/research/articles/chemical-industry-erp-showdown-infor-vs.-jd-edwards-vs.-lawson-vs.-sap-vs.-ssi-19265/

Business Software Firms Sued Over Implementation - Lawsuits Bring ERP Problems to Light

This grim list includes Hershey Foods, Whirlpool, Allied Waste Industries, and the maker of Gore-Tex, W.L. Gore & Associates. Other stories of troubled enterprise resource planning (ERP) software implementations are also leaking out from additional companies, colleges and universities across the country. Some companies are even turning to lawsuits, alleging the software doesn't work and pointing a finger at the ERP software makers and consultants who install the systems intended to automate their accounting, order entry, and manufacturing processes. However, many analysts say that when huge software projects go wrong, it is often the buyer's fault, particularly when companies fail to understand the scope of the project or spend the time and money necessary to move from an old computer system to a new one.

Market Impact

We believe that this is only the tip of the iceberg. It is an open secret that a large number of ERP implementations do not live up to their expectations. As a matter of fact, a number of consulting practices are not only surviving these bleak days of ERP market downturn, but also making a very lucrative business by utilizing their ERP consultants in projects aimed at resolving major post-implementation "blues". The idea is the same, although each renowned consulting firm will sell their "unique" methodology disguised under the names like "Enterprise Effectiveness", "Second Wave" and "Continuous Improvement".

We believe this bad news will have greater market consequences for both the ERP vendors and consulting firms then one would initially imagine. The news will make it much more difficult for big ERP vendors to make inroads into the much coveted mid-market territory, where the prospective clients are forced to be cost conscious. Moreover, some mid-market ERP players go so far in their sales campaigns as to offer 50% of the software license payment deferral until successful project signoff.


SOURCE:
http://www.technologyevaluation.com/research/articles/business-software-firms-sued-over-implementation---lawsuits-bring-erp-problems-to-light-15551/

ERP Showdown—Round 2! Exact Macola ES vs. Infor SyteLine vs. QAD MFG/PRO

Results

As you can see above, straight "out of the box," Infor SyteLine ranked first overall, with Exact Macola ES coming in second, and QAD MFG/PRO placing third. Overall scores are based on the average level of support the vendors offer across the entire ERP spectrum.

As the chart below shows, Infor finished first in five of the eight modules, QAD finished first in two of the modules, and Exact Software finished first in one module.

However, as with most aspects of enterprise software, it's not that simple or clear-cut.

Rankings, either overall or by module, do not tell you everything you need to know. What they do provide is a basic, high-level view of vendors' general strengths and weaknesses right out of the box. However, the fact is, few businesses, if any, can use an ERP solution straight out of the box. Businesses have special needs and priorities that need to be supported by any ERP solution they use.

For example, your business may require an especially robust human resources (HR) functionality. Even though Infor finished first overall, Exact ranked first in HR by a significant margin, and may therefore be a better choice for your organization. You'll notice that QAD has a low score for the HR module, because the vendor does not offer HR functionality in its discrete ERP solution. In other words, it would be provided by a third party. Accordingly, if you want a separate best-of-breed HR solution that integrates into your ERP system, QAD may represent the best choice.

The same applies within individual modules, where the top-ranking vendor may not necessarily be the right one for your organization's needs. Although Infor was first overall in manufacturing management, QAD was strongest in field service and repairs, as shown in the chart below. If field service and repairs is a critical area in your organization's business model, QAD may be a better choice than Infor (the overall winner), or Exact (the overall second place finisher).


Conclusion

Given that out-of-the-box rankings rarely, if ever, reflect the real-world needs of an organization, and that rankings can shift depending on what area of functionality you look at, how do you determine which ERP solution is best suited for your business?

The fastest, simplest way is to do what we did to produce the results you see here: use TEC's ERP Evaluation Center. (We got our results in twenty minutes—as opposed to weeks or even months of struggling with huge Excel spreadsheets.)

TEC's ERP Evaluation Center allows you to set priorities that reflect your organization's business model and special needs at every level of functionality. At the modular and submodular levels, even down to the individual criteria, you can tell the system which business processes are critical, important, or not important to your organization. The system then compares your priorities against the vendor responses to produce a shortlist of solutions. You get a custom comparison—one that ranks vendor solutions not on out-of-the-box functionality, but rather on how well that functionality matches your business requirements.

It's the best way we know of to evaluate ERP solutions, and we invite you to give it a run-through. Simply click on the link below to visit our ERP Evaluation Center and conduct your fast, free custom ERP comparison. After all, there's no other organization quite like yours.

SOURCE:
http://www.technologyevaluation.com/research/articles/erp-showdown-round-2-exact-macola-es-vs.-infor-syteline-vs.-qad-mfg%2Fpro-18947/

Welcome to ERP Showdown: Infor ERP LN 6.1 vs. Epicor Vantage vs. Lawson M3 Discrete Manufacturing Solutions

Introduction

With enterprise resource planning (ERP) systems being the information backbone of the organization, we decided to take a closer look at three of the more popular discrete ERP solutions for the mid-market. Using TEC's ERP Evaluation Center, we compared Infor ERP LN 6.1, Epicor Vantage, and Lawson M3 Discrete Manufacturing Solutions head-to-head, based on the most recent data supplied to us by the three vendors.

We looked at eight standard ERP modules. To eliminate any chance of bias, and to ensure a level playing field, all 3,600 criteria that make up the modules and submodules in our ERP Evaluation Center were given equal weight and priority. In other words, no area of functionality was treated as being more important than any other.

The chart below shows the overall rankings.

Results

As you can see above, straight out of the box, Infor ERP LN 6.1 ranked first overall, with Lawson M3 Discrete Manufacturing Solutions coming in second, and Epicor Vantage placing third. (Overall scores were based on the average level of support the vendor offers across the entire ERP spectrum.)

As the chart below shows, Infor finished first in five of the eight modules (although by some fairly small margins in a few cases), with Lawson finishing first in three modules (two of which were extremely close), and Epicor failing to finish first in any of the eight modules.

As you can also see in the chart below, there’s an especially wide range of results in Human Resources. Infor ERP LN 6.1 is the only one of the three solutions that currently provides full HR functionality. Epicor Vantage requires third-party functionality, while Lawson M3 plans to offer full HR functionality in future releases. (It should be noted that clients do not always require an HR component in a new ERP system, as many prefer to retain their existing HR solution or add on a third-party solution.)

However, as with most aspects of enterprise software, it's not that simple or clear-cut.

Rankings, either overall or by module, do not tell you everything you need to know. What they do provide is a basic, high-level view of vendors' general strengths and weaknesses right out of the box. However, the fact is, few businesses, if any, can use an ERP solution right out of the box. Businesses have special needs and priorities that need to be supported by any ERP solution they use.

For example, if your business requires an especially robust quality management functionality, even though Infor finished first overall, Lawson scored higher in the Quality Management module, and may therefore be a better choice for your organization.

The same applies within individual modules, where the top-ranking vendor may not necessarily be the right one for your organization's needs. Although Infor placed first overall and in Product Technology, the chart below shows Lawson as stronger in both the Reporting and Workflow and Document Management submodules. If either of these functional areas is key to your organization's business model, Lawson may be a better choice than Infor.

Conclusion

Given that 'out of the box' rankings rarely, if ever, reflect the real-world needs of an organization, and that the rankings can shift depending on what area(s) of functionality you look at, how then do you determine which ERP solution is best suited for your business?

The fastest, simplest way is to do what we did to produce the results you see here: use TEC's ERP Evaluation Center. We got our results in less than 20 minutes, versus weeks—or even months—of struggling with huge Excel spreadsheets.

TEC's ERP Evaluation Center allows you to set priorities that reflect your organization's business model and special needs at every level of functionality. At the modular and submodular levels—even down to the individual criteria—you can tell the system which business processes are critical, important, or not important to your organization. The system then compares your priorities against the vendor responses to produce a shortlist of solutions. You get a custom comparison—one that ranks vendor solutions not on out-of-the-box functionality, but rather on how well that functionality matches the business requirements of your organization.


SOURCE:
http://www.technologyevaluation.com/research/articles/welcome-to-erp-showdown-infor-erp-ln-6.1-vs.-epicor-vantage-vs.-lawson-m3-discrete-manufacturing-solutions-19338/

Will That Wretched ERP Finally Die? Possibly, But Only the Acronym

"The traditional ERP model is dead and collaborative commerce (c-commerce) is emerging to take its place." This was yet another ERP demise prediction, this time given by a speaker at a symposium in Europe at the beginning of April, which was hosted by a leading research house. He went on to predict that Customer Relationship Management (CRM) and Supply Chain Management (SCM) would become as important as ERP in the electronic economy by 2004. A prediction was given that ERP systems will only host 40 percent of business applications by 2004 due in part to the rise of collaborative commerce, or c-commerce.

With traditional ERP systems, attention is placed on internal productivity. What will happen to alter that model is the emergence of a more diverse enterprise framework. From now until 2004, a more dynamic online marketplace will emerge, where companies can collaborate with employees, customers, stockholders, sales channels and suppliers through a multi-enterprise framework. It was also predicted that due to a more dynamic marketplace, ERP vendors would have to focus on either 1) creating functionally stronger ERP components or 2) creating functional c-commerce frameworks.

Market Impact

There is nothing new in these statements that the market has not already been aware of. The currently infamous 'ERP' acronym may face extinction, but not its basic concept. All of the major ERP vendors realized the need to shift from an internal to an external focus a long time ago. Over the last few years, the main players have been actively partnering or finding other ways to provide solutions that allow businesses to collaborate more effectively. Also, the vast majority of vendors have recently stopped using the term ERP in their marketing campaigns, or have at least been downplaying it. Part of the reason for doing this lies in their attempts not to be branded as outdated by market requirements.

However, the real reason lies in the fact that the boundaries between ERP, CRM, e-commerce and SCM are blurred so much that this attempt to functionally separate them becomes pointless. If the ultimate objective is to win and retain customers, one must consider the entire chain, which includes traditional ERP and SCM functions as well as the more remarkable and supposedly more relevant CRM and e-commerce activity.

The cycle begins with the attraction of the customer through sales and marketing. This hopefully results in an order management and fulfillment process and ends with a customer service, which can involve anything from field installations through to enquiry and complaint management. All of these steps have to be executed well without exception. Otherwise, the customer will end up on a competitor's list of customers.

Therefore, the relative importance of CRM vs. ERP, ERP vs. SCM or of any other match-up is irrelevant. All of these functional areas are critical, except for some esoteric or autistic businesses. The 64,000-dollar question is how all business processes work together. In the electronic world, the degree of flexibility and efficiency of processes relating to the customer lifecycle, product development, and so on, to name but a few, will be a big determinant of losers and winners. Therefore, while the traditional introspective mind-set of ERP becomes history, its functionality remains critical. The 'new economy' will not cause the obsolescence of general ledger and accounts payable & receivable for example. Quite the contrary, it may only emphasize their importance.


SOURCE:
http://www.technologyevaluation.com/research/articles/will-that-wretched-erp-finally-die-possibly-but-only-the-acronym-15710/

Can You Add New Life To an Old ERP System?

Recently, TEC featured an article by Olin Thompson titled, "The 'Old ERP' Dilemma: Replace or Add-on" which discussed options available to companies who want to add business functionality to their "Old ERP" systems. Certainly, there are many options now available in new business functionality that run the gamut from Supply Chain Planning (SCP) to Customer Relationship Management (CRM). The pros and cons of replacing or adding on to your existing ERP system were set forward in Thompson's article. But before you look to new ERP functionality, you should see if you are getting the full benefit out of your existing system. If not, are there ways to add new life to your current ERP system without going into an extensive development project.

Whether you have an old or new ERP system you have probably learned that to maximize its value, you have to work hard at getting information from the ERP system to key users. According to Thompson, " the data checks in, but the information can't check out of many ERP systems". You also may be finding that as e-business strategies are emerging in your supply chains, you could need access to more externally generated information than your ERP system, in its current configuration, can handle. For an Information Technology manager, both situations are problematic. Many companies should take another look at data warehousing before deciding that what to do with the "old ERP" system.


*In Memoriam

Does Data Warehousing Really Work?

Bob Cramer, Director of IT for Appleton WI based Anchor Food Products has found that, " lots of the pain we have with our old ERP system is based on users not having access to information. We see data warehousing addressing most of the problems our users have with the old ERP system". Today, most reporting from older ERP systems is directly from the ERP transaction processing (OLTP) system. Typically, users take ERP transactional data and input it to an Access database or a spreadsheet to generate the reports they need to make business decisions. From a user perspective, the extraction and re-inputting of information is both time consuming and potentially error prone. From an IT perspective there are no opportunities to build in validation checks to ensure that the information is either reliable or the most current available.

Data warehousing provides another way of getting information from legacy systems. Many companies have found it necessary to "build around" their ERP system to some extent. For example, Advanced Planning and Scheduling (APS) systems have often been added after the ERP installation. Companies find that they can report from either their ERP or their APS systems, but have difficulty combining data from both systems without having to create new databases or spreadsheets. Once the data is extracted from the systems, it is very difficult to ensure its integrity. James F. Dowling pointed out in the TEC article, "Business Basics: Unscrubbed Data is Poisonous Data" data should be managed as a corporate asset that appreciates in value over time. Historical data must be addressed with as much care as current database content".

The Data Warehousing alternative uses a better approach. It "packages" the information in data cubes that are customized for each group of users. Once the information is packaged in a data cube, users can extract the information using an On Line Analytical Processing (OLAP) tool. Today, OLAP tools are available as client-server applications or can be operated from a Web browser.

The data warehouse also can include information that is not in your ERP system. By adding information from outside the ERP system, IT can provide users access to ALL the transaction information that the company collects as well as whatever information they might want to collect from OUTSIDE the company. This is a significant difference and a potentially powerful advantage. Pat Clifford, Director of Business Consulting at the Boise ID agri-business giant the J. R. Simplot Company, found after installing a data warehouse comprised of company information from their ERP and several legacy systems, " it not only gave more information to our employees, but allowed them to move from just reading reports to performing managerial analysis."

What is the Best Way to Integrate Your Old ERP with Data Warehousing?

There are two basic strategies that can be used to start a data warehousing project. For certain ERP systems third party providers have developed 'off the shelf" data warehousing solutions that are pre-built to the fit the features of your ERP system. If you have an old ERP system that is supported by a data warehousing "solution", you should seriously consider this option. Data warehouse solution products are usually based on the ERP modules you have installed. You can roll out the data warehouse to one module at a time making it easier for IT to manage. One major advantage of using a data warehousing solution is that it can be done in a significantly shorter timeframe than if you have to buy an entire data warehousing tool set.

If your old ERP system is not supported by a data warehousing solution product, you will need to "build your own" using a tool set provided by a data warehousing vendor. At Simplot, Clifford found there were advantages in defining the project by functional areas instead of trying to create one big project: "Different functional areas look at information in different ways, so it's important to work with each group as you build the data warehouse". The advantage of a data warehousing tool set is that it gives you total control over what kind of information you want to present to your users. The disadvantage is that it will take more time and internal resources to implement.


SOURCE:
http://www.technologyevaluation.com/research/articles/can-you-add-new-life-to-an-old-erp-system-16444/

ERP Getting a New Breath of Fresh Air in Europe

According to silicon.com, a leading European IT TV News Service, European companies began to realize the importance of customer oriented ERP applications and are set to dramatically increase their investment in related projects over the next two years. A report commissioned by Oracle and enterprise systems provider Bull claims European companies will increase ERP projects by 50 per cent, double the volume of business intelligence (BI) and data warehousing (DW) projects and treble the use of CRM applications in the next two years. Two out of three companies surveyed regarded integration of established ERP systems with new CRM solutions as a crucial business strategy. The survey, conducted by IDC, was based on the IT strategies of 1,000 enterprises throughout Europe.

According to Peter Reed, marketing manager for enterprise solutions at Bull, the drive towards customer focused applications is accelerating now as e-commerce takes off and as company resources are freed from developing Y2K solutions. He said while the results of the report were positive, it highlighted a worrying trend of European companies embracing CRM applications as a cost reduction exercise rather than copying the US trend of using it as a method of customer acquisition.

Market Impact

This is a confirmation of a trend we have long noticed in the global market rather than any kind of a surprise. All major business applications players realized the need to shift from an internal to an external focus some time ago, particularly after feeling the Y2K-induced pinch. Over the last few years, the main players have been actively developing internally or partnering in order to provide solutions that allow businesses to collaborate more effectively. Also, while the vast majority of vendors have distanced themselves from using the unpopular, outdated term ERP in their marketing campaigns, at the same time, they have tacitly been enhancing their traditional back office functionality and/or providing hooks to external 'killer' e-business applications.

The real reason for this lies in the fact that the boundaries between ERP, CRM, e-commerce, BI and Supply Chain Management (SCM) have been blurred. If the ultimate objective is to win and retain customers, one must consider the entire chain, which includes traditional ERP and SCM functions as well as the more remarkable CRM and e-commerce activity, with the inevitable need for extrapolating useful information for all management levels by using BI.

The ERP system remains the backbone of the supply chain. It sets the structure a company needs to do business and to communicate with other businesses. The combination of ERP, supply chains, and the Internet, or collaborative commerce, is an integration designed to offer faster and easier access to business transactions as well as customer and supplier data. This combination does not mean ERP systems become obsolete over night. While the traditional introverted mind-set of ERP becomes history, its functionality remains critical. The 'new economy' will not cause the obsolescence of general ledger and accounts payable & receivable for example. On the contrary, it may only emphasize the importance of their efficient use. Integration and interconnectivity are therefore the name of the game in the future.

We also concur with the above-mentioned opinion that implementing CRM and e-commerce only for cost cutting and process streamlining is a rather myopic strategic move. The much stronger demand for extended-ERP components than for a core ERP system are also not unexpected, mainly due to a large ERP market penetration and saturation compared to other much more recent markets.


SOURCE:
http://www.technologyevaluation.com/research/articles/erp-getting-a-new-breath-of-fresh-air-in-europe-16008/

ERP Showdown: Deltek Costpoint vs. Microsoft Dynamics AX vs. Oracle E-Business Suite

Introduction
More and more discrete enterprise resource planning (ERP) solutions are entering the marketplace these days. So we thought we'd shed some light on three of the most popular solutions for medium-sized businesses in the $25 million - $250 million (USD) range. Using TEC's ERP Evaluation Center, we compared Deltek Costpoint, Microsoft Dynamics AX, and Oracle E-Business Suite head-to-head, based on the most recent data supplied to us by the three vendors.
We looked at eight standard ERP modules. To eliminate any chance of bias, and to ensure a level playing field, all 3,600 criteria that make up the modules and submodules in our ERP Evaluation Center were given equal weight and priority. In other words, no area of functionality was treated as being more important than any other.

The chart below shows the overall rankings.

Results

As you can see above, straight out of the box', Oracle E-Business Suite ranked first overall, with Deltek Costpoint coming in second, and Microsoft Dynamics AX placing third.(Overall scores were based on the average level of support the vendor offers across the entire ERP spectrum.)

As the chart below shows, Oracle finished first in six of the eight modules, with Deltek and Microsoft finishing first in one module each

However, as with most aspects of enterprise software, it's not that simple or clear-cut.

Rankings, either overall or by module, do not tell you everything you need to know. What they do provide is a basic, high-level view of vendors' general strengths and weaknesses right out of the box'. However, the fact is, few businesses, if any, can use an ERP solution right out of the box'. Businesses have special needs and priorities that need to be supported by any ERP solution they use.

For example, if your business requires an especially robust HR functionality, even though Oracle E-business finished first overall, Microsoft Dynamics AX ranked first in the HR area, and may therefore be a better choice for your organization than Oracle.

The same applies within individual modules, where the top ranking vendor may not necessarily be the right one for your organization's needs. Although Deltek was first overall in Purchasing Management, Microsoft was stronger in pricing, as shown in the chart below. If pricing is a critical area in your organization's business model, Microsoft may be a better choice than Deltek (the Purchasing Management winner), or even Oracle (the overall winner)

SOURCE:

http://www.technologyevaluation.com/research/articles/erp-showdown-deltek-costpoint-vs.-microsoft-dynamics-ax-vs.-oracle-e-business-suite-18915/