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Why change to industry specific ERP

Written by CyFrame

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Executive overview

If your critical business data resides in different business systems or spreadsheets and your everyday processes are not disciplined, your business lacks the agility to respond to change. These changes can range from an increase in demand because of a customer’s shortened delivery time or several new large orders, to a geographic expansion of your supply chain with global reaches, to changes in trends that require new product introductions. As a result, your management team is forced into a perpetual state of reaction to minimize the impact of these changes.

A flexible Industry Specific ERP system can be the foundation for a complete overhaul of your business processes and enable the agility you need to accommodate virtually any type of change—quickly, easily, and cost-efficiently. A flexible Industry Specific ERP system provides two key capabilities and benefits:

  • Linking your disparate systems and automating the movement of information throughout your business provide executives in your management chain with visibility into real-time business data, enabling the best decision-making possible.
  • Creating highly disciplined workflows provides the process consistency required to enable highly dependable outcomes, regardless of what type of change may occur in your business.

Your current process can make “Change” a dirty word

If your business data resides in separate systems, you depend on people to manually create the necessary bridges between those systems in order to manage your business. Sales managers, plant managers, VPs of operations and finance, and supply chain executives are forced to trade spreadsheets and manually manipulate data to forecast sales, respond to proposals, manage inventory and production schedules, and determine product pricing.

While these manual processes may seem to serve your business well today, in reality, there are multiple issues that are likely impacting your margins, your profitability, and your ability to handle change and respond to competitive pressures.

Reduced productivity for your most valuable knowledge workers—manually collecting, entering, and analyzing data adds time to your business processes, expanding instead of contracting cycle times. Manual processes result in longer times to respond to requests for proposals, forecast sales, and ultimately deliver product, affecting everything from margins to cash flow.

Data inaccuracies—When data is manually manipulated outside your system and moved within and between divisions, data entry errors are inevitable. For example, an error in sales and inventory projections can result in a costly out-of-stock condition that brings the production line to an unplanned halt, affecting the ability to meet delivery deadlines.

Lack of timely data—By the time data has been compiled into meaningful reports to support critical decision-making, the information has aged considerably—by days and even weeks. If demand changes more frequently, larger stocking inventories are required to prevent costly out-of-stocks. The result is fewer inventory turns, leading to higher inventory-carrying costs that increase the cost of your products and reduce your margins, impacting your ability to compete.

Inability to handle change—Since data is not readily visible and processes are not clearly defined, it becomes increasingly difficult to respond quickly to any change—from day-to-day issues involving a supplier that is unable to perform as promised, new regulatory requirements, a new manufacturing process, or a move into global markets. Instead of consistent procedures that produce dependable results, your processes are loosely defined by the workers who are responsible for their execution. If there is a lack of consistency in your processes, you are outside the “change loop.”

In a closed supply chain where you have strong established relationships with customers and suppliers that are nearby, you can easily manage high variability. But when customers and suppliers are located across the country or halfway around the globe, variability and limited visibility can rapidly magnify issues. If you cannot respond rapidly enough to change and demand, delivery times may be compromised, impacting customer service, satisfaction, and retention levels.

The end result is that when your business depends on manual processes and disparate systems, you are forced to react to accommodate change, rather than rely on your business processes to manage the change.

The solution: a flexible industry specific erp system for consistency, profitability

A flexible ERP system built for your industry can fortify your operations to best handle change by letting you provide any business division and any employee with the data required to improve decision-making and respond rapidly to virtually any changing condition—regardless of whether data is needed from one or multiple systems. With the right ERP system, you can directly overlay your business processes onto your business systems to provide the timeliness and consistency to manage variability, eliminating the need and high cost of integrating your existing systems. Instead, because the software is made for your industry, you simply define the processes and where the data resides to execute those processes. The result is a cost-effective yet unmatched ability to streamline your operations—and best manage change.

Paper-based manual processes are eliminated. Information flows rapidly throughout your operations the moment it appears in your systems. As a result, every person in your enterprise can act as efficiently and effectively as possible, concentrating on better managing the business based on timely information, rather than wasting time collecting and analyzing aging data.

Finally, manual ad hoc processes are replaced with disciplined processes to achieve peak business flexibility and efficiency. Although the word “discipline” traditionally evokes thoughts of rigidity, disciplined processes are exactly the opposite—they become flexible. Highly disciplined procedures allow one automotive giant to produce multiple models on one assembly line. Visibility into demand in real time enables just-in-time ordering of the right materials, and disciplined processes ensure that the right parts for different vehicles arrive at the right assembly line at the right time. Production-line real estate and staffing requirements are minimized, improving use of these crucial business resources. And the company can easily adapt to changing automotive trends, yet minimize costs, increase margins, and reduce delivery times.

The impact of a flexible erp system on your management team

For sales

“Sales is the engine that drives growth. It is what great companies do best.” – Without a flexible ERP system, the sales executive or manager is placed in a reactive mode of chasing data and spending time pulling data together, instead of spending time improving sales performance. With deployment of a system that enables disciplined and consistent processes, sales executives are free to focus on delivering orders and a reliable forecast, while also servicing customers. Benefits for your Sales Managers with a Flexible Industry Specific ERP are as follows:

  • Improved productivity of sales personnel
  • Faster and more detailed monthly sales reporting
  • Improved pipeline management
  • Reduced administrative labor in order tracking
  • Elimination of order expediting Improved customer service through better order tracking and ability to set and manage to realistic delivery dates
  • Improved shorts and back order process
  • More accurate cost information that leads to better margins and higher win ratios

For production

“Having the discipline for consistent processes is what makes a company successful in manufacturing.” – Disjointed systems require manual data collection and analysis, preventing the VP of operations from accessing the timely data required to make the best decisions. With a flexible ERP system that enables disciplined and consistent processes, operations executives are free to focus on balancing resource allocations, customer service, and cost management. Benefits for Production Managers with a Flexible Industry Specific ERP are as follows:

  • Reduced material costs
  •  Improved quality and reduced scrap
  • An S&OP process that aligns sales demand, materials planning, and operational planning
  • More visibility into resource leveling
  • Improved delivery and commitments
  • Improved manufacturing use as delivery from inventory improves
  • Improved asset use More accurate cost information that leads to better margins and higher win ratios

For finance

“Finance is the key group for measuring the ultimate performance of the company.”

When disjointed systems and manual procedures require finance executives to manually collect and analyze data, the result is outdated cash flow information and long delays in closing the books. A flexible ERP system automates the data collection process. The required accurate information is always available with just a few keystrokes, and finance executives are free to focus on the initiatives that protect and improve the company’s financial health—from cash management to regulatory reporting. Benefits for Production Managers with a Flexible Industry Specific ERP are as follows:

  • Improved analyst productivity
  • Faster closing times and better accuracy
  • An S&OP process that aligns sales demand, materials planning, and operational planning
  • More visibility into cash status
  • Improved asset use More accurate cost information that leads to better margins and higher win ratios

Flexible ERP systems mean rapid ROI

Business processes that previously took a week to 10 days can be shaved down to minutes, executed automatically by enabling the effective virtual integration of all your business systems. The many benefits delivering a rapid ROI for this critical business solution include:

  • Increased employee productivity
  • Increased plant throughput
  • Decreased inventory levels and work in process (WIP)
  • Reduced operating costs
  • Increased margins
  • Increased profitability
  • Improved cash flow—and order-to-cash cycle times
  • Faster production turnaround times
  • The ability to set and deliver on “capable to promise” (CTP) delivery dates
  • Increased customer service, satisfaction, and retention

Conclusion

When you choose the right ERP system, you gain the ability to seamlessly combine your business data into a single voice and view. The discrete manual and paper-based processes associated with separate systems are no longer required, replaced by a flexible solution that can grow as your business grows. The ability to move information electronically throughout your operations in real time automates everyday processes and eliminates paper, while providing a detailed audit trail and ensuring compliance with disciplined procedures. For example, the start to finish process associated with a customer order can be completed in one-tenth of the time and the resulting reduction in administration time provides the business with improved agility.