Posted by John Asi on Fri, May 07, 2010 @ 03:13 PM
Successful companies have always been on the search for ways to streamline their business processes and run their daily operations as efficiently as possible. These companies know that their success as a business relies on how efficiently they interface within the supply chain and adapt to demand as needed. The brutal economy that crippled companies around the world last year and the slow recovery that has followed has forced many companies to evaluate how they operate within the supply chain and find ways to increase their productivity while keeping the cost of doing business down. EDI is a powerful tool in streamlining business processes and providing cost savings in the right environment.
So one might ask, "What is the wrong environment?" Good question. Too many times the consideration for using EDI does not go beyond the effort needed to get an EDI file in-house and possibly formatting a report to output some needed information from the data because a trading partner requires communication through standard EDI documents. Another situation may be the result of a legacy system that has been in place for many years with no one understanding what the magical "EDI box" really does other than it regularly outputs reports containing business critical information. From there a user might take that information and key in any orders and then call it a day and a job well done if they entered all the data correctly. In either case EDI has not proven its usefulness as a powerful and effective cost saving business tool.
Finding the "right" environment in which to implement EDI is not very difficult. It does require a little investment of time, a good understanding of internal business processes, and the right tools to make the most effective use of EDI within the corporation.
The time investment comes in the form of doing the research and understanding what documents a trading partners can work with and if those documents are used in sufficient quantity such that they consume a significant time to handle manually. A simple example of this is an automotive manufacturing delivery schedule (X12 862 or EDIFACT DELJIT). While receiving 1 or 2 on a weekly basis may require several hours to process manually, handling 20 or more of these documents becomes a significant process.
Understanding internal business processes is critical in order to adequately define business rules that are needed to correctly translate and process EDI. Knowing how key data elements are used within the company will help in configuration and support of the EDI process.
Ultimately, the most important piece in the equation is having the right tools available to make effective use of the EDI process and the data it provides. EnterpriseIQ and its integrated eCommerce module is such a tool. The eCommerce module is capable of processing both inbound and outbound transactions. Being integrated makes it possible to take inbound EDI data directly into the system and automatically create forecast schedules and firm sales orders and output order acknowledgements (855), shipping notices (856) and invoices (810) just to name just a few transactions. With the powerful MRP engine in EnterpriseIQ, the system can create work schedules and purchase requirements based on the data provided by the EDI transactions. Add the ability to take purchase requirements and generate outbound vendor purchase forecasts/orders (830 and 862) through the eCommerce module, EnterpriseIQ shows its strength. Another tool available within the EnterpriseIQ suite is EServer. This tool is used to completely automate the defined business process for handling EDI from start to finish. Specific actions can be defined to allow processing of acknowledgements, orders, notices, reports or any other requirements to effectively monitor and process the data flowing through the system. Utilizing EServer with the eCommerce module and the MRP engine allows EnterpriseIQ function seamlessly and efficiently within the supply chain while reducing the amount of time required handling manual processes, eliminating the chance for human induced errors, and keeping data and material flowing where it needs to.
Any company looking to streamline their processes and better fit into the supply chain should take the time to research how EDI might help them cut costs and become more efficient. While EDI may not be a fit for every company, knowing how they interface within the supply chain can provide valuable information and other opportunities to look for efficiencies.
Review how automotive supplier Nissen Chemitec America is utilizing eCommerce solutions by reading their case study.
Posted by Daniele Fresca on Thu, Apr 29, 2010 @ 01:02 PM
We have all done it. We've all said something was "good enough." It isn't great, it isn't bad; it's just okay. Whether it is your house, your car, your job, etc.... we often find that settling for things is easier than pursuing another option. And we are right, it is often easier. But is it the best way to go about evaluation and decision making. No it isn't.
The same holds true with ERP software. When asked, leaders of many manufacturing companies I recently talked with tell me that their ERP software is "just okay." They know that it doesn't meet a majority of their needs but they aren't compelled enough to change. The reasons vary as infinitely as the companies themselves. For some, not changing is due to cash flow - or lack there of. For others, business is slowing down and committing to a new ERP system isn't a top priority. For a different group, the opposite is true; business is picking up speed again and now there is no time to put effort into a change. Still others feel the pain from their last ERP implementation many years ago and assume that doing nothing is simply easier than changing.
Whatever your reason is to settle for "just okay" think of this: in other aspects of your manufacturing facility is settling an option? If product rolled off your machines, conveyors, or assembly tables that was obviously flawed, would you still send them to your client? If an employee was consistently late or offered little value would you still employ them? The truth is we put more stock in the quality of our products and employees than we do in investing in the proper tools to assist in the process. ERP is one of those important tools that is often neglected and it shouldn't be.
ERP systems should make the job of running a manufacturing company easier by accurately meeting your business process and manufacturing needs. Your ERP system should allow you to do more with less! It should help identify areas within your processes where time and money can be saved. It should increase communication across all departments within the company. A great ERP should also automate information obtained from the shop floor and eliminate redundant data entry.
But it is more than just basic ERP functionality. An ERP system should also be able to provide relevant information to its users in a timely manner, with valid data. If a facility manager can't get information like "total down time and its main reason for the last 30 days" or "most profitable and least profitable produced part - based on actual costing - within the last 2 weeks" then the ERP system isn't doing enough for you. Your ERP system should tell you when tools/dies/machines are up for maintenance based on actual usage before they require repair, rather than after they fail. A good ERP system should be an enhancement to the manufacturing process, not a hindrance. By obtaining valuable and accurate information in a timely manner, ERP should help manufacturers produce better product because it identifies areas of improvement or success.
So, I invite you to take a few minutes and think about how your ERP system is helping your company and how it might help your become more competitive. Evaluate your ERP and ask is it "good enough" and then decide to demand great!
Want more information on how a great ERP can help your facility? Download our whitepaper "How The Small Get Mighty"
Posted by Daniele Fresca on Thu, Apr 08, 2010 @ 06:41 AM
This is the year! You have decided you are going to evaluate your existing Enterprise Resource Planning (ERP) system or make the leap to buy a new one. Congratulations.
Now where do you begin? There are many tools available to help (internet sites, downloadable ERP questionaires, consultants) to evaluate and narrow the field of suitable suppliers. However, I would suggest that one of the best decisions will be to make "industry specific" a key determining factor in the overall evaluation.
In the first stages of vendor selection, often times immediate features, functions, databases, and cost are on the top of the list for review. They should be. But whether or not an ERP system is designed with your company business and manufacturing processes in mind should also be among your top criteria. Why? Because a highly effective ERP system cannot be eveything to everybody and still have the depth to meet the needs of specific industries. An ERP system that speaks the same language as your processes, your employees, and your business culture provide a competitive edge over ERP systems that don't. This criteria also gives you insight into what other companies in your industry are using their systems for. By this I mean that ERP systems that are industry specific have development driven by other companies in the same industry.
For example, in the medical industry does the ERP understand and handle complaint tracking? Do the ERP salespeople say "yes" because you can pick up the phone, take a complaint, and type it as a note somewhere in the software or is there a specific module for complaint tracking? What about the automotive industry? Does part of their electronic data interchange (EDI) process include any manual entry or is it completely automated? How about plastic injection molding? Does a family tool bill of material (BOM) require more than one BOM or more than one machine to schedule?
Industry specificity also translates to quicker ROI because implementation and training times are reduced. Choosing an ERP system that understands the industry you are part of makes it easier when comparing your needs to the software. The ability of a software to identify the subtle nuances associated to your industry make data transfer, data import, and the roadmap of implementation more concise. In addition, customer driven requirements that are inherent in your industry are known and therefore manufacturers don't have to hassle with "workarounds." Instead of modifying all the manufacturing processes to fit the software, it is simply the other way around.
So when you decide to evaluate whether your existing software fits your needs or an upcoming purchase, looking at industry specific ERP will give you a competitive edge.