5 Guidelines for Evaluating ERP Systems for Consumer Packaged Goods Manufacturers
Today’s ERP systems for Consumer Products Manufacturers must drive true transformation.
In order to compete, consumer goods companies must keep pace with customer demand while managing margins and complying with ever-changing safety and environmental regulations.
Companies must also manage a variety of pressures ranging from the price of raw materials needed to produce their goods, to the energy needed to run their manufacturing plants.
Speedy product development and replenishment lifecycles are the order of the day since today’s consumer goods manufacturers are faced with growing demands for the fast delivery of personalized goods. information systems should help optimize supply chains and help manufacturers that are facing tightening margins.
To compete and thrive, it’s critical to understand key criteria about ERP systems for Consumer Products Manufacturers.
Guidelines for Selecting ERP Systems for Consumer Products Manufacturers
As an ERP consultant team, we speak with many companies looking to better handle the functional areas they need to run and grow their business.
Some of the key areas project teams are challenged with involved areas such as managing demand planning and forecasting; integrating customer orders, and streamlining warehouse management to name just a few.
In general, to drive business process improvement, We remind firms to keep in mind the following guidelines:
- Process automation:Look for features and functions of an ERP system that takes out reliance on manual intervention and siloed spreadsheets, so the team is better positioned to deliver new products quickly and more cost-efficiently
- Full Integration with CRM: Be sure the ERP system provides a seamless connection to CRM features for optimal customer service, helping to manage order customization, promotions, trade spending, and rebates. It’s key to easily manage customer relationships and sales orders.
- Integrated Product Configuration:CPG companies are expected to provide quality and accuracy to customers. Enterprise systems should offer product configuration basics, and be integrated to configure and customize products based on unique needs, so it’s easy to make modifications, track costs, and maximize performance.
- Compliance Functionality:Keep an eye out for the latest features to help comply with product safety standards. Today’s modern systems help organizations meet increasingly complex customer and regulatory mandates related to reporting, labels and other areas.
- Streamlined EDI:Be sure systems can better streamline seasonal forecasts, Electronic Data Interchange (EDI), distribution, and optimizing workflow.
While not an exhaustive list, this is a good look at what to keep in mind when evaluating ERP systems for Consumer Products Manufacturers.
Considering ERP systems for Consumer Products Manufacturers?
- Contact the us to drive your organization’s transformation
Resources to Help Manage Risk During an ERP Project
It’s a challenge for project teams to manage risk during an ERP project. We know as an ERP firm with extensive experience in ERP selection and implementation projects that no enterprise software implementation project comes without some risk. To gain the desired success, it is essential to identify and manage risk during an ERP project.
Most manufacturers and distributors don’t have the expertise to pinpoint what causes risk and how to create an ERP risk management plan. The manufacturing and distribution teams we work with have relayed that managing risk is one of the strongest reasons to work with a consultant team.
ERP Implementation Risk
In our context, risk in an enterprise software implementation is defined as a chance of exposure to adverse consequences of future events. Risk might come masked as changes in leadership and project team priorities, lack of proper budgeting and unanticipated financial forecast changes, scope creep as the project requirements change, a lack of details that alters the project timeline and budget, lack of skills in managing organizational and culture change, and more.
Over the years of hundreds of engagements, the business improvement consultants at ACEteK have identified four general areas of risk that can sabotage an enterprise project:
1. Lack of proper team resources and executive leadership/buy-in. ERP project teams are successful when they can properly devote their time to the project and have executive support.
2. Lack of team resources with extensive experience in various disciplines who will document the current and desired future state of operations. The role of an ERP consultant can fill this gap, bringing industry experience to propose suggested business process re-engineering directives.
3. Settling for out-of-the-box solutions rather than focusing on the appropriate fit between ERP features and the desired future state of business processes.
4. Assuming an ERP project is “just” an IT project. In fact, implementing a new enterprise technology solution is the perfect time to review and revise business processes to maximize the technology investment.
Resources to Help Manage Risk During an ERP Project
ACEteK’s experts have provided numerous ways on how to minimize and manage risk during an ERP project.
Developing a formal plan for an implementation project is a smart strategic step for the ERP project team. ERP project risks fall into three categories: cost/money, timeline, and scope/quality.
To manage risk during an ERP project it pays to get educated. As a part of our toolkit of ERP education resources, we have developed methodologies for dealing with risk, including prevention, reduction, transference, contingency, and risk acceptance. Our structured approach to risk analysis and risk action begins in the planning phase and continues throughout the project.
At ACEteK, our experience gained from more than 100 successful ERP engagements has given us specific knowledge of the Types of ERP Risks You Simply Can’t Afford to Ignore. We guide teams to address serious project and business issues. The risks we encounter most frequently fall in the areas of:
• Business priorities and leadership
• Financial budget and value realization
• Project scope and timeline
• Resource staffing and competencies
• Change and cultural adoption
• Process capability and future state expectations
As part of ERP process improvement services, ACEteK focuses on proactively identifying ERP risks and instituting risk management best practices. We apply methods throughout the implementation process to proactively identify, plan for, and mitigate risks.
We understand that an ERP project will deliver success only when it is built on business process improvement rather than driven merely by ERP system features. Consider these questions when selecting ERP software:
• Why is business process improvement the place to start, even before selecting ERP software?
• What are the key categories of decision drivers?
• How is setting strategic decision drivers different from the traditional RFP process?
Learn More to Manage Risk During an ERP Project
It is imperative to have the right resources to carefully plan for and manage risk during an ERP project.
What’s the Best Approach to Project Management and ERP Implementation?
As an independent ERP consulting firm, we have guided manufacturers with project management leadership for hundreds of enterprise software projects over the years.
Because of this, we know that competent project managers coupled with a proven methodology are the key to a successful enterprise software implementation.
Conversely, inadequate project management practices and inexperienced resources are proven root causes for the failed implementations we have seen and subsequently rescued.
Effective Project Management and ERP Implementation
When looking at the most effective approach to project management and ERP implementation, note that project management is an integrative endeavor, where every action, or failure to act, can affect your chances of success.
Key requirements of effective project management are as follows:
- The project manager assigned to the ERP project should be experienced and have a portfolio of multiple projects like yours.
- Your project manager should have a track record of leading successful improvement initiatives, enterprise software selection activities, enterprise software implementations and organizational change management projects with referenceable customers and measurable results.
- Consider structuring an enterprise project management office (PMO) that reports directly to an executive steering committee. This approach is paramount for managing resources and the project plan.
- In addition to having an experienced project manager, the PMO should include team members from across the enterprise who are accountable for the project’s success.
An Implementation Partner or a Transformation Partner?
When manufacturers and distributors turn to us for project management of an ERP implementation, they benefit because our team is up to speed on the organization’s future state needs.
When we guide enterprise software selection, our team is already embedded with key resources and functions as a transformation partner instead of a software delivery provider.
More than guiding the implementation alone, we act as a transformation partner by capturing the benefits of the new technology, which we identify during the business process improvement and selection phase.
We allocate only the staffing needed to ensure all critical implementation deliverables are covered – driven by a joint work-split analysis during the Selection Phase.
Comparing Approaches to Project Management
When comparing approaches to project management and ERP, it is useful to list out the various approaches available to the ERP project team.
We encounter three main implementation strategies in our engagements: using a software vendor, using a third-party service, and using internal DIY resources.
Using a Software Vendor for ERP Implementation
Using a software vendor for ERP implementation is a typical approach in the marketplace. But the approach has its limitations.
While the software vendor knows the technology and its functionality, the vendor is only focused on the software implementation. Vendors, as a rule, do not engage in any business process improvement or transformation activities nor do they uncover opportunities for process change found during the BPI and Selection Phases.
Moreover, vendors do not always cover all elements needed for a successful implementation – many implementation risks occur in areas that vendors do not review in their implementation methodology.
Using a Third-Party Implementation Service
Much like software vendors, third-party implementation services generally focus solely on the software implementation.
They frequently lack a strong project management capability, a robust methodology and a background in business process improvement/technology selection opportunity analysis outcomes.
We have often encountered third-party implementation services that lack the full knowledge of a vendor’s software, which means the vendor needs to be involved in the implementation anyway.
Using “DIY” Internal Resources
It is rare indeed to encounter a manufacturing or distribution organization that has sufficient staffing to run a successful end-to-end implementation without external support and expertise.
Using a DIY approach leaves the company open to critical risks, including difficulty identifying correct internal skill sets, inability to staff internal resources already allocated on other projects, and no clear career path available to the internal team after project completion
Other issues with a DIY approach involve lack of internal methodology that covers all work streams to achieve a low-risk project, and a lack of the ability to manage the more technical activities of the software vendor.
We have been called upon many times to rescue manufacturers taking on an internal enterprise technology implementation project.
Seeing Clearly: Data Visibility Improves Decisions
As an ERP consulting firm, we often guide teams to work through enterprise system selection to improve key processes related to gaining visibility into the enterprise.
A common theme running is a desire these organizations have for improved visibility and transparency of information.
The role of an ERP consultant adds clarity in helping the ERP project team understand the types of data that should be tracked, the reporting format that is most useful, and the importance of integrated data visibility.
ERP and Data Visibility
Today’s modern ERP systems capture, store, and trend a range of information such as quality, production, shipping, financial, supply chain activity and more.
Yet even today, many organizations use a variety of manual methods, standalone spreadsheets and other patchwork systems to track data, and are in a poor position to react to change, optimize business processes such as production planning, or to improve relationships with customers and supply chain partners.
This is where “data visualization” comes into play – making key data actionable by visually aggregating numerous data points into displays that use colors, gauges, graphs, and other visual representations to display trends, averages, unusual results, compliance with goals or expectations, and other “actionable” information for managers and executives.
Learn More about Data Visibility
No matter the sector – food processors, industrial equipment, metal fabricators, distributors or others – the teams we talk to are hungry for real-time visibility into their entire operation to clearly see bottlenecks, adjust and improve productivity.
With access to more timely and accurate information, the assumption is that manufacturers use that data to take the needed action to improve business processes.
A focus on business process improvement is the foundation for successful implementation of an ERP system that improves data visibility.
Looking to transform your enterprise through effective use of information systems? Contact ACEteK Software Limited for the best way to get started.
5 Signs You Need an Integrated ERP System
What are the pitfalls we often see when an ERP system is not fully integrated?
Enterprises are leaving ROI on the table when fear of the cost of investment keeps them from integrating systems together to streamline all operations and processes. Moreover, they don’t have the visibility that adds strategic accuracy into operations, an acute understanding of customer preferences and requirements, and insight into possible efficiencies. Our business improvement consultant’s report scenarios from the field where enterprises with poorly implemented integration have fulfillment delays and sloppy order processing, a lack of visibility, and flawed decision-making based on obsolete data.
An integrated ERP system gives a full accounting of inventory, shipping, quality, orders, payments – in short, a total and accurate real-time picture of the shop floor truth
5 Signs You Need an Integrated ERP System
The role of an ERP consultant is to deliver independent, unbiased guidance to businesses as they look to achieve streamlined operations and reduced costs. From that guidance, we have assembled 5 telling signs that you need an integrated ERP system.
Your enterprise relies too much on manual spreadsheets
A common problem we help our clients solve is their over-reliance on Excel spreadsheets. They are error-prone and easily corrupted, lack appropriate version control, lack consistency from one department to the next making them less useful, and often are duplicated by departments spending time and resources creating spreadsheets another department has already drafted.
Spreadsheet are cheap and relatively easy to use but come with many costs. A spreadsheet cannot maintain the complexities and best practices necessary, for example, for strategic supply chain management, inventory-based replenishment, production planning, and other processes in the enterprise. They mask the data visualization and real-time intelligence enterprises so desperately need.
Functional areas use siloed, standalone systems
When we see enterprises with standalone systems that can’t communicate with each other, we know that the ERP project team needs to connect all systems together to gain operational efficiency.
Without integrated ERP, manufacturers and distributors cannot properly track production, inventory, quality, ordering or other operations
Enterprises working with multiple standalone systems and siloed data that’s inaccessible face duplicate data entry processes that are often manual and ripe for errors, a lack of visibility, and obsolete reporting and forecasting. Without an integrated ERP system, manufacturers and distributors cannot properly track production, inventory, quality, ordering or other operations – they are introducing opportunities for waste and manual errors.
Standalone applications keep data from flowing properly throughout the enterprise because disparate versions of intelligence are used upstream or downstream.
You can’t trust your data
Without an integrated ERP system, many businesses are making crucial business decisions based on inaccurate and obsolete data that needs manual consolidation and manipulation. Multi-million dollar forecasting and decision-making based on untrustworthy data is a recipe for disaster. The total amount of data and information produced on the shop floor can’t be trusted when it comes from standalone, legacy systems that are not integrated.
Actionable operational intelligence is critical for decision-making in an efficient organization.
You can’t monitor reports or data in real-time
Manufacturers and distributors live or die on real-time visibility into their entire operations to monitor productivity, solve bottlenecks, and respond to customer requirements, not to mention make time-sensitive forecasts.
Lack of an integrated ERP system that delivers real-time means that managers are hamstrung and often revert to manual workarounds to digest the enormous amount of data generated each hour on the shop floor.
Last month’s data is no substitute for data from the last hour.
When our business consultants conduct a current state analysis, they often find a lack of real-time, actionable intelligence. With an integrated ERP system, real-time reporting is achievable.
You can’t easily see “the big picture” of enterprise performance.
Hand-in-hand with a lack of real-time, actionable intelligence and production metrics is the inability to see the entire enterprise and its performance metrics as a whole. This strategic success factor outweighs all the others.
Seeing operational metrics from an integrated system lets organizations know if they are meeting their goals in terms of productivity and costs.
For businesses, seeing all operational metrics from one integrated system is the only way to know if they are meeting their goals in terms of productivity and costs, among others.
Access to accurate and timely data managed by their integrated ERP system is essential. Hidden costs, production inefficiencies, costly manual workarounds, and even safety issues won’t come to light without real-time data and an all-encompassing view of the enterprise.
Supplying timely and full-picture metrics of the operation is what integrated ERP systems do. They deliver vital performance information with real-time or near-time reports and dashboards.
The Benefits of an Integrated ERP System
If your organization is experiencing any of these 5 warning signs, it’s time to consider an integrated ERP system.
The benefits of integrated ERP include better operational and performance management, reduced costs, reduction of manual errors, improved view of customer demands and buying trends, better-informed decision-making and forecasting, and real-time visibility into every facet of the business process.
We’d love to hear from you about your project. Whether you are interested in a new ERP system for your business, or if we can assist with your current system, get in touch!
Contact form: http://aceteksoftware.com/contact/
5 Surprisingly Common ERP Selection Issues
Is it time to select a new ERP system? You are looking for one that will meet all your needs, be easy to implement, accepted by all right from the start, and provide a return that makes you a hero and helps your business succeed. ERP selection should be easy, right?
Issue 1: Not starting with business objectives
What do you hope to accomplish? What demands are your customers placing on you? What problems need to be solved? Will a new ERP system solve those issues? How will a new ERP system solve those issues? ERP is nothing more than a tool that might be able to get you where you want to go. It is a very powerful tool but it cannot solve every problem.
Make lists of what you hope to accomplish and what are the barriers to achieving those accomplishments. Prioritize the objectives. Monetize the objectives. Make this a large-scale enterprise-wide team effort. Your objective might not be another person’s. Neither of you might be targeting your organization’s objectives. As a starting point, increasing efficiency, replacing outdated legacy systems, and gaining greater functionality were the top three reasons businesses chose to implement their ERP. Spend as much time on this phase as necessary. Unless you get this part right, you could doom any efforts to select and implement any ERP.
Next, look at the objectives and determine how or if an ERP system can help get you there. Look too at your current ERP and other tools you already have. How can you use any of these to get toward your objectives? The gaps left behind are why you need to consider an ERP. Understanding those gaps and how ERP can resolve them is critical. Some of these are must-have and others are nice to have. Knowing that your ERP selection takes care of all the must-have needs and many of the nice to have needs will eliminate many problems others have with ERP selection. It meets the must-have needs or it doesn’t. Real simple.
Issue 2: Delaying process improvements
Do you re-engineer processes before your ERP selection or after? Often there is no absolute right answer; you could succeed either way. Process re-engineering can be more valuable to meeting your objectives than the ERP system itself. If the re-engineered process depends on the features of the new ERP, you might think you have no choice. But look carefully and maybe there is some part of the process change that could begin immediately with your current tools. You are in business to make money. If your goal is to make $100 after selecting and implementing an ERP but you could make $75 right now by changing some processes, why wait?
Process re-engineering and ERP implementation can both be large, complex projects. Try to keep them separate. Work on one at a time and get it done before disrupting the business with a second project.
Issue 3: Delaying change management
This isn’t directly a part of ERP selection, but change management is one of the key reasons why an ERP project might fail. Whatever ERP you select, you don’t want to plan to fail.
Change is about people. People learning a new way to get their jobs done and embodying that new way so deeply that when a crisis comes along, they automatically use the new ways and do not return to the old process they once were comfortable with. People will change how they do their jobs. Some will change easily and others not so easily. Few will simply never change. They have to know why the change is important to the company. They have to know even more so why the change is important to them. We all ask, “What’s in it for me?” That answer has to be crystal clear to each and everyone involved. Even then, they must be competently trained and have confidence that the other people upstream and downstream from them in the process flow will use the new processes too.
Issue 4: Not considering current resources
You might decide that Brand X ERP meets all your must-have objectives and more of the nice-to-have ones than any other ERP. You could also find that Brand Y also meets all the must-haves and nearly as many nice-to-haves but can be implemented with the resources you already have. Project management is a resource you cannot succeed without. Less-visible resource needs are IT people to manage data conversion. Resource needs can also be hardware and ancillary software needed to fully implement the ERP you select. People’s time for testing the ERP, training in the ERP and new processes is very important. Will you pay overtime? Can you avoid some tasks those people currently do? Do you have available time now because of a decline in your order bookings?
Issue 5: Personal bias
You need a new ERP and you understand the priority of needs that an ERP must meet. You might have used a particular ERP at a previous job. You might have even worked for the ERP vendor. Sure, you are comfortable with that product. Don’t let your personal bias interfere with selecting the best product for your business and its needs. This is subtle. It requires stepping outside of yourself. Do it.
None of this ensures you will have no problems with ERP selection, but this preparation ahead of the selection will greatly help you make the best choice.