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Archive for September, 2009

Food Processors and Distributors Require their ERP Systems to Enable Management of Items via Catch Weight Processing

Monday, September 28th, 2009 by admin

Food processors and distributors that produce and sell various meat-based products like those associated with chickens and turkeys have a unique need for catch weight processing.  Catch weight processing is used in wholesale distribution where the item’s actual weight varies from SKU to SKU.

An example of this would be chicken breasts, which could be processed and packed in four-packs for retail sale which are then shipped ten four-packs to the carton.  Let’s say, for example, the average weight of each chicken breast is 4 pounds.  However, the actual weight of the chicken breasts will vary piece by piece.

Therefore, when the retail four-packs are created, the actual weight of the four chicken breasts contained in that package is captured and recorded.  Then, when a series of ten four-packs is packaged into a carton, the actual weight of the chicken breasts in the carton would also be known and could vary from the average weight of chicken breasts in a carton.

Generally, while food processors’ and distributors’ customers would order and receive cartons of chicken breasts for retail sale or food service distribution, the associated customer pricing would be based on a per pound basis.  Therefore, strong ERP software systems like Enterprise 21 must enable food processors and distributors to record two quantities during key inventory transactions like production recording, packaging, and shipping – both the quantity of product cartons and the associated actual weight of the items contained in those cartons.

While retail and food service customers would place orders for a certain number of cartons of chicken breasts knowing each carton would contain ten four-packs with each chicken breast having an average weight of 4 pounds, the customer would be invoiced and pay a price per pound based on the actual weight of the chicken breasts contained in the cartons that were shipped to them.

Food processors and distributors can easily manage those products in their product mix requiring catch weight processing via Enterprise 21.


The Top 15 Signs Your Small Business Software Needs a Makeover

Thursday, September 24th, 2009 by Alex Smith

In my experience working with small businesses and assessing their software needs, the problems small businesses encounter with their existing software tend to be quite similar and do not pertain to a particular industry within the manufacturing or distribution marketplace. Below are fifteen signs your small business software is in desperate need of a makeover.

1.    You use one software package for accounting, a different software package for managing inventories and manufacturing, and a third software package for web orders.

2.    You can’t track lot or serial numbers for raw ingredients and materials through production and shipment to customers in your existing software.

3.    You are frequently out of stock of the products your customers order most frequently and have excess inventory supply of the items your customers never order.

4.    Your accounting software limits you to one costing method for all products.

5.    You enter the same data multiple times due to your use of multiple software packages.

6.    Closing an accounting period is a week-long procedure.

7.    You are forced to cease warehouse, shipping, and receiving operations for several days every three to six months to conduct a complete physical inventory count to try to capture accurate inventory information.

8.    Your physical inventory count consists of somebody hand-counting items in inventory, writing recorded values on a piece of paper, and then entering the information into an Excel spreadsheet.

9.    You don’t know what a cycle count is.

10.    Your existing software limits the maximum number of products you can enter into the system.

11.    Your reporting capabilities are limited to the standard reports in the software you purchased.

12.    You do not have an automated Request for Quote process for your suppliers.

13.    You have no means to track the true profitability of your customers and products.

14.    You have no means of tracking potential new customers.

15.    Your existing software is not capable of telling you the products an individual customer orders most frequently.


Reportable Food Registry – Food and Beverage Processors Must Now Report Issues within 24 Hours via the FDA’s RFR Electronic Portal

Monday, September 21st, 2009 by admin

As of September 9, 2009, food and beverage processors are mandated to report all reportable food incidents to the FDA’s Reportable Food Registry when, “there is reasonable probability that an article of food will cause serious adverse health consequences.”  This mandate applies to all food facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States.  Details of this program are available via the FDA’s Reportable Food Registry resource Web page.

The program includes reporting key data during an initial disclosure and via follow-up reports including items such as the date the article of food was determined to be reportable, a description of the food including quantity and amount, the extent or nature of the adulteration, the result of investigation to determine the cause of the adulteration, disposition of the article of food, and product information typically found on packaging sufficient to identify the article of food.

Once the submission is completed, a confirmation page identified via an Individual Case Survey Report ID (ICSR), including all submitted information, is produced.  This report can be saved as a PDF file and associated with key data elements in the food and beverage processor’s Enterprise 21 ERP system, including customer incident reporting, lot traceability data, and associated customer shipments.

Food and beverage processors are strongly encouraged to review their Comprehensive Recall Management plans and make appropriate adjustments based on the FDA’s Reportable Food Registry mandate.  For an overview of the Reportable Food Registry, please review the FDA’s “Reportable Food Registry (RFR): At a Glance” document.


What’s New in Enterprise 21 7.1 ERP?

Thursday, September 17th, 2009 by Alex Smith

We recently launched the latest release of Enterprise 21 – Enterprise 21 7.1 – and all of us at TGI are really excited about it. Enterprise 21 7.1 has some great new features that can be deployed throughout the organization for enhanced usability for the end user, as well as updates to Enterprise 21’s workbench technology, which allows end users to create their own inquiry screens without any modification to the application’s source code. So, what specifically are some of the new features in Enterprise 21 7.1?

A sample option for reports. Have you ever run a report only to find out it wasn’t the report you wanted in the first place? The “Sample” button helps prevent this problem by allowing users to get a preview of the report they are about to run.

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System-wide search functionality. In Enterprise 21 7.1, users can search for programs and screens within the application and be taken directly to that screen from the search results, allowing for quick navigation to a program, screen, workbench, etc.

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Intelligent hot buttons. The hot buttons in Enterprise 21 can be set up on a screen-by-screen basis. Hot buttons can be global in nature across all users, applicable to specific groups of users, or unique by individual user. Users can set up as many hot buttons as they like for any screen. The hot buttons allow users to move from one screen in Enterprise 21 to any other screen in the system with a single click. More importantly, Enterprise 21 knows the information content in common between the two screens – the screen the user is on and the screen the user is going to. From the product master screen, for example, a user could click on an available inventory hot button to view the real-time inventory status for that item at each of the organization’s facilities and inventory that is in transit between facilities.

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A complete document management system. Enterprise 21 7.1 allows users to attach an infinite number of documents to individual sales orders, purchase orders, customers, products, etc. These documents can include invoices, certificates of analysis (COA’s), spec sheets, product images, import declaration documents, and pretty much anything else. These “documents” can also be in the form of HTML links to a given web page. A wholesale distributor, for example, may have a supplier who provides product information on its website and set up a link to the web page containing that product information from within Enterprise 21.

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Paperless AP. A great new feature in 7.1 is paperless accounts payable functionality. This functionality can enable a manufacturer’s or distributor’s accounts payable department to operate in a completely paperless environment, allowing for reduced overhead expenses and streamlined payables operations. As long as the organization has a document scanner, adequate electronic storage space, and Enterprise 21, it is ready to adopt Paperless AP.

Updates to the Enterprise 21 Workbench Designer. One of the most positively received new features at TGI’s Annual Users’ Conference in May 2009 was the Enterprise 21 Workbench Designer. The Workbench Designer allows end users to create their own inquiry screens, programs, and graphical reports using a WYSIWYG editor. For a demonstration of Enterprise 21’s Workbench Designer, please click here.

These are just a few of the new features in Enterprise 21 7.1. To request a formal demonstration of Enterprise 21 7.1 that focuses on your organization’s specific business software requirements, please visit TGI’s online request form or call us directly at 800-837-0028.


Reviewing ERP Vendors’ Pricing Proposals: Does the Proposal Reflect the Demo? Does the Demo Reflect the Proposal?

Thursday, September 17th, 2009 by Alex Smith

When engaging in an ERP selection process, it is important to require ERP vendors to provide pricing for all demonstrated software functionality and the associated implementation and service fees for such functionality in their pricing proposals. An unfortunate tactic frequently deployed by many software vendors is to demonstrate the full scope of their respective software’s functionality and provide pricing estimates for only a fraction of the software functionality that was demonstrated during the sales process. Some vendors, for example, will demonstrate their software’s ability to allow manufacturers or distributors to operate their warehouse in a completely paperless environment through the use of RF and barcode scanning technology. When these same vendors draft a formal proposal for the selection team, however, the price estimate in the proposal does not reflect a warehouse management system that includes RF and barcode technology. The intent of the software vendor, sadly, is to mislead the selection team, make the selection team believe they are purchasing an ERP system that meets all of their business software requirements – both current and future – and then demand the manufacturer or distributor pay for additional software functionality after the fact. The software selection team should view such practices as completely unacceptable.

There are two ways for software selection teams to ensure that the functionality that was demonstrated to them is reflected in the vendors’ proposals. First, the selection team should require vendors to guarantee, in writing, that all demonstrated functionality is included in the proposals. If a vendor is not willing to agree to honesty and straightforwardness, then why would the selection team ultimately choose to select that vendor as their preferred solution provider from the selection process? Secondly, as part of the software evaluation process, selection teams should look for a software vendor who has provided consistent, straightforward answers to questions and pricing throughout the sales process and has a proven track record of providing upfront pricing for all demonstrated software functionality.

Requiring software vendors to submit proposals that reflect all demonstrated software functionality will provide the selection team with the necessary information to select a software solution that is free of hidden or unexpected software costs.


Inventory Management via Attributed Inventory

Monday, September 14th, 2009 by admin

One of the items we frequently run into working with manufacturing and wholesale distribution companies is the concept of attributed inventory.  More specifically, attributed inventory means that a given inventory item has a series of parameters (i.e., attributes), which further describe that item.  A very simple example that people can relate to is an item like a shoe, which would have attributes of size, color, and width.

Generally within legacy systems, manufacturers and distributors have fully described their inventory at a SKU level where every applicable combination and permutation of the product and associated attributes are specified for each given SKU.  Some may have decided to use intelligent part numbers in conjunction with this approach where their product ID might be SHOE-BLACK-12-EE for a black size 12EE shoe.

Alternatively, the manufacturer or distributor may decide to leverage attributed inventory within a strong ERP software solution.  In this case, the same product as above would have attributes defined as Color, Size, and Width.  Therefore, the product noted above would be SHOE with attributes of Color = Black, Size = 12, Width = EE.

While there are numerous ramifications to using attributed inventory rather than merely specifying product numbers for various combinations and permutations of items, one of the main advantages that can be managed easily with attributes is customer pricing.  As a simple example using the product of SHOE, if the standard pricing for a pair of shoes were $79.00 for all widths except EE for which there was an additional charge of $5.00 per pair, then pricing could be setup such that SHOE = $79.00 with the incremental pricing for Width of EE = $5.00.

While the above is a very simple example, when products have dozens of attributes, such as a steel coil, managing the product via any other manner besides inventory attributes would be impossible.  For example, one might specify the inside diameter, outside diameter, width, tolerance, etc. for the coil.

Even in cases where there are relatively simple products with a limited number of attributes, when companies embed the product configuration into intelligent part numbers they rarely are as straight forward as the example above – SHOE-BLACK-12-EE.  Instead, the coding process might be 1254-1C6, where the shoe is product “1254” with the next “1” meaning black, the “C” meaning “12,” and the “6” indicating “EE.”  The challenge is that using this type of part number is only passed along within the given organization via tribal knowledge, where employees only know the methodology through years of exposure.  This type of process makes it nearly impossible to easily train new employees to understand the company’s intelligent part numbering methodology.

Strong inventory management systems, such as TGI’s Enterprise 21 ERP, enable manufacturers and distributors to manage products in their preferred manner including via attributed inventory.  By using attributed inventory, these organizations make it much easier for personnel to perform sales, customer service, inventory management, and warehouse management functions rather than relying on an antiquated intelligent part numbering methodology.


Continually Realizing ERP System ROI – The Importance of Routine Dialogue with Your Software Vendor

Thursday, September 10th, 2009 by Alex Smith

An organization’s return on investment (ROI) for its purchase of an ERP system can be achieved in a number of ways. ERP software systems can allow organizations to streamline business processes, eliminate the need for duplicate data entry, improve access to information across the enterprise, provide the analytical and business intelligence software tools that are necessary to make informed business decisions, reduce inventory levels while simultaneously improving order and line item fill rates, speed up the order entry process through e-Commerce and EDI – the list can go on and on. Much of the ROI that is achieved through ERP system implementation and deployment, however, tends to occur in the first 18 to 24 months following initial system go-live. Given that a typical ERP system’s lifecycle within a given business can last as long as 20 years, organizations and software vendors should make it a point to work together on a routine basis to develop new methods and strategies that will enable the organization to achieve further return on investment long after the initial deployment of the software.

At TGI, we stress the importance of routine dialogue and bi-annual ROI strategy sessions with our customers. These ROI sessions allow customer personnel to speak directly with their software developer, express existing issues they are having, and communicate to TGI the various ways in which they see their business evolving. We, in turn, analyze these needs and recommend processes that can be deployed throughout the organization by leveraging various functional features in Enterprise 21 to meet such requirements. Many times, it is as simple as “turning on” a certain process in Enterprise 21 that already existed but was not enabled during implementation because the need to do so didn’t exist at that time.

Other times, it may be that the customer is ready to upgrade to the latest release of Enterprise 21. I have talked to a number of new business prospects in the past who were using software that they purchased 15 to 20 years ago, and a common comment I have heard from them is, “We didn’t really take advantage of upgrades while the software was still supported [by the developer].” Enterprise software solutions are updated, enhanced, and finely-tuned on a daily basis. Technology in general is rapidly evolving, and the ERP software industry is no exception. It is important for manufacturers and distributors to take advantage of software upgrades from their supplier to ensure they don’t find themselves in a technologically archaic business state. Furthermore, companies do not want to find themselves in a situation in which they suddenly learn one day that their 15 year-old business software will no longer be supported by their software developer and must purchase new software altogether.

By engaging in routine dialogue with their software provider, communicating evolving business needs, and taking advantage of software upgrades, manufacturers and distributors can continually achieve a return on investment long after the first few years following initial go-live with their ERP system.


Real Production Scheduling in ERP Systems: Servicing Short-cycle Demand in a Mixed Make-to-Stock and Make-to-Order Environment

Wednesday, September 9th, 2009 by admin

Most of the manufacturing entities with which we come into contact want to use their new ERP system for production scheduling purposes.  One of the first questions that people tend to ask us regarding this topic is, “Can you change production schedules via drag and drop?”  While this feature demos well, there are far more sophisticated questions that should be asked of ERP software vendors relative to production scheduling functionality.

Almost all manufacturing companies with whom we talk share the following characteristics:
•    They are capacity constrained in at least some portion of their production environment.
•    They run a mix of make-to-stock and make-to-order production.
•    There are certain products that may be produced on a very short lead time (as hot orders) that could be thrown into the production schedule the same day they’re ordered by customers.
•    There are complexities to process changeover in such a manner that producing all products of a given family or with certain shared characteristics (i.e., all products of the same color in a painting operation) is imperative to maximize production throughput and minimize off-spec production and process changeovers.

One of the first questions that a manufacturer should ask potential software vendors is whether their system performs finite capacity scheduling or infinite capacity scheduling.  With finite capacity scheduling, one can establish process and machine capacities which can be taken into account.  By doing so, the manufacturer who is capacity constrained can establish a realistic tentative production schedule by not allowing the system to produce a scenario that couldn’t possibly be performed.  If, for example, you only have production capacity within a given work center or have associated labor availability to produce 300 units of a given item per hour, it makes absolutely no sense to have your ERP system generate an unconstrained production schedule with 3-4 fold that amount of production per hour being assumed to run through that work center or with the given number of laborers.

Next, what capabilities does the given ERP system have to manage both make-to-stock and make-to-order production?  Make-to-stock production would generally be scheduled based on a signal – either traditional time-phased inventory management processes like MRP or via an electronic signal of similar nature.  Make-to-order production would be done by enabling business rules within the system to evaluate the given finished good’s bill of materials or formula, determine whether or not all required raw materials and ingredients were available, and if not, when they could be available via supply chain management, what available production capacity exists to produce the given item, and having the system schedule the production while concurrently generating any required purchase requisitions.  Within Enterprise 21, this description of capabilities embodies the collective functionality of Available and Capable to Promise plus Make-to-Order and Automated Supply Chain processing.

Assuming your organization runs with make-to-order processing and allows customers to place such orders on short cycle times (i.e., produced the same day they’re ordered), then it is imperative to leave production capacity available for the placement of these make-to-order items on the same day’s production schedule.  For example, if your organization runs two, eight-hour production shifts, and typically has four hours of short-cycle make-to-order production to perform each day, then it makes sense to set up your finite capacity scheduling processes to assume a maximum of twelve hours for make-to-stock production for the given day.

Finally, ERP systems like Enterprise 21 enable scheduling using schedule groups.  In this case, products with like scheduling characteristics can be placed in the same scheduling group and these items would be placed in the production schedule consecutively.  As well, one can establish scheduling group rules such that certain scheduling groups would follow the completion of other scheduling groups. As an example, in a painting operation where products being produced were white, red, and blue respectively, this would be a likely ordering of production to try to minimize the production of pinks and purples as color changeover occurred.

Similarly, where applicable, manufacturers should be able to build machine “clean out” or “wash down” time into the production schedule between the production of two different schedule groups. For example, a food manufacturer who produces certain items that contain peanuts or other food allergens followed by other items that cannot contain peanuts on the same production machine will need to have machine clean out time built into the production schedule between those two respective schedule groups.

So, if you’re a manufacturer with any reasonable level of complexity in your manufacturing processes, don’t be drawn like a moth to the flame during software demonstrations.  Dig deeper into ERP systems’ manufacturing scheduling functionality so you have a broader set of requirements beyond, “Does your production scheduling system support drag and drop functionality?”


Your Warehouse is Paperless. Why not Make Your Accounts Payable Department Paperless too?

Tuesday, September 8th, 2009 by Alex Smith

During the ERP selection process, wholesale distribution companies tend to focus heavily on the software system’s ability to process a wide variety of transactions and their associated accounting entries. Selection teams also focus on how various software solutions can help their organizations achieve greater operational efficiencies in order entry, customer service, inventory management, and warehouse management. Sophisticated ERP systems can allow wholesale distributors to streamline operations and improve overall organizational process efficiencies while simultaneously reducing overhead expenses. Unlike the order entry, customer service, inventory, and warehousing departments, however, the accounting department is frequently overlooked during the software selection process as a source for improved personnel productivity and greater departmental operating efficiency. An ERP accounting software solution that can allow the organization’s accounts payable department to operate in a completely paperless environment, on the other hand, can provide significant benefits to the distributor in the form of personnel time-savings, reduced overhead expenses, and decreased document retrieval time for situations in which a given invoice from a particular vendor is needed. In Enterprise 21 7.1, wholesale distributors can leverage paperless accounts payable functionality to achieve such benefits.

So, how does the paperless AP process work, and what is required to get started? First, the organization needs a document scanner for scanning invoices. Secondly, the organization needs adequate electronic storage space to store the digitized images of the scanned invoices. Assuming you have Enterprise 21, a scanner, and sufficient disk space, you’re ready to operate your accounts payable department in a paperless environment.

How it works. When the AP department receives an invoice from a given vendor or supplier, the invoice is scanned, an image of the invoice (usually a PDF) is generated and stored on the organization’s computer, and the associated purchase order document numbers are recorded. Enterprise 21 then automatically assigns a document number, creates an open AP matching record, and chooses the lowest value of the invoiced/received amounts to pay. A person in the AP department would then review the batch entries, view the invoices online as needed, make any necessary corrections to the batch entries, flag the purchase order(s) as complete where applicable, and commit the batch to be processed. From there, it’s business as usual for the AP department. This process enables wholesale distributors’ AP personnel to perform their daily tasks in a more timely, effective manner, eliminates the need for thousands of paper invoices to be filed and stored, reduces overhead expenses in the form of paper, filing cabinets, and storage space, and allows the AP department to retrieve any given invoice quickly and easily.

Paperless AP is just one of the exciting new features in Enterprise 21 7.1. Questions? Email us at info@tgiltd.com.


Selecting a Small Business ERP Solution: Small Business Software Should Not Be “Small” In Functionality

Thursday, September 3rd, 2009 by Alex Smith

When small businesses decide to migrate from their existing software to a more sophisticated ERP solution, they are doing so for two primary reasons: 1) the business has outgrown the software it is currently using, and as a result, what were formerly simple tasks to complete take an excessive amount of time and have resulted in the development of impractical, inefficient internal business processes; and 2) the small business’ leadership team has recognized the need to purchase a new software system that will allow the business to grow in gross revenue, net profit, and customer base without a proportional increase in staff. When a small business elects to purchase a new ERP system, it should not settle for anything less than what other larger organizations would find acceptable.

When selecting a small business ERP solution, full integration is key. There is no point in moving forward with an ERP vendor who does not offer a complete solution that includes accounting, inventory management, purchasing, order entry, customer service, e-commerce, business intelligence, and warehouse management. Again, one of the primary reasons why a small business begins to engage in a software selection project in the first place is to eliminate the need for multiple software solutions from a variety of software developers.

From a purely functional standpoint, a small business should be careful not to buy into many ERP vendors’ claims that the business does not need function X, Y, or Z. When developing a list of functional requirements, the small business’ selection team must take into consideration both existing and future software requirements. For example, the selection team should ask vendors to provide a sales quote/proposal that includes a fully-integrated warehouse management system with RF and barcode technology. Similarly, the team should look for an ERP accounting solution that is SOX-compliant and provides full audit trails. While these are just a few examples, there are hundreds of functional and technical requirements that the small business selection team should demand from software vendors. For more information on developing a list of ERP requirements, click here.

In addition to scope of software functionality, the selection team should also look for a software solution that is platform independent. By selecting an ERP solution that is platform independent, the small business does not need to worry about becoming “locked in” to or outgrowing a particular operating platform. The chosen software’s architecture should provide the small business with a variety of operating and database options to choose from for both today, tomorrow, and beyond.

Lastly, and perhaps most importantly, the small business should ask software vendors to describe the scalability of their proposed software solutions. The small business must do everything it can during the selection process to ensure that whatever software it selects, the software will provide the business with an opportunity for growth. The small business’ selection team should require software vendors to disclose the lowest user count for a given business using the proposed software solution and the highest user count for a given business using the proposed software solution. The difference between these two user counts should provide a fairly good indicator of the software’s scalability. The selection team should then request a formal proposal from the software vendor that includes all previously demonstrated functionality and all functionality that was deployed in both the low and high user count business’ software solutions.

By following these simple guidelines, small businesses should be able to obtain the necessary information from software vendors to select a small business software solution that is anything but “small” in functionality and features.