2010 | ERP Blog | ERP Insights

Pet Food Distributors Require Wholesale Distribution Software with Strong Product Recall Management and Lot Traceability Functionality

Saturday, September 18th, 2010 by admin

In recent months and years, we’ve seen substantial issues with product recalls for peanuts, pistachios, and a variety of other food products consumed by humans. Lately, there has been a lot of activity focused on the recall of pet food due to salmonella. Read More…

For those pet food distributors with strong wholesale distribution software like Enterprise 21, they are well positioned to manage this difficult situation as efficiently as possible. When pet food is received by the distributor, the associated vendor lot numbers are recorded in the system as part of the inventory transactions. At each step in the process, when the product is moved, picked, packed, and shipped, the given products and associated lot numbers are recorded. Should the need arise, the complete scope of affected product can be identified through lot traceability – either forward traceability (when a vendor provides data about specific products and lots) or backward traceability (when a customer provides data about specific products and lots).

Likewise, having a comprehensive, well-defined, system-enabled recall management plan enables pet food distributors to manage the process efficiently with customers, vendors, and governmental agencies. This includes having documented and repeatable processes and procedures and associated data available to define the scope of and execute the product recall.

Beyond strong lot traceability and recall management capabilities, pet food distributors will also appreciate Enterprise 21’s functional strengths in managing:
•   Multiple facilities for territory assignments and intra-company transfers,
•   Customer segmentation for sales analysis and customer pricing methodologies,
•   Pricing and promotions management by various units of measure, including rotation allowances and promotions with complex rule sets,
•   Order management with manual, EDI, and Web-based entry methods, and efficient customer returns processing,
•   Purchasing by managing vendors with multiple ship-from locations, vendor promotions and rebates, and vendor returns processing,
•   Inventory management and warehouse management with shelf life management, stock rotation, and multiple picking methods to support pallets, layers, and eaches,
•   Transportation management supporting route delivery plus common carrier shipping, and
•   Accounts receivable and receipt of payment including processing checks from parent organizations to pay off multiple child invoices concurrently and integrated credit card processing.

Pet food distributors will derive tremendous benefits from strong distribution management systems like Enterprise 21, including efficient management of lot traceability and recall management, while simultaneously improving operational efficiency and customer service.

Tags: Lot Traceability, Recall Management, Wholesale Distribution Software
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Process Manufacturing Software: Key Benefits Elude Companies without Strong Inventory Control

Wednesday, August 11th, 2010 by admin

I met with a company recently who is evaluating new process manufacturing software. They currently have separate systems for manufacturing and distribution. They also have numerous processes they’re performing off-line in spreadsheets and on paper. As a result, they don’t have one cohesive set of real-time information available for use across the enterprise. Read More…

Their #1 core business issue is that they have an inventory control problem. This should not be surprising based on the discussion about separate systems and off-line processes; however, in further peeling back the details behind this issue, while company management “wants” to resolve this issue, it wasn’t clear to me they were willing to do what was necessary to “make” the issue go away.

A cornerstone of strong ERP systems like Enterprise 21 is strong inventory management – a series of processes and associated data that enable process manufacturing enterprises to be able to plan and execute effective and efficient raw material and ingredient sourcing and production operations. This means being able to buy and produce exactly what is necessary to support customer demand without incurring excess inventory, whether the business manages its production operations via make to stock, make to order, or a combination of methodologies.

Without strong inventory control and accuracy, setting and adhering to the processes and procedures necessary to know how much inventory is being held and where that inventory physically resides in the enterprise, a process manufacturing company cannot achieve strong inventory management and customer service. Or said conversely, without strong inventory control, companies will have too much inventory overall, not enough of the right inventory to satisfy customer demand, and customer satisfaction will be reduced.

Process manufacturing systems that include fully-integrated RF/barcode-enabled warehouse management provide all the necessary software functionality to enable companies to have strong inventory control and inventory management. However, software functionality alone is not sufficient. Having documented, repeatable processes and procedures, training personnel to perform these operations, and requiring personnel to comply with the processes and procedures is more critical than the software functionality itself.

Having the greatest system in the world without people performing their appointed roles in the manner required will make that system useless. In the arena of inventory control, this starts with personnel performing a system transaction for every physical task they perform regarding inventory – receipts, putaways, moves, picks, packs, and shipments. A system task must be performed to update inventory data every time a physical task involving inventory is performed.

Even if a business were willing to put the necessary systems, processes, and procedures in place, it will be disappointed that a “new system” does not provide improved inventory control if it is unwilling to establish and manage to a culture of compliance with those processes and procedures.

Tags: Inventory Control Management, Process Manufacturing Software
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When Should I Replace My Existing ERP Software?

Tuesday, July 6th, 2010 by admin

Let’s examine when it’s time to consider kicking off an ERP selection project replacing your existing manufacturing or distribution ERP software. There can be a number of symptoms that will help point someone to realize it’s time to evaluate and implement new ERP software. Here are some examples. Read More…

Current software can’t match existing business processes – this may have existed from day 1 of installing your new software if you did a poor job of selecting software the first time, and the gap may have continued to widen over time.
The business is changing and software can’t enable this change – as a business changes and grows, new processes can get introduced which help enable that business to be competitive in new markets with new customers.
Lots of off-line processing (i.e., spreadsheets, manual processes, re-keying of data multiple times) – if the existing system doesn’t allow someone to get their job done, they will tend to find ways around the system to do so. Unfortunately, these inefficiencies can eat substantial amounts of time and can create data inaccuracies as the “same” information is entered multiple times in disparate systems.
Have lots of “data” but can’t get “information” out of the system – analyzing information is critical to continuous improvement and attracting and maintaining good customer relationships. One can get handcuffed by having a data rich, information poor environment where they put data into their system but can’t get any information back out.
Can’t easily implement new functionality or technology (i.e., RF/barcode, EDI, warehouse management system, CRM software, etc.) – there may be improved efficiencies to be gained and new customers attracted by making it easy for them to do business with you. Many times, technology is a key enabler to making it easy for your customers to interact and transact business with you. If you can’t readily adopt these new technologies, you may lose customers who are better prepared to transact business with your customers.
Existing software and/or underlying infrastructure is no longer supported by the associated vendors – as there have been massive amounts of acquisitions in the ERP market over the years, there are lots of ERP solutions which were thought of as “flagship” solutions that are no longer receiving an adequate level of investment to keep existing customers satisfied and to attract new ones. Your vendor may have “dropped support” for your software without formally announcing it to you.
Can’t keep up with business demands by writing custom software vs. using packaged software solutions – for those who continue to write their own custom software, there are so many “commodity” processes that could be enabled via packaged software while still gaining the benefits of customized software in those “competitive advantage” processes – those processes that enable a company to gain competitive advantage in its marketplace. Unfortunately, most companies who have a “build” vs. “buy” approach to software do so across all business processes, and either pay a lot for “commodity” processes or can’t get resources focused on the “competitive advantage” processes due to keeping day-to-day operations running. Don’t allow yourself to be held hostage by your internal application development team.

While the above is not intended to be an all inclusive list, these symptoms are very common in businesses. As symptoms continue to pop up and their results become increasingly more disconcerting, manufacturing and distribution businesses will opt to evaluate and implement new ERP software solutions to remove these barriers to future business growth.

Tags: erp selection, ERP Software
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Download the Latest TGI ERP White Paper from the TGI Resources Library

Wednesday, June 30th, 2010 by Alex Smith

We recently published a new white paper in the TGI Resources Library. TGI’s Extending CRM Concepts in ERP Systems white paper discusses the necessary software features an ERP system must deliver to go beyond basic contact management and extend CRM concepts throughout the enterprise. By selecting an ERP software solution that is capable of meeting such criteria, manufacturers and distributors alike will be able to arm themselves with a set of software functionality to improve customer service and satisfaction and meet individual customer’s requirements on an on-going basis.

Click here to download the complete white paper from the TGI Resources Library.

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Small Business ERP Software: Calculating Concurrent ERP Users

Wednesday, June 9th, 2010 by Alex Smith

Virtually every small business with whom I speak has questions about how to calculate concurrent ERP system users as they evaluate various small business ERP software solutions. Many small businesses have difficulty in making this assessment due to the fact they currently use a number of different software systems across each of their organizations’ departments. Read More…

Before I go any further, let’s take a look at the difference between “named users” and “concurrent users.”

Named Users: Named users would be all users who would ever require access to the ERP system. Whether the user accesses the system once a day, twice a day, or uses the system all day long is irrelevant.

Concurrent Users: Concurrent users would be the total number of named users accessing the system simultaneously (concurrently).

On one hand, small businesses will overestimate the number of concurrent user licenses they should be purchasing because they do not know or understand the distinction between “concurrent users” and “named users.” They are under the impression that any person who ever uses the system at any point in time would have to count as a concurrent user rather than a named user, leading to inflated cost estimates and proposals from ERP software vendors.

Conversely, small businesses will underestimate the number of concurrent ERP system users at their organization because they are not used to having all business departments (accounting, sales, customer service, manufacturing, warehousing, shipping, receiving, quality control, etc.) operating on the same software platform.

Generally, when I speak to a small business owner who has questions about how he or she should go about calculating the number of concurrent ERP system users his or her business would require, I try to get the owner to think about the simple task of processing an order from start to finish. First, a sales representative contacts a prospect or customer about a product the business is offering. Then, the customer places an order either with the sales representative, an account manager, or a customer service representative. Procurement personnel purchase raw materials, ingredients, and/or components to make the product. The raw materials, ingredients, or components are then received into inventory. These items are then consumed in manufacturing to produce the finished good, and this finished good is then put away into inventory or immediately allocated to a sales order. The customer order is then picked, packed, and shipped to the customer. Accounting personnel then invoice the customer for the order. Some (hopefully short) time later, the customer pays the invoice, and accounting personnel process the payment.

Once I’ve gone through this somewhat simplified process, I tell the small business owner to think about each point in the process that would involve his or her employees entering information into the ERP system (either manually or with RF and barcode scanning devices). Finally, I tell the owner to think about the number of people who would need to be entering such information into the system simultaneously, on average. This number, in turn, is most likely the number of concurrent ERP system users the small business would have.

Obviously, the simple process of processing an order from start to finish as described above may be an oversimplification, as some businesses may require additional information to be entered into the system, such as quality control data, serial numbers, lot numbers, etc.

Fortunately, to assist businesses in calculating their number of concurrent ERP system users, TGI offers a free ERP software concurrent user estimator template. This template is part of TGI’s Software Selection Tool Kit. To download the complete version of TGI’s Software Selection Tool Kit, please click here.

Tags: ERP system, small business ERP software
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ERP Implementation Critical Success Factor: The Pace of the Game Can Dictate the Odds of Success

Tuesday, June 8th, 2010 by admin

For those of you who are NFL sports fans, you’ve likely noticed there are some NFL teams whose offenses produce better when they play in hurry-up mode – the way in which all teams play toward the end of the game when they’re behind and need to score rapidly. The current day Indianapolis Colts strike me as this kind of team. With Peyton Manning calling the plays from the line of scrimmage, the Colts’ players stay focused and execute in a highly-efficient manner. Read More…

Let’s contrast this to the slow, methodical, grind-it-out NFL offenses that take long periods of time and numbers of downs to get to the end zone. Sure, there are successful scoring drives that can take twelve to fifteen plays to completion; however, the more times a team has to snap the ball and run a play the more opportunities there are for issues to sneak in that stall or end the drive – a penalty, a turnover, or even one dropped pass or missed block can result in an unsuccessful drive.

From my perspective, ERP implementation and NFL offenses have a lot in common. They both require a variety of players with varying skill sets and experience levels to play their respective positions for a successful outcome. In the NFL, all of the players know their roles, and there is a sense of urgency to accomplish tasks in an expedient, highly-efficient manner, and measurable progress occurs. The same should be the case to ensure successful ERP implementations.

Players should be educated on what their roles are and how what they do fits into the overall plans for the ERP implementation. And, while I completely understand that personnel’s day-to-day responsibilities can get in the way of having sufficient time to devote to the implementation project, my recommendation is that by running the ERP implementation like a two-minute offense, key personnel will feel the sense of urgency to execute in a highly-efficient manner thus producing a successful outcome. To contrast this, if there is an expectation that a project can take as long as people want or has sufficient slack time in the project plan, there is a lack of urgency that keeps most personnel from prioritizing the time to accomplish what is necessary to produce a successful result with the implementation.

Tags: erp implementation, ERP Software
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Demand Forecasting within Enterprise 21 ERP: A Key Input for Successful Wholesale Distribution Inventory Management

Tuesday, June 1st, 2010 by admin

When small and mid-market distribution companies start considering that it might be time to evaluate and replace their existing wholesale distribution software systems, they’ll typically calculate a potential return on investment they strive to achieve. From my experience, the one area of tangible benefits that will dwarf all others comes from an overall reduction in inventory investment and associated carrying costs. Generally distributors can pay for the entire new distribution software system and associated ERP implementation costs based solely on the reduction in inventory. Strong ERP systems like TGI’s Enterprise 21 provide the information and processes to enable wholesale distributors to improve overall inventory management. Read More…

There are numerous information requirements when it comes to performing time-phased inventory requirements planning (distribution requirements planning, or DRP), including customer demand, inventory statuses, inventory management business rules, and procurement and supply chain management business rules (and production-related data and business rules for manufacturers). The area of focus for this article is on forecasting – specification of one’s best volume estimates as to the total requirements for finished goods to satisfy customer demand.

Within Enterprise 21, forecasts can be created externally and then imported into the system or can be generated within the system based on historical sales data. A forecast can be defined as granularly as for a specific product, customer, servicing facility (i.e., warehouse or cost center), ship-to geography, and sales person; or it can be at some higher level of aggregation (i.e., all customers receiving a given product from a specified facility, etc.).

When using the system to generate a forecast, one can specify the number of periods to forecast, whether or not to apply seasonality to the forecast, one or more facilities, products, vendors, and buyers, and a range of dates to use for historical sales demand purposes. When the forecast generation process is run, Enterprise 21 analyzes the historical sales demand data and a series of algorithms to determine the best fit formula on a product-by-product basis. Forecast generation can be done separately for subsets of the product mix and then an overall forecast can be created by overlaying these separate sub-forecasts.

Once the system completes the forecast generation process, one can view a graph of historical and forecasted data and the associated best-fit algorithm (i.e., line, curve). Also, the forecast can be reviewed and adjusted manually as desired.

It is common for distributors to work with a series of forecasts such as ones that depict worst-case, best-case, and most likely-case scenarios respectively. A forecast can be used as one of the key inputs to a time-phased inventory requirements planning process for the generation of a series of purchase requisitions for the procurement of finished goods in the case of wholesale distributors (and components and/or ingredients to support production plus a tentative production schedule which ultimately becomes the master production schedule for manufacturers).

By using Enterprise 21’s fully-integrated planning process, wholesale distributors can generate forecasts which are an essential input to the time-phased planning process which becomes a key enabler to reducing and optimizing the distributor’s overall inventory position. Please click here to see a high-level overview demo of Enterprise 21’s forecasting and planning processes from within TGI’s Resources Library.

Tags: erp implementation, forecasting, Wholesale Distribution Software
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Visit TGI at the IDDBA 2010 Show and Expo – June 6-8, 2010 in Houston, Texas

Monday, May 3rd, 2010 by Alex Smith

We are very excited to be exhibiting at the International Dairy Deli Bake Association’s annual show and expo for the fourth consecutive year. IDDBA 2010 will be held June 6-8 in Houston, Texas. TGI representatives will be on hand at Booth #3555 to offer product demonstrations of TGI’s Enterprise 21 ERP software for show exhibitors and attendees. If you plan to exhibit at or attend IDDBA 2010 and would like to schedule a product demonstration while at the show that focuses on your business’s unique software requirements, you may complete a brief form on our IDDBA 2010 show event page or contact us directly. Read More…

Enterprise 21 ERP Software Functional Highlights for the Food and Beverage Industry:

Lot Tracking and Traceability
Shelf-life and Expiration Date Tracking
Inventory Management
Warehouse Management
Manufacturing
Scalable Batches
Formula and Recipe Management
Multiple Units of Measure and Unit of Measure Conversions
Catch Weight Processing
Compliance and Product Recall Management
Order Management
Purchasing
Shipping and Receiving
EDI
CRM
Financial Management and Accounting

Additional Resources and Links:

Tags: ERP Software, food distribution software, food manufacturing software
Posted in Process Manufacturing Software | Comments Off on Visit TGI at the IDDBA 2010 Show and Expo – June 6-8, 2010 in Houston, Texas

Enterprise 21 ERP: An Ideal Food ERP Software Solution for Producers of Gourmet Sauces, Stocks, and Concentrates

Tuesday, April 20th, 2010 by Alex Smith

A recent article in Bon Appétit magazine highlighted five companies’ alternatives to “homemade” chicken broth. Interestingly, two of the five food processors featured in the article run TGI’s Enterprise 21 ERP software, including More Than Gourmet, a producer of gourmet French stocks and French sauces, and Savory Creations International, maker of Savory Choice Liquid Chicken Broth Concentrate. Aside from the fact that Enterprise 21 is a fully integrated ERP system, there are a number of features in Enterprise 21 that make it an ideal food processing software solution, particularly for makers of stocks, sauces, pastes, and concentrates. Read More…

Lot Tracking and Traceability. Integrated food traceability software functionality is a must for any food processor. Enterprise 21 tracks the lot numbers of ingredients and materials received into inventory, the suppliers who provided the ingredient lots, when these lots were consumed in manufacturing, the lot numbers of finished goods produced, and all customers who were shipped a given lot of a given product.

Multiple Units of Measure. Enterprise 21 allows organizations to establish global or product specific unit of measure conversion factors. Food processors and distributors can purchase, manufacture, stock, and sell ingredients and/or products in any unit of measure.

Formula and Recipe Management. Enterprise 21 gives food processors the ability to meet their desired formula and recipe requirements. Enterprise 21 supports multi-level formulations while also providing for ingredient substitutes for a given formula. In addition, each formula can have one or multiple manufacturing routings that consist of a series of steps and instructions to be followed during batch production.

Scalable Batches. Food processors can leverage Enterprise 21’s integrated manufacturing software capabilities when producing varying batch quantities. Enterprise 21 can automatically scale required ingredients in a formula or recipe for large or small production batch sizes.

Quality Control. Enterprise 21 supports the establishment of quality control procedures for food processors and distributors to ensure the highest levels of product safety. Ingredients can be set to be placed on quality hold each time they are received into inventory. Similarly, finished goods can be set to be put on quality hold each time they are produced before they are released into available inventory for customer orders.

In addition, quality control personnel can enter test values for ingredients and finished goods directly into Enterprise 21, release ingredients and/or finished goods from quality hold, or reject ingredients and/or finished goods that do not meet desired product specifications.

Shelf-life and expiration date tracking. Food processors and distributors can leverage Enterprise 21 ERP software for both first-in, first out (FIFO) and first expiry, first out (FEFO) inventory management. Under a FEFO inventory management methodology, Enterprise 21 can automatically allocate specific ingredients and/or finished goods in inventory for production or customer shipments that are nearest to their expiration date to prevent ingredients and finished goods from expiring while in inventory.

Furthermore, should an organization’s customers have guaranteed minimum shelf -life requirements, Enterprise 21 can automatically allocate those items in inventory that will meet each customer’s unique shelf-life requirements on a product-by-product basis.

Production Scheduling and Reporting. In the Enterprise 21 ERP system, production schedules can be created manually or generated automatically. Production schedules can also be re-sequenced with a drag and drop user interface with the system automatically checking for machine and labor availability.

Following production, production quantities can be recorded and measured against their standard (or anticipated) production quantities. Enterprise 21 then monitors actual vs. standard production output to provide the organization with sophisticated material planning capabilities.

Tags: ERP Software, food processing software
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ERP Selection and TGI’s No Maintenance Fee Increase Guarantee

Thursday, April 15th, 2010 by Alex Smith

In addition to functional requirements, there are a number of cost-related questions to ask potential software vendors during the ERP selection process, such as: Read More…

1. What is the cost of software licenses? Are software licenses sold on a named user or concurrent user basis?
2. What is your average implementation services-to-software cost ratio?
3. Is the software sold on a module-by-module basis, or is it sold as an all-inclusive ERP software product?

A few important questions that are often missed or overlooked during the ERP selection process, however, are:

4. When do you start to charge new customers for annual maintenance?
5. What is your annual maintenance fee, and how is this maintenance fee calculated?
6. What was your annual maintenance fee five years ago?
7. Are software upgrades and future software releases included in your annual maintenance fee?

Questions 4-7 are crucial to the selection process because they can serve as a basis for the selection team to determine not only the most cost-effective short-term ERP solution but the most cost-effective long-term ERP software solution as well. The selection team must have a reasonable understanding of the future costs associated with purchasing the ERP product for the years following ERP implementation.

At TGI, we offer one year of free ERP maintenance from the date of software installation. Given that an ERP implementation may take between three and nine months to complete, we believe our customers should not have to pay maintenance on a software product when they are not using the software in a live transaction environment.

Perhaps more importantly, TGI provides a No Maintenance Fee Increase Guarantee. We guarantee, in contract writing, that we will never increase the annual maintenance fees charged to each of our customers. This guarantee is designed to provide our customers with a consistent, expected yearly software maintenance expenditure that is free from unanticipated increased fees associated with their software maintenance agreement. We are very proud of the fact that we have never increased our customers’ annual maintenance fees since TGI was founded in 1990.

Why is this guarantee important?

Referring to questions 5 and 6 above, should there be a difference in the maintenance fees an ERP vendor charges its customer today versus five years ago, and the vendor does not provide price protection on their software maintenance agreement, a manufacturing or distribution organization may be subject to escalated software maintenance fees over time. The end result of these unexpected maintenance fee increases could mean that the organization will be forced to allocate funds to their annual software budget that would have otherwise been used for investment in other potential business endeavors.

At TGI, we believe increasing our customers’ annual maintenance fees over time is not the right way to establish long-term partnerships with our customers. As such, we have not and will not increase the maintenance fees we charge our customers over any period of time. Guaranteed.

For a complete listing of questions to ask potential ERP vendors, click here to download TGI’s “50 Questions for Every ERP Software Suppler” white paper.

Tags: erp implementation, erp selection, ERP Software
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Archive for 2010