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Archive for February, 2010

New ERP White Paper: Five Critical Software Requirements for Improved Product Safety and Traceability

Thursday, February 25th, 2010 by Alex Smith

We just released a new white paper in the TGI Resources Library, Five Critical Software Requirements for Improved Product Safety and Traceability. Given the rise of increasingly stringent FDA and USDA regulatory requirements, companies in the food, beverage, chemical, and pharmaceutical industries are being forced to change their internal business processes and leverage new technology to help them meet evolving industry compliance requirements for product safety and lot traceability. TGI’s Five Critical Software Requirements for Improved Product Safety and Traceability white paper details the necessary ERP software features and functions required for organizations to ensure the highest levels of product safety while simultaneously gaining real-time access to ingredient and finished good lot information. To download the white paper from the TGI Resources Library, please click here.

Leveraging Your ERP System for Continuous Business Improvement

Tuesday, February 23rd, 2010 by admin

So, you’re an owner of a small to mid-market manufacturing or distribution company. Your business is making a nice profit and you’re pleased with your personal earnings from the venture.  Even so, it’s not time to rest on your laurels and be satisfied with the status quo.

Every day, there’s someone out there who wants to eat your lunch. It could be an existing competitor who wants to get the upper hand, or it could be someone with a new idea to turn your industry upside down. Whatever the source of the threat, it is real, and it is coming.

Thus, it is imperative to make on-going adjustments in your business for purposes of continuous improvement unless you want to wake up some day to be the person wondering, “What hit me?”’

There are so many manufacturing and distribution businesses we walk into where “that’s just the way we do things around here” is a widely-used term. For example:

  • We always buy substantially more product than we need at the time because we get an additional discount from our supplier.
  • We always have three people sequentially check the same order and its pricing before it is billed so our customers always receive a clean invoice.
  • We couldn’t possibly require the receiving people to record lot numbers because it will hurt their productivity.
  • We allow our customer to buy a full container of product and pay us for it over a twelve month period, even though the customer sells all of the associated product in six months and is using us as their bank for interest-free money for the last six months.
  • We aren’t interested in going out and finding any new customers; we have more than enough business from the two big customers we’re already working with.

These are but five of the countless statements we’ve heard over the past several years about why businesses do quirky things – just because, “that’s the way it’s done here.”

Every day in business is a new opportunity to change old ways and to make improvements that can lead to improved operational efficiencies and customer service.  No one can afford waste in their businesses.  Customers are unwilling to pay a premium for your products to absorb your excess costs because you’re doing things the way they’ve always been done.

You’re encouraged to challenge the norm by setting up continuous improvement teams and rewarding your personnel to cut waste and streamline business processes.  And, assuming you have a high-quality manufacturing or distribution software system in place like Enterprise 21 in which data and metrics are available for ease of access and analysis through fully-integrated decision support and workbench technologies and are working with a software vendor like Technology Group International who is seen as a strategic partner to many customers bringing best-practice experience from working with a myriad of small to mid-market manufacturing and distribution customers, your ERP system can be a key enabler for your company’s continuous improvement efforts.

Technology Group International is such a strong believer in continuous improvement that we perform return on investment (ROI) workshops with our customers some six to twelve months after their initial Go Live with TGI’s Enterprise 21 ERP software. During an ROI workshop, the customer reviews key business practices from across their enterprise and how they’re using Enterprise 21 in those situations.  While there are numerous recommendations as to how the manufacturer or distributor can take better advantage of the software they’ve already bought, some 3-5 key elements tend to emerge for improvement out of the workshop that can help the given manufacturer or distributor derive substantial incremental ROI with the software they’ve already installed.

Food Manufacturing Software: What Software Features Can Improve Product Traceability?

Tuesday, February 16th, 2010 by Alex Smith

The Institute of Food Technologists (IFT) recently submitted a report to the FDA that discusses various ways in which food manufacturing software solutions and other technology tools can aid food processors in achieving more comprehensive ingredient and finished good lot traceability. For food manufacturers engaging in an ERP selection project, there are two primary functional requirements an ERP solution must meet to provide the food processor with the ability to track ingredient and finished good lots accurately and efficiently.

First, an ERP manufacturing software solution must provide both forward and backward lot traceability functionality. The system must be able to track the lot numbers of all ingredients received into inventory, when these ingredients were received, when these ingredients (and their associated lot numbers) were used in manufacturing, the lot numbers of the finished goods that were produced with these ingredient lots, and which of the food processor’s customers were shipped a particular lot number for a finished good. Such functionality gives the organization complete visibility to a particular lot of ingredient from a supplier from receipt into inventory and consumption in manufacturing to finished good shipment to a customer on a specific customer order. In the event of a product recall, system users must be able to generate lot history reports from directly within the ERP system to provide to the FDA and any other regulatory agencies to aid in the recall process.

Click here to watch the Enterprise 21 lot traceability demo.

Secondly, the food manufacturing software solution must deliver a fully-integrated wireless warehouse management system with RF and barcode scanning capabilities. By selecting a manufacturing software solution that provides the organization with the functionality to deploy RF and barcode scanning devices for use in inventory, manufacturing, and shipping operations, food processors can see improvements in ingredient and finished good lot data accuracy. Using such technology, lot codes can be generated automatically and barcodes applied for receipt of ingredients into inventory, finished goods produced and placed into inventory, and finished goods shipped to customers. An employee in the shipping and receiving or manufacturing department would simply scan the barcode and enter the quantity received, produced, or shipped – the system would automatically identify the lot number(s) for the items and store the data, reducing the likelihood of inaccurate ingredient or finished good lot information. As a side benefit, food processors can achieve improvements in overall warehouse productivity as a result of more streamlined picking operations and faster data entry with the use of RF and barcode scanning devices.

By selecting a manufacturing software system with fully-integrated forward and backward lot traceability and wireless warehouse management technology, food processors can strengthen their overall level of ingredient and finished good lot traceability while simultaneously improving ingredient and finished good lot data accuracy.

Wholesale Distribution Software: Leveraging Order Frequency to Increase Sales Revenue and Improve Customer Satisfaction

Tuesday, February 9th, 2010 by admin

Who is your worst customer?  If you are like most wholesale distributors and were to ask this of your inside sales team, they could probably tell you without blinking an eye.  “It’s ‘Fred’ – he’s always complaining and griping.  He just never seems satisfied.”  However, from a management team perspective, ‘Fred’ is a great customer.  He places consistent orders with you at a strong profit margin.

Does the following scenario sound familiar?  You and your sales team are having a monthly sales meeting.  It’s the middle of the month, and you’re reviewing the sales results for the prior month.

You look at the results and there’s one of your biggest customers – The ABC Company, who typically does $250,000 sales per month – showing last month’s revenue at $30,000.  You wonder what has happened to The ABC Company’s business.  It could be that The ABC Company’s business is slow; however, with this dramatic reduction in order activity, it is quite possible that one of your biggest customers may have gotten sufficiently annoyed with you that they quietly took their business and went elsewhere.

So, is there a way for wholesale distribution software to programmatically help prevent this from happening?  With TGI’s Enterprise 21 ERP software, the answer is absolutely!

Using Enterprise 21’s fully-integrated customer relationship management functionality, a customer order frequency value can be established for each customer.  Let’s say in this example, the order frequency for The ABC Company is set to 10 days.  Should we not receive an order from The ABC Company by the evening of the 10th day from their previous order, the Enterprise 21 system will automatically generate an alert notification to the parties you’ve specified in the system – the sales rep, the CSR, the inside sales rep, etc. – alerting them that this customer has not ordered within normal order frequency and that a follow up call needs to be made to them.

By proactively contacting this customer, you should hear one of three things from The ABC Company:

  1. We have been consuming your product at a slower than usual pace.  We’ll be placing an additional order with you in the next couple of days.
  2. We got busy and forgot to place our order.  You really saved us from getting too low on the stock of your products.  Let’s place an order right now.  We really appreciate you looking out for us.
  3. We were really displeased with how your company handled (fill in the blank) and we have been considering taking our business elsewhere.

In all of these cases, you have the opportunity to positively impact this customer’s satisfaction with your business.  Assuming you have effective problem resolution in place (a topic we’ll address another day – for now, see Service Management), numerous studies have shown that you can achieve higher customer satisfaction levels by resolving customer issues than with those customers who have never experienced any issues with you.

Order frequencies can also be set at a customer-product level, where, for example, some products or classes of products are ordered by a given customer every 10 days while other products or product classes are ordered every 30 days.

So, let’s rewind and go back to the monthly sales meeting.  In this case, The ABC Company has monthly revenue of $240,000 for the month.  When asked why their revenue had fallen off for the previous month, the sales rep can describe the issue that had occurred, how it was resolved, and the customer’s satisfaction with that resolution.  This is a far better scenario than the meeting where The ABC Company’s revenue was $30,000 for the prior month, may be $0 for the following month, and the assigned sales rep is looking for a new job by the next monthly sales meeting.

Nobody likes negative surprises.  And, wholesale distributors running Enterprise 21 will be able to discover and correct customer issues and keep sales revenue high and improve customer satisfaction through the use of Enterprise 21’s CRM software functionality with built-in order frequency features.

ERP Selection: The Importance of a Quantitative ERP Software Selection Process

Tuesday, February 2nd, 2010 by Alex Smith

The ERP selection process is one of the most important activities in which an organization engages. Selecting an ERP system represents a technological and business process transformation for the organization; therefore, it is imperative that the organization conduct a thorough, quantitative analysis of various ERP software companies and solutions. In doing so, the business’s software selection team can gain a true “apples to apples” comparison of each software solution and determine which solution offers the best functional fit for the organization.

To help manufacturers and distributors in this process, TGI’s Software Selection Tool Kit offers, among other resources, software demonstration script templates and grading sheets to be used for onsite ERP software demonstrations. The selection team can use these templates to develop a software demonstration script that reflects the key software requirements of the organization. The selection team would then distribute these scripts to a select group (usually 2 or 3) of vendors with sample data (products, parts, ingredients, vendors, customers, etc.). The software vendors, in turn, would use the supplied sample data to follow the demonstration script prepared by the selection team. Using the software demonstration grading sheets contained in TGI’s Software Selection Tool Kit, the selection team can score how each vendor performed for each task in the demonstration script. Following the final onsite software demonstration, the selection team can compile scores for each ERP software vendor and see, quantitatively, how each software solution compared to the other demonstrated software solutions. The end result of this process will be a software vendor and solution that outscored and outperformed the other software solutions that were demonstrated.

By requiring software vendors to follow a demonstration script that reflects the organization’s key software requirements, the selection team will be able to see first hand how each vendor can meet those requirements. This process also prevents the software vendor from shying away from a specific software requirement that it knows it won’t be able to meet and ensures that each software vendor was evaluated in a consistent manner.

To download TGI’s onsite software demonstration templates and grading sheets, please click here.