TGI - ERP Software Solution

Main Menu

Posts Tagged ‘ERP Software’

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.


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.


Buying a fully-integrated ERP software suite vs. a best-of-breed solution approach

Friday, December 25th, 2009 by admin

This article will explore the relative advantages of acquiring and implementing a fully-integrated ERP software system rather than buying application software based on a best-of-breed solution approach.

A typical manufacturing or distribution enterprise will need the following types of functionality:

  • Financial management and reporting;
  • Inventory management, purchasing, and order management;
  • E-commerce;
  • Customer relationship management;
  • Manufacturing planning and execution;
  • Warehouse management;
  • Forecasting and planning; and
  • Decision support and business intelligence.

While one could buy subsets of the above list from separate vendors, here are some of the disadvantages to buying this functionality based on a best-of-breed approach:

  • Separate systems with separate infrastructure – separate database instances potentially requiring separate servers.
  • Different look and feel for various applications – users would have to learn different sets of commands and menu structures for different applications.
  • Sharing of data across separate systems – passing of data would generally be done via a batch process.
  • Timeliness of data across the enterprise – even if the data were shared perfectly across the separate systems, there would be time delays between the time data is initially present in one system and when it becomes visible in the other system.
  • Single version of the truth for the entire business – when data is not fully in-sync, there can be differences of opinion as to whose data is correct (i.e., what were the monthly sales figures for customers in a given category or geographical region?).
  • Everyone in the organization works from the same set of information – provides visibility to data from across the organization to make well-informed decisions that impact customers and the organization as a whole.
  • “Least common denominator” for functionality – often an overlooked point in discussion of this topic. There can be some enhanced functionality in one of the functional areas that is the reason the business decided to buy that specific best-of-breed solution in the first place; however, the functionality and data needed from other functional application areas to support and enable that functionality may not be present or easy to access in those other modules, making the new functionality impossible to use.

The following describes the spectrum of integration methods for enterprise-class application software:

  • Fully-integrated system – designed and built from the ground up as an integrated whole all by the same software development organization and team.
  • Separate systems that are owned by the same software vendor – software vendors may have acquired separate systems and developed integration points between these solutions.  In general there would be separate development teams for the various solutions within the given software development organization. The development teams’ primary focus would be on functionality and ease of use enhancements within their specific product lines, not the integration points between various solutions.  There could be a third, totally separate development team for an integration solution from the software vendor.
  • Systems from different organizations that work together – similar to systems that are owned by the same software vendor above, except in this case the separate development organizations focusing on the separate solutions are not owned by the same parent organization.  As you might imagine, this further complicates matters.  One solution provider may elect to change their complete database schema from one software release to another thus disabling any existing integration points. This approach also poses problems for the upgrade process, software vendor roles and responsibilities, and paying maintenance fees to multiple software vendors year after year.
  • One-off integrations by systems integrators – in this case, a systems integrator who is implementing one or more of the software solutions for a given customer may have developed an integration point between two solutions.  In this case, the systems integrator is the only one concerned with the integration – not the development organizations who own the separate software solutions.  This is the most precarious situation of all of the non-fully integrated solutions scenarios.

Core advantages of fully-integrated systems:

  • Data is timely and accurate across the entire enterprise with single points of data entry.
  • Training of personnel in one functional area can translate into other functional areas because the usability aspects of the system as well as core functions (creating new items, querying for data, etc.) will be the same across all areas of the application suite.
  • Single version of the truth – by having one centralized system, data will be the same for the entire enterprise.
  • Integration between functional areas will be the strongest and will be in the best position to enable a company to implement version upgrades as they become available without risking invalidating an integration point between two separate systems.
  • Should be able to take advantage of all functionality in the system without concern about running up against a “least common denominator” situation where functionality in one area of the system may be unusable because corresponding functionality and data may not exist in other functional areas of the business system.

It has been my experience over the years that most organizations who have adopted a best-of-breed approach have not done so based on a strategic decision; rather, they have had a core set of functionality they have decided is the starting point for ERP selection and implementation purposes of a new system.  Rather than focusing on a superset of functionality they will likely ultimately need over time, they may have made a decision to go with an ERP software package that fit the core subset of capabilities very nicely at a price point that was substantially lower than fully-integrated solutions with broader capabilities.

Over time, however, the business outgrows the functionality originally selected and implemented and is now forced to make a decision of whether it wants to keep its existing software and add a bolt-on solution to what it already has or start over and go with a broader, fully-integrated ERP solution.

Organizations are strongly encouraged to step back and ask themselves where they are going strategically and what complete set of functionality they will ultimately need over time so they can buy a fully-integrated software suite that provides this complete set of functionality even if they don’t take advantage of all of its capabilities day one.


It’s 3:00 in the afternoon. Do you know where your ERP software support team is?

Friday, December 11th, 2009 by admin

Over the past 6+ years, we’ve heard a lot of questions asked by a lot of different manufacturing and distribution organizations evaluating ERP software systems.  While the great majority of the questions are predictable and heard over and over, there have been a new set of questions that have surfaced recently that are now being asked consistently from prospect-to-prospect.

Do you outsource your customer support services?  Where does your customer support team reside?

These questions have largely arisen in the past six months or so.  Companies can’t afford to spend a substantial amount of time and money to select their preferred ERP software solution followed by another 3-9 months for implementation (depending upon the size of the business) only to realize their new software vendor’s support has been outsourced to a third-party organization who can hold the customer hostage for the long-term use of the new solution.

In many cases when support has been outsourced, those third-party organizations may have elected to move those services offshore to reduce the expense of providing such support.  In these cases, there can be language barriers to effective support, and the offshore support may be unfamiliar with commonly-used manufacturing and distribution industry terminology in the United States and Canada which further compounds the issues.

In TGI’s case, 100% of our implementation and support services for our Enterprise 21 software suite are delivered by full-time TGI employees who work out of our corporate headquarters in Toledo, Ohio.  Enterprise 21 is developed, sold, implemented, and supported exclusively by TGI, and we intend to keep it that way.  That’s what our customers can expect from TGI.


Visit the New TGI Resources Library for Enterprise 21 Demonstrations, Software Selection Tools, and more

Monday, November 9th, 2009 by Alex Smith

We recently released the TGI Resources Library. Aside from being able to access Enterprise 21 ERP software demonstrations and view past TGI webinars, one of the most useful aspects of the TGI Resources Library is that it gives site visitors immediate access to all of TGI’s ERP selection resources, including the complete version of TGI’s Software Selection Tool Kit. The tool kit is designed to provide software selection teams with the necessary resources for conducting a thorough, well-structured ERP selection process with a comprehensive and quantitative analysis of various ERP vendors and solutions. From the SSTK Downloads page, site visitors can download any of TGI’s software selection resources individually or download the complete Software Selection Tool Kit as a single executable file. With the conclusion of 2009 rapidly approaching, manufacturing and distribution organizations who plan to select a new ERP system for implementation to begin in early 2010 can leverage TGI’s Software Selection Tool Kit as a guide for their software evaluation projects.


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.

Screen shot 2009-09-16 at 8.33.04 AM

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.

Screen shot 2009-09-16 at 8.34.51 AM

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.

Screen shot 2009-10-08 at 12.39.07 PM

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.

Screen shot 2009-09-17 at 9.33.26 AM

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.


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?”


Go-Live Expectations

Monday, August 24th, 2009 by Alex Smith

The final step in the implementation process is the day of system go-live. On this day, the manufacturing or distribution organization will switch from its former software system to a new ERP software solution to serve as the transactional backbone of the organization. On this day, all of the company’s former problems will go away, 100 orders above the daily average will be processed and shipped, and worker productivity will increase, on average, 75%. This is what any company who has just completed a software implementation should expect, right? Wrong. Initial system go-live is a critical step in the migration from one software system to another, but it is unrealistic for the organization to expect that all of its troubles will be solved on the initial go-live date. What then, should the organization expect on the go-live date in terms of customer orders, worker productivity, and return on investment?

From a customer orders standpoint, the organization should expect to enter, pick, pack, and ship customer orders on the initial go-live date. We frequently hear terrible stories in the ERP industry of companies investing six to nine months of employee time and money in a software implementation only to go live and not ship orders for another two, three, or four days, causing complete chaos for customer service personnel and the organization’s customers. I can honestly say that in nearly twenty years of business, we have been very fortunate to have every one of our customers ship orders on their initial go-live date. With sufficient testing and training, there is absolutely no reason why orders should not be shipped on the go-live date. That being said, companies should also expect the volume of orders shipped on the initial go-live date to fall slightly below average. Issues (hopefully minor) will arise, questions will come up, and some employees will not have a full, 100% understanding of the new pick, pack, and ship process within the new system; however, things will improve, the process will continue to be practiced, and overall operations will become much more efficient over time. One of our customers had an average of roughly 300 orders shipped per day under their old system. When they went live in January 2009, orders shipped fell to below 200 the first day of system go-live (a Monday), climbed above 250 the following day, and reached above 300 by Wednesday. Within two weeks after go-live, the company was shipping nearly 500 orders per day. Again, companies should fully expect to ship orders on the initial go-live date but should also expect to see an initial decline followed by a steady increase in shipping volume over the following weeks.

The organization should also expect overall worker productivity to decline on the day of go-live and then steadily increase in the following weeks. The transition from one software solution to another is not always easy for or widely accepted by the organization’s employees. No matter how much training end users receive during the implementation process, they are always going to have a multitude of questions upon initial go-live. They will, however, learn how to perform their daily tasks in a productive and efficient manner with the new software solution and will more than likely become more productive over the course of a workday than they previously had been under the old software platform. Workers starting to use a new ERP solution are like toddlers – they need to learn how to crawl before they can walk or run.

Lastly, what can the organization expect in terms of return on investment on the day of initial system go-live? The answer, bluntly, is nothing. Realizing a return on investment for purchase of an ERP solution takes time. Some companies, depending on the nature of their business, realize a return on investment in a variety of different ways and over a variety of times. Larger organizations can achieve a sizeable return on investment by eliminating staff due to streamlined processes and operations under the new software solution. One of our customers, for example, was able to eliminate 30% of its customer service personnel within 4 months of go-live due to improved visibility to customer information and more efficient order processing. Smaller businesses can achieve a return on investment through increased productivity, reductions in employees’ time spent on a given task, and improved inventory accuracy and data integrity. Even the task of closing an accounting period can save a CFO hours of time using a sophisticated and fully-integrated ERP system. Organizations of all sizes can and should achieve a sizeable return on investment. Such a return, unfortunately, is not going to occur on the initial go-live date. For more information on calculating a return on investment for purchase of an ERP software solution, click here.

Initial system go-live is a critical step in the overall implementation process. Companies should be realistic with their expectations but should also demand reasonable results from their software supplier. Orders should be processed and shipped, and end users should be sufficiently trained to make it through the day.


The Small Business Software Rules: Add a Product, Upgrade Software

Friday, August 21st, 2009 by Alex Smith

I recently spoke with a small business owner who provided me with a piece of information I previously was unaware of. The small business owner said that his company had started running QuickBooks approximately three years ago when the business was just in its infancy. The business grew rapidly, increasing its customer base and its product offerings. One day, the business had reached a total of 3,501 products in its catalogue. When the QuickBooks user entered the 3,501st product, the software informed the user that the entry was invalid, as QuickBooks would only support a maximum of 3,500 total products. When the small business owner called customer support, he was told he needed to upgrade to QuickBooks Enterprise Edition to allow him to enter more products. I, needless to say, was shocked. Believing that his business was not ready to migrate to a more sophisticated distribution software system, the owner spent $3,000 to upgrade to the Enterprise Edition for the privilege of adding new products, which, according to the owner, was simply a waste of money.

This pricing scheme for varying degrees of standard software functionality should be a lesson to all small business owners as they consider migrating from their existing small business software to a more sophisticated ERP software solution. Owners should pay careful attention to a software solution’s pricing structure and the software’s limitations at each price level. By requiring software vendors to disclose the true cost of all demonstrated software functionality before contract signing, the small business owner will receive the most accurate cost estimate to be used for budget and ROI calculations.