The number one demand of ERP users is 'agility' - but why are so many businesses choosing ERP solutions that don't measure up?
Any business should be aiming to win, but not investing in the right technology is like a sprinter eating fried chicken: it works for Usain Bolt, but most runners will become slow and out of shape. Agility is the number one demand of ERP users, but it's not always delivered- when demands aren't met, businesses are fearful about making the jump and investing in an entirely new solution.
With a spotlight on the food industry following the horsemeat saga and, in China, rat meat scandals, food manufacturers are increasingly aware of the need to respond quickly to any stock queries. This means good visibility, traceability and adaptability are all essentials for food and beverage wholesalers. Yet there is still hesitation by many manufacturers to adopt ERP solutions - much to their detriment.
Learning from the competition
Any sportsman knows that the best way to improve is study the competition - and examples from other sports, too. In the same vein, it is not merely food manufacturers that are making mistakes by failing to progress.
One particular case saw IBM being sued by chemical products manufacturer Avantor Performance Materials as the SAP-based ERP software IBM claimed to be suited to Avantor's chemical products manufacturing systems was “woefully unsuited’. While IBM's claims may have been exaggerated, not checking the IT estate was a key error on Avantor's part, leading to huge financial and reputational deficits for both parties.
The lesson to be learned here is that any business should have software suited to the job - and technology which enables them to react swiftly to changes in circumstances to prevent losing time, money and public trust.
We call this business agility – a quality which has evolved from a preference to a crucial business practice. Now enterprises, large and small, must adopt business agility to react to the rapid real-time environment.
5 key checks for a truly agile distribution-focused ERP solution:
There are five key areas manufacturers, distributors and wholesalers should examine when assessing an ERP solution:
1. Real-time business intelligence
Just as the milliseconds of a race can make the difference between first and second place, in a fast-paced business world technology can give companies the edge. Accurate sales forecasting enable wholesalers instant overviews of stock, while also providing predictions for future customer demand. The foresight provided prevents over- or under-stocking, both of which problems can prove costly.
2. Cloud ERP: Regain control and visibility over warehouse and transportation
The advance of technology solutions such as the Cloud and Software-as-a-Service are elements any manufacturer or wholesaler should consider adopting. The flexibility and scalability provided by Cloud-based ERP systems enable business decisions to be made regardless of location, while accurate business process analysis can be made at any point in time without in-depth reports taking many costly hours to create.
Real-time order and delivery information can be input and viewed from mobile devices reduce warehouse and transportation costs as a move to paperless working provides instant data without time-consuming paper-based processes. Critical tasks can be optimised for streamlined processes, too - saving time on regular tasks by automation reduces cost and minimizes the margin for error.
3. Leverage mobile technology
Modern ERP systems allow for sales representatives to submit any changes to an order with a few clicks on a smartphone app, sending a fleet of required actions right down the supply chain. Reducing the need to be tied to an office provides many opportunities for increased flexible, non-location specific working, and helps warehouse staff delegate to those on the floor for instant task completion.
4. End-to-end automation
Automation is one of the most rewarding qualities of ERP. Business activities such as payroll can be integrated and automated, allowing for extra capacity of other tasks. Greater visibility and traceability of ERP systems means that data can be collected from every area and quickly converted and presented, allowing business leaders to make the best decisions, instantly.
5. Reducing inventory wastage
The value of any wholesaler or manufacturer's business lies in their inventory. Wastage of stock isn't just about over-stocking based against poor predictions on customer demands, however. Understanding how much stock is lost through damage or loss in the manufacture or delivery processes enables decision makers to see exactly where losses are affecting the business. A small breakage or loss here and there may not seem much - but loss of inventory is loss of profit. An ERP system enables stock controllers to see exactly how inventory is treated and assess where business processes can be improved to prevent future losses.
To find out more about choosing the right ERP solution, download our free and impartial guide: Choosing the right ERP and accounting software.