Blogs: Posts http://www.epicor.com/sites/Blogs/Lists/Posts/ApprovedBlogPosts.aspx RSS feed for the Posts list. Sat, 18 May 2013 19:19:52 GMT Microsoft SharePoint Foundation RSS Generator 60 en-US Blogs: Posts http://www.epicor.com/sites/Blogs/_layouts/images/siteIcon.png http://www.epicor.com/sites/Blogs/Lists/Posts/ApprovedBlogPosts.aspx Four Steps to Managing Dead Inventory (Part 1 of 3) http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=18 Body:

Dead and slow-moving inventory is a harsh reality for all distributors. Proper management of dead stock is often ignored, but it is a task that requires specific action steps and careful planning. The steps involved in reducing your company's risk of being adversely affected by excess and dead inventory include: Identify, Prevent, Coordinate and Dispose.

Identify

First, decide when your inventory officially becomes “dead.” Twelve months of no sales is typically a good starting point. However, beware of seasonal items if using less than 12 months as your measure. Your trade association may also have specific recommendations.

Second, know the return policies for your suppliers. If your supplier has a return policy for items purchased under 12 months, the items need to be tracked from inception to non-moving status.

Continuously track your lot items about to expire. Make sure lots that will expire within two periods are either sold first, or returned to the supplier.

You can run an Inactive Items Report in your ERP system by a last order date, and/or last purchase date. Or create an ABC class that is set to 100% threshold.

  • Commonly, 12 periods of zero sales will be considered at 100% threshold and should be grouped into a “dead” class.
  • You can create multiple dead classes, such as a “going dead” class at 98.9% threshold, commonly known as “dead or dying.”
  • If you have seasonal items, be careful of “seasonal dead” items; i.e., items that are good movers, just not in the current period.

Once dead items are identified, calculate the inventory value, making sure to add your carry cost. This is easier to do if using the ABC Class method than the Inactive Items Report, because the Inventory Value Report exports to Excel, whereas the Inactive Items Report does not.

It is helpful to move dead items to a specific area of the warehouse. Making these items visible will remind employees to attempt to sell/negotiate when talking with customers. This is a good practice for seasonal items, as well, to make room for moving items.

In our next blog post, we will discuss the Prevent and Coordinate steps of dead stock management.

Posted by Neil VanWalbeck, Senior Professional Services Consultant at Epicor Software Corporation

Neil_VanWalbeck
Category: Distribution
Published: 1/29/2013 9:48 AM
]]> Web\svc_com-admprd Distribution Tue, 29 Jan 2013 17:50:51 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=18 Tips from the Experts on New Year's Resolutions for Distributors http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=22 Body:

When it comes to your business, setting goals is imperative. Unlike personal New Year’s resolutions that are often forgotten after a short time, successful companies stick to their goals with organizational discipline, top-down leadership and support, and systems of measurement. Goal execution becomes part of the culture for those who desire to thrive.

With that in mind, Epicor asked a number of thought leaders in the wholesale distribution industry for the top resolutions that distributors can't afford to ignore in 2012.  These experts recommended the following:

  1. Stop treating inventory as your competitive advantage
  2. Stop always saying “Yes” to all customers
  3. Stop allowing field sales to direct themselves

Making fundamental changes in the way you do business requires commitment, but achieving any one of these resolutions will put your distributorship on a better footing. Achieving all three will surely differentiate your business from the competition and open up new avenues for profitability. Read the complete briefing on these tips at: http://www.epicor.com/3resolutions/.

Category: Distribution
Published: 1/29/2013 1:28 PM
]]> mconlin Distribution Tue, 29 Jan 2013 21:28:46 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=22 Survey Says: Most Companies Lagging in Carbon Accounting Comprehension and Execution http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=23 Body:

Last week we announced the results of our first ever global carbon accounting survey. The goal of the survey was to gain insight into the ability and willingness of companies to identify their greenhouse gas emissions; to find out how they technically capture emissions; and to clarify the extent to which companies have to meet legal requirements for sustainability, as well as partner and customer demands in this arena.

The results – compiled from nearly 1000 companies surveyed across the globe – were pretty astounding. Fifty-eight percent of companies surveyed had not even heard of the term “carbon accounting”; less than a third could accurately describe what the term means, and a full 80% of companies surveyed don’t monitor their company’s carbon footprint.

So why are companies lagging in their comprehension of carbon accounting as a whole, and in the execution of said carbon accounting initiatives?

One reason is many companies see carbon accounting or energy management efforts as a distraction rather than something they can quickly and easily quantify. I also think there is some cynicism out there colored by individuals’ own personal opinions. Many people feel the whole carbon issue equates to acceptance of science behind global warming. Irrespective of your views on the science, if you choose not to believe it and bury your head in the sand, you do so at the risk of putting your organisation at a competitive disadvantage.  Legislation is here and if you are not mandated by it now, it will be coming your way.

Done right, carbon accounting can be a part of your normal course of business – not an extra task – and like other GRC initiatives; it has the potential to create process efficiencies for operational cost savings.

Another hurdle for carbon accounting is many companies don’t realize the significance of monetizing these efforts. What’s more, the trading of carbon credits is often way outside of their core business role. It’s a new skill set/competency that most people flat out don’t have – but expect to see the job market heat up over the next few years in The New Carbon Economy. Major financial institutions, including Goldman Sachs, Berkeley's and Citi Bank, already have carbon trading desks in London, the commodity market for carbon offsets, is the fastest growing commodity market in the world with companies buying and selling carbon credits like pork bellies or silver.

At the point when the economies of the world were in a more robust state, green initiatives and carbon were a lot higher up on both media and corporate agendas. But as the downturn took hold, organizations started looking inwards at themselves and less at their green credentials. However operational cost savings and a green corporate agenda are not mutually exclusive. By managing your operations in an energy efficient manner, there’s tremendous financial upside in the form of operational cost savings, and also possible increased revenues – not to mention compliance, as there’s going to be a “train” of increasing compliance requirements in this arena. We say – get ahead of the curve – start following it now. Compliance is actually a byproduct – you’ll actually save your company money and open up a whole new revenue stream.

Posted by Chris Purcell, Product Marketing Manager, Epicor

Category: Distribution; Retail
Published: 1/29/2013 1:32 PM
]]> mconlin Distribution; Retail Tue, 29 Jan 2013 21:44:12 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=23 The High Performance Model for Wholesale Distributors http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=24 Body:

The Million Dollar Opportunity

There is a million dollar opportunity in your business right now that doesn’t depend on the economy and has nothing to do with your competition.  It’s hiding in underperforming gross margin, cost inefficiencies and slow cash cycles.  It’s draining out of the bottom of your service offering through customer loss and constant internal service rework.  It’s pickpocketing your growth potential.  Yet, its elusiveness has become so ingrained in your day-to-day business that you resign yourself to accept this million dollar loss as the cost of your culture. “It’s just the way it is.”

The issue is not with your people or your technology.  What you are missing is a model that you can deploy quickly and effectively in your distributorship to claim these hidden dollars and transform your distributorship into the high performance business you know it was meant to be.

Processes and Deliverables

A distribution business is its processes.  There are three key processes in distribution that drive your performance:

  • Sourcing—the process of deciding from whom you buy and why
  • Fulfillment—the combined cross-functional process of your insides sales, purchasing and warehouse teams
  • Sales—the process of prospecting, engaging, acquiring and keeping customers.

(There are other processes in your business; Financial Management, IT, and Human Resources, for example.  But these processes are support functions and do not directly impact your business’ performance deliverables.) 

Processes have deliverables, and the three key processes above deliver performance.  The three high performance deliverables are:

  • Fundamental Financial Performance—profitability, cash flow and asset efficiency
  • Value Differentiation—logistics and account management
  • Sales Growth—revenue growth, customer retention, broadened product line, pricing, and customer creation.

In other words, a high performance distributor performs well financially, differentiates value, and grows. 

The Million Dollar Challenge

The high performance model for wholesale distributors is stated this way:

“The combined capability of sourcing, fulfillment and sales processes determines a distributor’s financial, value differentiation and growth performance.”

For the math-minded:

(c)X1, 2, 3= (p) Y1, 2, 3

where (c) is capability, “X” is key process, (p) is performance and “Y” is performance deliverable.

This model is a tool for you to use to make decisions and focus your improvement efforts to drive sustainable, meaningful results into your business.  If you have not tackled these three key processes and optimized their capability to deliver performance, then there is at least a million dollars’ worth of annual improvement waiting for you to claim in your business right now. 

Here are three high impact improvement projects you can execute this year to find the million dollars hidden in your business:

  • A coordinated attack on gross margin through sourcing and pricing actions should generate 1-2% of gross margin improvement.  That’s $500K-$1M to the bottom line for a $50M distributor.
  • Improving your fulfillment process capability and reducing the cash conversion cycle while simultaneously becoming the service leader in your market.  That means less inventory, higher fill rates, and significantly reducing rework.
  • Improving your sales management process and creating growth from the “inside out” in your company, by retaining current customers and broadening your product offering to them.  That’s more dollars to customers you simply refuse to lose.

Are you willing to invest focused and sustained effort working “on” your business instead of just “in” your business?  Use the high performance model to guide you to the million dollars hiding in underperforming processes, and make 2012 the year you find your million.

Posted by Andy Ray, Senior Business Consultant at Epicor Software Corporation

Andy Ray
Category: Distribution
Published: 1/29/2013 1:46 PM
]]> mconlin Distribution Tue, 29 Jan 2013 21:50:36 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=24 Reassessing the "Comfort Zone" of Your Homegrown ERP System http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=25 Body:

Why do you hesitate to consider a new software system for your distribution business?

There are several answers that immediately jump to mind: purchase cost, pain of transition, and short-term loss of efficiency in customer service. But each of these points can also be used to argue against remaining in the “comfort zone” of your current enterprise resource planning (ERP) system.

Maintenance costs are likely higher on your old homegrown system. Older machines require upkeep and upgrades to continue working properly at the maximum speeds available, and it becomes harder and harder to find support for the old operating system code and technology. But costs also appear in the form of maintaining a core group of knowledgeable employees who are the only ones at your company that fully understand your system. The time it requires to extract meaningful data for executive analysis out of your archaic database must also be included as a cost consideration.

The pain of remaining on your old system can be measured in many ways. There are business inefficiencies to overcome, work around or manually track, which are likely handled out-of-the-box by newer software programs. Gaps in your current software often lead to a patchwork of coded solutions that may address problems, but cause processing re-routes with multiple steps—again, less efficient than a newer program engineered to handle your business situations at its core. Your current system thus becomes larger in scope and harder to maintain.

There is also pain when training a new hire. Your old system may be familiar to your long-term employees, but it is quite foreign to a new generation of tech-savvy potential hires raised on Microsoft Windows and the Internet. The traditional character-based  interface is not going to be familiar to anyone who went to high school or college in the 2000s. This leaves you to fill positions at your company with more mature employees whose cost to onboard is certainly more than that of recent graduates.

Maintaining a high level of customer service is critical to retaining long-term customers, as well as winning new customers for life. A new system, designed specifically to provide exceptional customer service, can win and retain loyalty from your customer base. By contrast, your old system, with inefficiencies that require multiple call-backs, delays, and apologies, is not as attractive to new customers shopping for suppliers, and as the quality of services offered wanes, so does long-term customer loyalty. Lack of rapid access to required information also may be causing you to overstaff your customer service department, bringing the argument back to cost.

Is a transition to a new ERP system painful? Absolutely, but think of it like a knee replacement. You can limp along and compensate for the problems you have, being consistently hindered by what does not work, or have the surgery, endure that time of discomfort, and then learn to run better than before.

When you argue against a potential system switch with costs, pain, and efficiency concerns, remember to consider them as they exist in your current system. Staying put is not going to grow your business, and in today’s market, maintaining the status quo is not enough to keep your customer base happy. A system that offers a return on the investment you make, and uses today’s technology for greater processing efficiencies and access to business critical information, will help your distributorship thrive.

Posted by Dave Lusk, Industry Segment Manager at Epicor Software Corporation

Category: Distribution
Published: 1/29/2013 1:51 PM
]]> mconlin Distribution Tue, 29 Jan 2013 21:52:21 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=25 Is It Time to Review Your ERP System Settings for Inventory Control? http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=26 Body:

With the economy starting to make a comeback, your sales are hopefully increasing. Now is the time to review velocity numbers in your enterprise resource planning (ERP) system—because when sales increase, so does the forecast for the items, therefore increasing the velocity. Velocity should be reviewed every quarter to make needed changes until the economy stabilizes.

Next, look at the trend periods, as well as the average change per period. These settings dictate which items should be marked “trend.” For example, if you’ve been looking at the last five periods for when sales start to increase, but sales have actually increased for the last three, this would take much longer for items to be marked trend. By changing the setting to three periods, the item(s) would need to have an increase in sales higher than the average change per period, therefore possibly getting you to a trend pattern sooner.

Also don’t forget to look at the supplier cycle days and targets. As with purchases increasing from higher sales, these numbers need to be reviewed quarterly, as well.

Now is a good time to review your UPTO ABC classes and periods to supply, along with your thresholds and safety stock factors. You may want to examine and change all of these with increased sales.

Lastly, receipt periods to average for lead time are typically set to four periods. This should be reviewed and possibly shortened, as the lead times most likely are improving; thus a lower number of periods will reflect more current average lead time.

The settings discussed here only impact items set to a purchase replenishment of UPTO and/or EOQ, but they are still important to manually controlled Min/Max and OP OQ items, as well, for ABC classes and ranking.

It is strongly recommended that these and other system settings be changed in collaboration with an Epicor Professional Services Consultant, as every distributor will have their own specific business needs. There are also new features to learn about, such as safety stock by service level, where the UPTO and EOQ replenishment methods will calculate a safety stock for each item / location for you.

Posted by Neil VanWalbeck, Professional Services Consultant at Epicor Software Corporation

Category: Distribution
Published: 1/29/2013 1:52 PM
]]> mconlin Distribution Tue, 29 Jan 2013 21:53:25 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=26 Epicor Salutes Concordia Publishing House - A Baldrige Award Winner http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=40 Body:

Demonstrating an ongoing commitment to continuous quality improvement, Epicor customer Concordia Publishing House (CPH) has been named a 2011 Malcolm Baldrige National Quality Award winner in the Nonprofit category.

CPH is the St. Louis, Mo.-based publishing arm of The Lutheran Church-Missouri Synod (LCMS), and was founded in 1869 to provide members of the LCMS with Christian ministry resources for worship, education, and nurturing of their faith. Today, the company supplies over 8,000 products in a variety of formats and languages. CPH has a workforce of 247 employees and revenues of $35 million.

CPH uses technology including Epicor Enterprise solutions and Epicor Precise POS to support the building of customer relationships, provide superior customer service, and facilitate order entry and product distribution. CPH monitors market trends by collecting and analyzing data from its own customers, as well as customers of competitors, and then categorizing sales and customer data in a variety of different ways to identify relationships between certain product sales and types of customers.

CPH’s Customer Call Center, which is also integrated with Epicor Enterprise, has been recognized as a “Center of Excellence” by BenchmarkPortal (The Center for Customer-Driven Quality) every year from 2009 through 2012, and CPH was also recognized as a Best Christian Workplace in each of the last three years.

With the implementation of Epicor technologies in 2004, CPH’s standardization of business processes has greatly improved. For example, in the distribution area, the integration between Epicor Enterprise and CPHs “Pick-to-Light” packing system has enabled CPH to achieve a 99.85 percent accuracy level for orders shipped.

Other areas of performance excellence at CPH cited by the Baldrige examiners included overall customer engagement scores at 98 percent plus, positive financial results, a robust Vendor Certification Program, and overall workforce engagement exceeding the AAIM (formerly known as the American Association of Industrial Management for Employers Association) national benchmark in 7 out of 8 categories.

Epicor congratulates everyone at CPH for this impressive achievement.

Category: Distribution
Published: 1/30/2013 6:48 AM
]]> mconlin Distribution Wed, 30 Jan 2013 14:49:05 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=40 Reducing Shipping Errors through Automated Carton Packing http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=41 Body:

Do you have important customers that require special labeling or packaging information when you do business with them? Would it help serve your customers better to know what items shipped in what box?

Carton Packing functionality, now offered in Epicor® Eclipse® Release 8.7.3, allows distributors to efficiently and accurately capture the items and quantities shipped in each box/bag/bundle/pallet (a.k.a. carton), associate a unique ID to that carton, and label orders leaving the warehouse. At each step, logic exists to set defaults for the specific packing station, and required fields support barcode scanning to constantly minimize the amount of interaction that the packer needs to have with the mouse or keyboard.

Activity triggers are leveraged to allow users to configure actions that result in labels printing out automatically, with the right format to affix to the carton. Customer-specific product labeling requirements can now be seamlessly incorporated into the packing process, to reduce the cost of filling these orders to key accounts.

Will Call Queue users and Order Entry personnel can also quickly see carton-level detail, to provide better service to customers. For example, a customer service agent receives a phone call from the customer indicating that they didn’t receive product A. The agent quickly finds the order, sees which carton that product A was packed into, and can direct the customer to re-check in the box that also included Products B & C. If the customer did not receive Products B & C either, the agent can immediately re-ship all of the items from that box and research the whereabouts of the undelivered carton.

A distributor does not have to be using the Epicor RF Warehouse Management System in order to implement Carton Packing. Non-RF facilities can actually obtain some of the benefits of RF by leveraging wedge scanners in the packing process to validate that the item ordered is the same item that is being shipped.

RF facilities that deliver orders on their own fleet can take advantage of the RF Load Carton function, which directs the user in reverse stop sequence to scan each carton ID for each order on the manifest, to ensure that everything gets loaded on the truck. A planned future integration with the Epicor Proof of Delivery companion product will allow a Bluetooth-enabled carton ID Scan to validate the package all the way to its destination. 

Posted by Justin Ward, Product Manager at Epicor Software Corporation

Category: Distribution
Published: 1/30/2013 6:49 AM
]]> mconlin Distribution Wed, 30 Jan 2013 14:49:53 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=41 Do You Really Know Who Your Top Five Best Customers Are? http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=42 Body:

Here's an interesting exercise for any distributor: ask different people around your company who your top five best customers are.

Chances are you will get many different answers, depending on who you ask. Sure, most people in your organization can probably point to a handful of your largest accounts, but do they really agree on who your best customers are? By "best," we mean the ones that are high margin, high volume, and loyal customers with low cost to serve. In other words, which customers are the most profitable, high-performing accounts that drive your business forward?

I recently spoke with a distributor whose sales rep was seeking an additional discount for what he felt was a deserving customer. "They're a great customer," said the sales rep. "They're always calling in with new orders." The executive was hesitant. "That's just the problem," he stated. "They should be placing those low-dollar orders over the Web so they cost us less to process!"

And therein lies the problem: each person's perspective results in a different answer. Your CEO, CFO, Sales Managers, Customer Service Reps, and others all have varying opinions of who your best customers really are. No one has gone through the exercise to figure out each account's true cost to serve.

A number of distributors have tried Activity Based Costing in the past. I say "tried" because that's the response I hear most often; very few have been successful in maintaining such a program, citing complexity, time, and tedious activity as the main obstacles. The result is a general lack of understanding in the industry as to what percent of a distributor's overall customer base is unprofitable business.

In his book, Islands of Profit in a Sea of Red Ink, business consultant and MIT senior lecturer Jonathan Byrnes claimed that 40% of most businesses are unprofitable. The unprofitable portion of the company's business often goes unnoticed because it is subsidized by the company's top-performing customers. Surely, this can't be the case in distribution…can it? Can nearly 40% of your customers be unprofitable business?

One distributor I spoke with thinks so. He claimed that, after much research, they learned that 87% of their net profit was generated by only the top 5% of their customers, and that 43% of their customers represented only 2.5% of their sales. In other words, 43% of their customers were the kind of business they did not want to be doing. However, simply selling more product is not always the answer to improved business performance. If your cost to serve exceeds your margins, you're actually hurting your company by selling more.

Distributors need to invest in tools to better understand their customers' true cost to serve. Only then can decisions about pricing, shipping and deliveries, and other special services be made for specific accounts with the confidence that they're not going to erode your margins in the long run. Sometimes, your strategy is best defined by what you say "no" to. But you need the data to support those decisions.

Customer Profit Analyzer is a new solution from Epicor that provides distributors with a tool for understanding each customer's net profitability and true cost to serve. The application will segment and grade your entire customer base so you can finally agree as an organization who your best- (and worst-) performing customers are and why. Learn more about Customer Profit Analyzer.

Posted by Scott Frymire, Senior Manager of Product Marketing at Epicor Software Corporation

Category: Distribution
Published: 1/30/2013 6:49 AM
]]> mconlin Distribution Wed, 30 Jan 2013 14:51:41 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=42 Rewards Program Functionality for Distributors on Epicor Prophet 21 http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=43 Body:

Similar to Epicor’s existing offerings for retailers, version 12.9 of the Epicor Prophet 21 enterprise resource planning (ERP) system now offers new Rewards Program functionality for wholesale distributors.

The rewards program will allow a distributor to reward their customers for buying targeted items. The distributor can identify which items or groups of items to offer rewards on, based on product group, discount group, price family, or supplier, and can determine how quickly their customers will be rewarded for purchasing these items or groups of items.

A minimum purchase level may be specified, so that a customer will earn rewards only after attaining the minimum. And multiple rewards programs can be set up for the same items, with differing accumulation rates, so that more profitable customers are rewarded at a faster rate.   

Programs can require that a customer register before earning rewards, or generic programs can be established, as well, which are automatically offered to all customers without requiring registration in the program.

Two types of rewards are available for use:

  • Incentive points can be offered for purchases, which can be redeemed for other charge (non-physical) items such as training sessions or premium trips offered by the distributor.
  • Co-op rewards can be earned and then redeemed for credit for advertising expenses that the customer has incurred, based on the distributor’s/supplier’s guidelines for joint advertising. The redemption of co-op rewards will create a credit on the customer’s account.

Earned rewards can be viewed within Epicor Prophet 21, and can be printed on invoice forms, as well.  In the Customer Master Inquiry, all rewards programs that a customer belongs to can be viewed, and the user can drill into a rewards program to see the invoices that contributed to that customer’s earned rewards.  (Rewards are earned when an invoice is created, not when the order is taken, but the inclusion of the item in a rewards program can be determined based on either the order date or the invoice date.) A summary of available rewards can also be displayed on the distributor’s B2B Web site.

Posted by Laura Barnett, Principal Business Systems Analyst at Epicor Software Corporation

Category: Distribution
Published: 1/30/2013 6:52 AM
]]> mconlin Distribution Wed, 30 Jan 2013 14:53:00 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=43 ABC Classes for Inventory Categorization http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=44 Body:

ABC analysis provides a mechanism for identifying items that will have a significant impact on overall inventory cost. It refers to different categories of stock (A, B and C) that require different management and controls. In enterprise resource planning (ERP) software systems, it’s an area with so many options and features, it is often under used and/or abused.

Let’s dispel some myths about ABC classes, and explain the proper use of classes for good inventory management.

Classes and Inventory Turns

ABC classes are primarily used to control the order “UPTO” quantity when it is time to actually purchase the item—also commonly known as the inventory turn rate. ABC classes should be set by cost, or cost of sales. Why? Because most inventory models are based on the “80-20 rule”:

  • 20% of your inventory produces 80% of the cost of goods sold (yes, 80% annualized!).

So, the A class should be set to about a one-month supply or less, primarily because you want to carry fewer of these items, and purchase them more often. This will directly result in a higher inventory turn rate.

For B classes, you want to carry more, as the cost of these items is lower overall, so the cost to carry them is lower, as well. Likewise, for the C class, you will purchase even more, as the overall cost is lower than A or B class items; therefore, you can buy and carry more—the cost to purchase will be negligible, as you normally buy a higher quantity for lower class items. As the cost to carry drops, you can afford to stock more inventories for a longer period.

Now, what if you’re using EOQ purchase method, or managing your inventory manually, such as with Min Max? Should you still class your inventory? Yes, for various reasons. The ability to monitor what is called the inventory pyramid (i.e., how much inventory do you carry in the A class or the B class) is very important in the overall inventory management model. It’s also important to be able to balance the inventory from one location not selling the item, to another that has a higher chance of selling the item.

Other Ranking Options

Should you rank by units sold? How about by hits (the number of times the item has been picked from the bin for orders and transfers)? The answer is “yes” to both, but again, for proper inventory turns and for purchasing, the classes should be set to cost for purchasing, and for hits, the system will default to the last 12 periods. Further classing by units sold—or more commonly, velocity—will provide what is called a “double classing.” For example, you could have a high cost item that is slow in velocity. These items can then be controlled differently.

Each class in the Epicor Prophet 21 ERP solution actually consists of three classes, with different velocity “UPTO periods to supply.” An example would be a high cost item with a slow velocity that can be set to a higher “periods to supply.” This means if you sell, say, five units of an item all year, but the cost of the item is high, this is a slow velocity item. The A class can be set to a three-month “period to supply” for the slow velocity items.

Ranking based off hits will give the warehouse a “top 50 items” list. This list can be used to rearrange these items for a quicker pick in the warehouse, as well as moving them closer to the shipping area to reduce steps taken to pick.

To learn more about how ABC classes can improve your inventory management processes, or to obtain recommendations for setting up, maintaining or making changes to your ABC classes, contact an Epicor Application Consultant.

Posted by Neil VanWalbeck, Professional Services Consultant at Epicor Software Corporation

Neil VanWalbeck
Category: Distribution
Published: 1/30/2013 6:56 AM
]]> mconlin Distribution Wed, 30 Jan 2013 14:57:35 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=44 Should Distributors Be Afraid of AmazonSupply.com? http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=45 Body:

There has been a lot of speculation about what Amazon.com’s foray into the realm of wholesale supply means for distributors. Can we expect major disruption, along the lines of Amazon’s revolution in retail selling (which resulted in casualties such as Borders Books and Circuit City Stores)? 

Most industry observers believe there is no cause for panic. Attendees at Epicor’s Insights 2012 global customer conference were heard to comment that AmazonSupply has merely “raised the bar.” That is, it has the potential to set a new standard that will push more wholesale distributors toward embracing technology as a means of reducing their overall cost to serve and enhancing their customer relationship management capabilities.

Amazon’s entry into the market may indeed become an impetus for distributors to compete using technology, as customers increasingly rely on the Internet to research and compare pricing and availability. Over time, the rise of AmazonSupply may even come to be regarded as a milestone in the validation of e-commerce.

Watch for AmazonSupply to initially go after the spot buy or “unplanned spend” part of the wholesale market, especially for commodity items that don’t require additional services. Modern Distribution Management and others have speculated that the biggest threat is to MRO distributors such as Grainger.

For most traditional distributors, product knowledge, multichannel capability, speed, accuracy, local relationships and customer service are the keys to maintaining a competitive advantage. For example, many customers of wholesale distributors rely on extended lines of credit, a service not currently offered by AmazonSupply. If Amazon does eventually introduce this option, it could further “turn up the heat” in the marketplace. In the long run, some larger distributors may even find opportunities to partner with AmazonSupply, such as for local pickup of materials. (In fact, Amazon has just announced remote pickup service, which allows customers to pick up their orders at a convenient location.)

Gartner analyst and vice president Bob Anderson advises distributors, “The train has left the station. You need to ‘get with the program.’” In other words, AmazonSupply is not going away, and distributors will need to monitor this new enterprise closely and learn to adapt their businesses accordingly.

Don’t take a “wait and see” approach. While AmazonSupply may or may not be a direct competitor for your distributorship right now, either way, it’s going to shape your customers’ expectations of how they interact with your business and others in the online world. More and more, B2B customers will come to expect the same consumer-friendly experience they get from Amazon, and technology is the key to providing that experience for your customers.

Category: Distribution
Published: 1/30/2013 6:57 AM
]]> mconlin Distribution Wed, 30 Jan 2013 15:04:00 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=45 Benefiting from the Wireless Warehouse http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=46 Body:

Is it time for a Wireless Warehouse Audit? Here are some things you may want to think about:

Current Sequencing for Picking

Are you walking in circles? Or starting at a point in the warehouse that does not fit a good flow? How about picking items in aisle A, then moving over to aisle C, then back to aisle A?

These scenarios mean your picking sequence is not in line with your picking theory (starting at one point, and finishing in the shipping area). The same goes for putaway sequencing.

Putaway sequencing will walk the warehouse personnel in a logical path through the facility. Think of it this way: when you are ready to put away material to the shelves, you want to start where you pick the items up. Normally, the receiving department is a logical place to start. Whereas for picking, you want the opposite: start on one end of the warehouse, and finish in the shipping area.   

Group Picking

Are you picking a group of pick tickets for the same customer, making picking much more efficient? What about picking a group of transfers for the same branch? Both of these options will increase efficiency, making one pass through the warehouse instead of one pass per pick ticket.

Bringing in Workbench

If you’re not currently using workbenches for your pick ticket sorting and assigning (yes, workbench can auto assign picks to a user!), you can create groups as well as load balance. No more Bob picking single line orders, and Tom picking 20 line orders. Think of this as a “push” process: the picker has no choice; he logs into the workbench, and picks will start going to his scanner, by priority (e.g., picking the “will call” orders first, then the rush shipments next, as well as specific carriers).

Also with workbench, you have the ability to automate “forward” or “primary” pick bin replenishments. Each item in the primary bin can have a Min/Max. When a sales order is picked from the primary bins, taking the on-hand quantity below the min, the system will send out an alert for a warehouse person to replenish these bins.

Cycle Counting

Cycle counting is a primary reason for moving to RF (wireless) warehouse management. With Epicor Prophet 21 real-time bin updates, users can be counting, picking and even putting away material all at the same time, all without the need to research allocated items, cancel pick tickets, or stop the ongoing daily warehouse activity. 

Posted by Tom Kunse, Business Process Consultant at Epicor Software Corporation

Category: Distribution
Published: 1/30/2013 7:04 AM
]]> mconlin Distribution Wed, 30 Jan 2013 15:04:46 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=46 The Fundamentals of DRP (Part 1 of 2) http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=47 Body:

What does Demand Replenishment Planning (DRP) mean?

DRP, a new feature of Epicor Prophet 21, is intended for items with long lead times. DRP will take your current inventory forecast, using UPTO, EOQ, Min/Max or OP/OQ, and forecast out one year into the future. For example, let’s pick an item with a lead time of 30 days and over. By creating a forward year, in this case 2013, the DRP model now will generate forecasts over the forward year to determine future customer requirements. (However, DRP does not work with erratic-patterned items.)

Why is DRP useful to distributors?

DRP will follow your inventory curve. In other words, let’s say the item we are forecasting has a 90-day lead time. If we create a purchase order on October 20, the material will not be due in until January 20, 2013. We don’t need to purchase based on October’s forecast; we need to purchase based on what we will need in January. Now, if the current forecast is 200 pieces in October, what will the forecast need to be for this item in January? Let’s assume some seasonality for this item: in January, the demand drops off to 100 pieces; therefore, the DRP model will suggest the purchase of enough material to cover January’s 100 pieces, based on the item’s replenishment method.

One other bonus to DRP is that it will alert you to potential shortfalls. In the above example, let’s say before the receipt in January, your net stock will be down to zero or below. DRP gives the buyer a head’s up to possibly purchase the shortfall before the January purchase receipt. If the shortfall is not purchased, a sure stock out will occur.

In our next blog, we will discuss Future Stock Analysis Queries, Item Future Forecast Fast Edits, and other DRP functions available for specific inventory forecast methods.

Posted by Neil VanWalbeck, Senior Professional Services Consultant at Epicor Software Corporation

Neil VanWalbeck
Category: Distribution
Published: 1/30/2013 7:04 AM
]]> mconlin Distribution Wed, 30 Jan 2013 15:05:49 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=47 The Fundamentals of DRP (Part 2 of 2) http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=48 Body:

What is the purpose of a Future Stock Analysis Query in Demand Replenishment Planning?

In a Future Stock Analysis Query, if today is September 20, the Epicor Prophet 21 system will determine what percentage of September has already passed and what percentage remains; e.g., 30%. The system will then look at the September forecasted usage and determine what 30% of that is. This balance will be considered as part of the current month's anticipated usage. (The actual orders that have been placed so far in September will have already affected your on-hand balance or will be reflected in the open customer requirements.)

The Future Stock Analysis will then forecast the ending balance at the end of each period based on actual orders, forecasted usage (or a percent remaining for the current period), anticipated purchase orders, and other transactions that are likely to affect your item for up to one year into the future. This allows you to see when you are likely to run out of an item, and what would happen if you ordered more in a given period, as project purchases (ones that you are planning to make) can be added to the query to see their effects.

What other DRP functions are available for specific inventory forecast methods?

  • For Min/Max & OP/OQ, the net stock will be determined at the anticipated time of purchase instead of right now, by reducing current net stock by the forecasts.
  • For UPTO & EOQ order points, the OP will be calculated based on the forecasted usage covering the number of days of lead time, review cycle and safety stock. This differs in that the forecasted usage will be based on the forecasts going forward and not the current period’s forecast, divided into daily usage and multiplied by the number of days mentioned above.
  • For UPTO order quantity, the OQ will be calculated based on the forecasted usage at the anticipated time of receipt over the number of periods specified in ABC Class Maintenance.
  • For EOQ, the OQ will be calculated based on the forecasted usage for the period at the anticipated time of receipt, instead of current forecast.
  • Purchase stock card calculations (IMI and PORG) now have enhanced OP calculations to include future forecasts. IMI can adjust the look ahead days, including the availability of dynamic look ahead days.

What is an Item Future Forecast Fast Edit?

Another feature included for DRP items is an Item Future Forecast Fast Edit (or IFFFE), to find items over a specific lead time and to select all to set to DRP. Items can also be manually set to DRP on the locations replenishment tab. On the Item Future Stock Analysis report, items will allow the buyer to include quotes and/or any stock outs, if they so choose, to get a high-level view of potential stock positions for a group of items.

Once items are set to DRP, it will be necessary to either run a demand year update, or to update each item separately in the item history screen. It is recommended to set up DRP items at period end, so they will be future forecasted with the regular demand update process.

As always with any new feature, it is recommended to test these features and to enlist an Epicor Application Consultant for help with settings, theories and concepts.

Posted by Neil VanWalbeck, Senior Professional Services Consultant at Epicor Software Corporation

Neil VanWalbeck
Category: Distribution
Published: 1/30/2013 7:05 AM
]]> mconlin Distribution Wed, 30 Jan 2013 15:06:50 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=48 Evaluating ERP Solutions: Focus on Functionality http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=49 Body:

You expect enterprise resource planning (ERP) to be the lifeline of your business, but what if it’s not producing the results you expected?  If your ERP solution is not purpose-built for wholesale distribution, you may be missing necessary functionality, therefore making your company reactive instead of proactive.

A recent Mint Jutras survey on ERP solutions revealed that functionality continues to be a challenge for many wholesale distributors: 

  • Thirty-six percent of wholesale distributors rated “missing required functionality” as more than moderately challenging. 
  • “Customization-related challenges” ranked as one of the top five challenges to achieving ERP goals, a telltale sign that functionality is an issue.  In fact, distributors with heavily customized systems may have spent more in creating and maintaining customizations than they would have if they’d selected a solution with a better fit.

If you are not yet realizing the full benefits of a successful ERP implementation, it is worth asking some tough questions:

  • Is your current solution provider staying on top of technology by making software upgrades regularly available to your company?
  • Does your current solution provider understand the intricacies of the wholesale distribution business?
  • Does your existing solution easily supply the metrics that directly contribute to your company’s profitability, such as customer buying habits and margins?

Unlocking the value of ERP requires a combination of people, processes and technology.  Don’t assume you have to settle for a general-purpose ERP solution.  Instead, you should seek out function-driven competitive advantage that will set you apart from other wholesale distributors.

Category: Distribution
Published: 1/30/2013 7:07 AM
]]> mconlin Distribution Wed, 30 Jan 2013 15:07:40 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=49 Using the Lost Sales Feature in Prophet 21 http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=50 Body:

Lost Sales is a multi-faceted feature in the Epicor Prophet 21 enterprise resource planning (ERP) solution. With it, distributors can track orders that had items cancelled, and account for quantities edited to lost quotes.

Lost Sales areas range from “cancel order,” “cancel or edit the quantity on an order” or “shipment cancelled,” to editing the quantity on a pick ticket. Each Lost Sales area can be set to auto populate a reason code, or set to prompt for reason codes.

Affecting Usage

“Affecting usage” is a helpful function for Lost Sales reason codes. It can be used to adjust for mistake entries, or to reset to “not affect usage” for not having the quantity the customer expected. Here is how it works:

When an item is entered onto an order, the actual usage goes up in increments. If the order is cancelled, the usage will then go down in decrements. This cycle is referred to as “affecting usage.” This action does not matter if the system setting to capture usage is set to “invoice” or “order entry.” With that said, if the setting is on “order entry,” then a reason code can be set to not affect usage. This will account for reasons like “out of stock,” or “could have sold the item if we had it.” This reason code set to “not affect usage” will be half the full usage cycle; in other words, the code will not reduce the usage—instead, it will keep it up, just as if the order went through.

If using CRM and Opportunities, then Lost Opportunities can be tracked, as well, along with RMAs. Lost Opportunities can be tracked with reason codes when the opportunity is lost, meaning a competitor won the bid.  

In summary, the report for Lost Sales can be used to separate out not just factors such as user entry error, but also reasons where the demand was not affected. Lost Sales is a good tool to look for trends such as “priced too high” or “returned material,” and more importantly, to use the available codes to ensure the material will be on the shelf the next time!

 Posted by Neil VanWalbeck, Senior Professional Services Consultant at Epicor Software Corporation

Neil VanWalbeck
Category: Distribution
Published: 1/30/2013 7:08 AM
]]> mconlin Distribution Wed, 30 Jan 2013 15:08:52 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=50 ERP Replacement as a Catalyst for Business Change and Growth http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=102 Body:

There is no better time to re-evaluate your business processes than when you are about to select and implement a new business system. While you’ll need a distribution software solution that conforms to your business, many distributors overlook the fact that today's technology and industry best practices can allow them to do things more productively. You should use this opportunity to architect new processes that will immediately impact your profitability and customer service levels.

According to a study performed by Cisco Systems, "Companies that changed their business processes at the same time they implemented new technology saw a 25-30 percent increase in productivity. Without changing their business processes to fit the new technology, businesses actually lost productivity at a rate of 6-9 percent."

As discussed in previous Connected Distributor blog posts, the best solution providers adhere to lean methodology when it comes to distribution functionality and processes. Be sure to inquire with each prospective solutions provider if they have staff certified in lean methodology. You must be convinced that the solution will help you achieve your objectives to keep your business lean and competitive.

You also need to be sure that your company’s distribution software solution will be able to grow with the organization and adapt to changes in the business, as well as continue to offer the best in ERP functionality as the technology evolves. For those business processes that are truly unique to your company, your new technology should be modifiable to handle exceptions.

Keep in mind that there is a big difference between modifying and customizing.  The former, by common definition, should not require tampering with the source code at all. Often, distributors insist on custom development for a process that they later admit could have been handled using the existing software capabilities. Be sure you are comfortable with the amount of flexibility your selected solution offers from day one.

Replacing your distribution software system involves a certain amount of innovation, as well as risk. Innovation creates market leaders, and market leaders are the first to achieve a return on their investment—usually a significant return. Look for a solutions partner that is passionate about inspiring that innovation in their customers, and knows how to manage the risk associated with it.

To learn more, read our white paper, 5 Mistakes Distributors Make When Selecting an Enterprise Software System.

Category: Distribution
Published: 1/31/2013 8:30 AM
]]> mconlin Distribution Thu, 31 Jan 2013 16:32:59 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=102 Selecting the Right Provider for ERP System Replacement http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=103 Body:

Distributors may decide to replace their enterprise resource planning (ERP) systems for a variety of reasons. At the most fundamental level, the question is whether your current system supports or constrains your ability to execute business strategies that will make your company successful and establish it as an industry leader.

Your ERP system provider must be part of your vision. Selecting the right software provider for your business can be a daunting task for those who lack experience in this process. The last thing any person or company wants is to invest in the wrong technology and choose the wrong partnership. The following steps can help increase your probability of success.

First, the head of the organization needs to be involved in the decision-making process. Unless the IT team truly understands the vision of the company for the next 5-10 years, they cannot judge the value a software solution will bring to the business. Ideally, the team selecting your new enterprise software solution should include a high-level executive with long-range vision, line managers from each discipline to confirm proper functionality, and IT staff to ensure that you have the best technology infrastructure for the present and future.

Once the team is in place, the next important step is to define your compelling event. This is your definitive answer to the question, "Why now?" Compelling events are often tied to a process mandate from a key business partner, or an organizational change such as a merger or acquisition.

The cornerstones of your evaluation process should then be: determining your budget and ability to afford the investment, identifying your critical business issues and needs, and defining the selection criteria for the right software and technology provider.

You will want a solution provider who understands the nuances of your business and has the functionality to support your unique needs. Answers to questions such as the following will help you narrow your field of vendors: 

  • How many customers are distributors? How long has the company been serving distributors? 
  • Is there an annual users conference focused on the needs of distributors? 
  • Is the company a member of associations and buying/marketing groups in your industry?

If done correctly, the work you put into selecting your new enterprise software system will pay huge dividends, by giving your company a solution that increases sales, improves customer service, and reduces operating costs. The results can be truly game-changing for any distributor.

To learn more, read our white paper, 5 Mistakes Distributors Make When Selecting an Enterprise Software System, available at: http://www.epicor.com/5mistakes

Category: Distribution
Published: 1/31/2013 8:33 AM
]]> mconlin Distribution Thu, 31 Jan 2013 16:34:22 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=103 Theory of Constraints in Distribution http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=104 Body:

“In the midst of complexity, there is inherent simplicity.” --Dr. Eliyahu M. Goldratt, 1947-2011

The same critical thinking processes used in the hard sciences have led to the development of a holistic approach to business called the Theory of Constraints (TOC). The application of this approach to distribution has shown dramatic results.

TOC is a focusing technique that searches for the inherent simplicity in the midst of complexity. Dr. Goldratt theorized that improvement in the throughput of any system is governed by very few factors, the critical one being the overall constraint. Depending on the environment of the company, this constraint can be located in different areas, sometimes internally (production, warehouse, purchasing, policies, etc.) and sometimes externally (in the market). In distribution, the constraint is usually in the market (an estimated 70 percent of the time).

Let’s look at how TOC applies to the issue of inventory in the distribution environment. What is the distributor’s mindset when deciding on how much stock to keep at each location? Two main questions must be addressed:

  1. How much stock to keep upstream in the supply chain?
  2. How much stock to keep downstream in the supply chain?

The natural tendency is to keep the stock as close to the consumers as possible—the thinking is, if a product is not at the consumption point, then there is a smaller chance the item will be sold. Therefore, it only seems “logical” that the distributor should keep most of the stock as close to the customer as possible—as far downstream as s/he can manage.

This is a common-practice “push” behavior: pushing products downstream in order to increase consumption. However, this push behavior requires a good forecasting model, in order to predict where and when the stock will be needed at the stock locations.

Even with today’s advanced forecasting tools, we can’t effectively answer the availability question: What to hold at which place and when? This is because:

  • The more specific (the narrower the aggregation), the less accurate the answer becomes—meaning that the question of “How much will be sold overall?” will be answered much more accurately than “How much will be sold at this specific location?”
  • Many times, data is incorrectly interpreted. It is common practice to use statistics without a good understanding of the “law” of aggregation. The more sophisticated the algorithm, the more sophisticated the end user has to be in order to correctly apply it.
  • No forecasting model can take into account a sudden change in consumption patterns.

So, first let’s kill all of the forecasts! Well, not exactly, but the TOC solution for distribution does call for a shift away from the common-practice push (forecast-driven) approach and towards a “pull” mechanism. The TOC solution is built on constant renewal of the consumed stock. It includes several steps that apply in most environments:

  • Aggregating as much stock as possible as close to the source as possible—the supplier or central warehouse. Setting a higher inventory target there—called the Stock Buffer Size.
  • Setting much lower Stock Buffer Sizes at all other locations.
  • Creating the transfer of real sales data on a frequent basis from all stock locations.
  • Shrinking the replenishment time as much as possible.
  • Replenishing the stock locations as frequently as possible, with a strict focus on shipping only to replenish to real consumption or to re-adjust the buffer sizes.
  • Continually monitoring the buffer sizes and making adjustments according to consumption.

A disciplined approach to implementing these steps can build a Decisive Competitive Edge (DCE) when linked to the timing of the constraint in the market. A DCE means satisfying a customer’s core need to an extent that no competitor can or will (as most companies do not have a DCE). It will also significantly improve cash flow—another possible constraint in today’s operating environment.

Within a period of three months after starting the implementation of a TOC solution, it has been reported that inventory turns have improved by a factor of 2.8, created by significant reductions in inventory while increasing sales through the lessening of stock outs. Finding the inherent simplicity in the midst of complexity can certainly pay off.

Posted by Tom Rodgers, Senior Business Consultant at Epicor Software Corporation

Tom Rodgers
Category: Distribution
Published: 1/31/2013 8:34 AM
]]> mconlin Distribution Thu, 31 Jan 2013 16:36:33 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=104 Meet the Executive Team: Paul Farrell – Executive Vice President, Worldwide Research & Development http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=105 Body:

Meet Epicor’s Executive Vice President, Worldwide Research and Development, Paul Farrell. Paul brings over 20 years of experience with enterprise resource planning systems to the company and is responsible for product development of the company’s enterprise software product lines.

Q: Paul, What is your vision for the new Epicor?

A: I think the vision for the new Epicor is to deliver the only software solution a customer will ever need. 

Q: What is most important in your role as EVP, Worldwide R&D that will help to achieve this vision?

A: My major role is to ensure that we maintain a balance between producing products that people want to buy and producing products that people want to use. Customers when buying a product want a solution that has every bell and whistle.  However generally when using it they need their “5 screens” completely, uncluttered, optimized and simple.

Q: If you could trade places with any other person for a week, living or dead, real or fictional, who would it be and why?

A: Billy McNeill– the captain of the Glasgow Celtic (my favorite football “soccer” team and undisputed greatest football team in the world). He led them to the European cup, nine consecutive league titles and many cup wins as a player.  Later as a manager he led the team to numerous league and cup wins. Swapping for the week he won the European Cup would have been great.

Paul Farrell
Paul sitting in the Celtic dugout at Celtic park with his wife, Jo and sons, Thomas and Ewan.

Posted by Morgan Liti, Social Media Team, Epicor

Category: Distribution; Technology and Innovation; ERP; Manufacturing; Retail
Published: 1/31/2013 8:43 AM
]]> mconlin Distribution; Technology and Innovation; ERP; Manufacturing; Retail Thu, 31 Jan 2013 16:48:15 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=105 Lean in Distribution (Part 3 of 3): Management Commitment http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=106 Body:

“Kaizen” is the Japanese word for continuous improvement.  Lean challenges employees to think about kaizen every day in every distribution function, training their eyes to spot waste not previously visible. 

Lean is a journey well worth taking by every business measure, including ROI, employee satisfaction, customer satisfaction and growth.  However, after 20 years of working in continuous improvement, I can state as a fact that lean improvement programs simply cannot succeed without management’s unequivocal, open support.  By management, we mean all management ‒ everyone must be on board to proceed.  No single factor is more important for determining the success of a program.  The good news for management is that giving support can be a relatively simple, non-time-consuming exercise, with returns far greater than any other management activity, including sales! 

Let’s break down what management must achieve into three parts:

  • Mindset
  • Major activities
  • Mentoring

Mindset is the most important.  The lean improvement team should be considered as a solution for every operational decision made by management.  There should no shortage of directives from management to the improvement team.  The lean team should lead all improvement activities, in conjunction with appropriate functional leaders.     

Every member of the management team must convey a positive, go-forward view of lean.  One very helpful tool is a pre-determined elevator speech that every member of management must be able to convey to any employee or customer.  For example, if an employee asks management, “Do you really think lean is the answer?” management would respond, “Lean is about designing the best possible distribution processes. Lean tools are the best known way to eliminate waste and drive customer value.”   This answer or “elevator pitch” should be consistent across all management.

Major Activities are the second of management’s lean responsibilities, which can be broken into three parts:  Prioritizing Projects, Approving Projects, and Celebrating Success.  Management determines the focus of kaizen events by prioritizing projects according to ROI, customer needs and business needs.  For example, a distributor could have problems with picking accuracy, inventory turns, sales and shipping costs.  Management would help prioritize by high-level analysis of return and maximum benefits to customers and the overall business.

Areas for lean projects are certainly not just limited to the warehouse.  In fact, most of the high return on investment projects are accomplished in the office.  Project areas that are touched many times per day can have larger overall benefit.  For example, removing just 10 seconds from the order entry transaction can save thousands of dollars per year, because it is done so many times over the course of the year.  Below is a list of several major initiative areas.  Each of these areas could yield several kaizen events:

Sales

  • Lean Relationship Management
  • Lost Sales
  • Sales Growth
  • Pricing
  • New Products

Purchasing

  • Supplier Reliability
  • Supplier Relationship Management
  • Lead Time and Variability Reduction
  • Lean Transportation
  • Global Product Movement
  • Supplier Defect Reduction

Logistics

  • Inbound and Outbound Logistics Costs
  • Packaging Reuse/Reduction
  • Shipping Defect Reduction

Warehouse

  • Lean Warehousing with Slotting
  • Inventory Accuracy
  • Picking, Packing and Shipping Time Reduction
  • RFID
  • Wireless Warehouse

Once the project areas are selected, the lean kaizen team would discuss appropriate tools, scoping, costs and leaders of the project.  Management would give final approval and agree to its support of the project and all related costs. 

Management also needs to be an active leader in celebrating success.  Personal contact with the team members is imperative.  Simply having the CEO or President take the team out for lunch or pizza can give the program a huge lift.  Rewarding success will yield success.  

Mentoring is the final lean responsibility of management.  Leadership needs to assure that the lean leader has all the tools, support and business knowledge that they need to succeed.  The finance leader specifically can play a key role in mentoring, giving P&L perspective for project selection and valuing project success.       

The lean journey is not an easy one.  Lean implementations are filled with mistakes or changes that do not quite live up to expectations.  However, turning waste into value is a very rewarding activity.  Lean distributors struggle to improve, but they do improve.  Epicor business consulting has been working with distributors for over 20 years, and lean business consulting results have averaged 51 percent improved productivity per consulting activity.  We believe lean can do more to help distributors than any other single activity.

To learn more about lean, read our white paper, Operational Guide to Implementing Lean in Distribution.

Posted by Stuart Maxel, Continuous Improvement Manager at Epicor Software Corporation (formerly Activant Solutions).  

Category: Distribution
Published: 1/31/2013 8:48 AM
]]> mconlin Distribution Thu, 31 Jan 2013 16:49:04 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=106 Meet the Executive Team: John Hiraoka, CMO http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=107 Body:

Meet Epicor’s Executive Vice President and Chief Marketing Officer, John Hiraoka. John joined Epicor in 1998 and brings over 25 years of enterprise applications design, development, sales, marketing and operations experience to the company. In his role as chief marketing officer, John is responsible for the company’s overall corporate, product and marketing strategy, as well as corporate development, strategic partnerships, alliances, and mergers and acquisitions.

Q: John, what is your vision for the new Epicor?

A: To be the company that fundamentally changes how enterprise business software works.  The industry has talked about it for a long time – we are doing it.

Q: What is most important in your role as CMO that will help to achieve this vision?

A: Getting out the message on what we’ve done and also what’s coming. Helping companies see that “next generation” business applications are real, here now, and can provide phenomenal benefits in productivity and usability.

Q: What did you want to be when you were 12-years-old?

 A: President.

John Hiraoka

John demonstrating his love of crustaceans.

Posted by Morgan Liti, Social Media Team, Epicor

Category: Distribution; Retail; Technology and Innovation; ERP; Manufacturing
Published: 1/31/2013 9:51 AM
]]> mconlin Distribution; Retail; Technology and Innovation; ERP; Manufacturing Thu, 31 Jan 2013 17:59:44 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=107 Meet the Executive Team: Kathy Crusco, CFO http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=108 Body:

Meet Kathy Crusco, Epicor’s executive vice president and chief financial officer. Kathy brings over 20 years of experience to her role as CFO of Epicor Software Corporation, and came to Epicor in May 2011 following the merger with Activant Solutions Inc., where she also served as CFO.

Q: Kathy, what is your vision for the new Epicor?

A: For me, the vision is to be the fastest growing ERP company in the marketplace and I think with the combination [of the recently combined Epicor and Activant] we can do that. We have the best product and I believe we have the best people, who have a real passion for Epicor – now it’s really about providing the best service and with that, we’ll be the fastest growing ERP company.

Q: What is most important in your role as CFO that will help to achieve this vision?

A: The most important role that I play is working with the management team to ensure that we have the strategy to achieve the goals and objectives we put in place. I also think making sure our processes support that strategy so that we can provide the information and the best results is of the upmost importance. I view Epicor as a customer-facing organization and the number one goal is to provide superior customer service to our customers, both internal and external.

Q: What is your favorite weekend activity?

A: Going boating on Clearlake with my family – although it’s getting much more difficult to have my two boys (who are 17 & 19) agree to go on family outings with “mom and dad.”

Kathy Crusco

Kathy with her husband and son at his last varsity high school soccer game in his senior year. Kathy says soccer is one of her family’s shared passions.

Don’t miss the next feature where we’ll be speaking with Epicor’s CMO, John Hiraoka.

Posted by Morgan Liti, Social Media Team, Epicor

Category: Distribution; Retail; Technology and Innovation; Manufacturing; ERP
Published: 1/31/2013 10:00 AM
]]> mconlin Distribution; Retail; Technology and Innovation; Manufacturing; ERP Thu, 31 Jan 2013 18:04:03 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=108 Meet the Executive Team: Pervez Qureshi http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=109 Body:

Successful leadership of one of the largest and fastest growing global enterprise business software companies requires many skills  - vision, passion, determination, humility, and limitless energy just to name a few.  It shouldn’t be surprising that Epicor’s executives not only embody these attributes, but also a number of other qualities and characteristics that drive them both personally and professionally.

Over the next couple of weeks we’ll be chatting with the Epicor executive team not only about their vision for the New Epicor, but also to learn more about them personally and what they do when they’re not at work, on the road, or online – like what motivates them, how they decompress, or what we might find in their refrigerator on a Sunday morning.

For our first installment, I’d like to introduce you to Epicor’s President and CEO, Pervez Qureshi. Pervez brings more than 20 years of management experience in Silicon Valley’s hi-tech industry to his role as president and CEO of Epicor.

 

Pervez Qureshi, President and CEO  

Q: Pervez, what is your vision for the new Epicor?

A: It’s very simple – to build the leading, worldwide, midmarket ERP company and to deliver solutions that grow our customers’ revenues and profitability.

Q: What is most important in your role as CEO that will help to achieve this vision?

A: To make sure we have the best people that are engaged, energetic and inspired to focus on our mission. It’s really all about our people and making sure they have the tools, training, resources and education needed to further our mission.

Q: What’s your favorite stress reliever?

A: First, philosophically, I have two strong beliefs: 1) that no person is tasked with a burden greater than they can bear and 2) that with difficulty comes ease and with ease comes difficulty. For me, these two beliefs prevent stress rather than relieve them, as they help me to remember that any obstacle in front of us is not that big and that we are capable of handling even the most seemingly difficult situations.

As far as an actual stress reliever beyond those two beliefs – that would be meditation.

Pervez Qureshi

Epicor’s Chief Executive Officer, Pervez Qureshi

Stay tuned for the next installment of Meet the Executive Team featuring Executive Vice President and CFO, Kathy Crusco.

Posted by Morgan Liti, Social Media Team, Epicor

Category: Distribution; Retail; Technology and Innovation; Manufacturing; ERP
Published: 1/31/2013 10:05 AM
]]> mconlin Distribution; Retail; Technology and Innovation; Manufacturing; ERP Thu, 31 Jan 2013 18:08:43 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=109 Lean in Distribution (Part 2 of 3): Lean Tools http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=110 Body:

There are many lean tools that can be effectively used in distribution, but tools by themselves provide little value.  Lean is more about achieving a culture of improvement in employees’ minds, and building a flexible system to drive out waste and better meet customer expectations.  Tools should be thought of as examples of lean activities that may be applied to processes. 

Many times, the best lean tools are unique to a particular business.  Examples can include customer software development, wireless warehouse capabilities, special carts to increase picking speed, moving desks and tables to allow for faster processes, and activating ERP system capabilities not yet utilized.  However, basic lean tools are the way to begin a lean implementation; here are several of the best ones that fit well in distribution.

5S - 5S is a way to organize distribution functions to eliminate waste and errors, and increase efficiency and employee morale.  5S is a great tool to start a lean implementation because it is easy to use, makes a visual improvement and is usually successful.  5S stands for Sort, Set in Order, Shine, Standardize and Sustain.  The layman’s view of 5S would see it as “cleaning up.”  However, 5S is much more powerful than first impressions.  5S is about eliminating waste that is slowing processes down.  It is about becoming more organized and standardizing work areas.  Utilizing 5S allows distributors to see waste and therefore eliminate it.     

Lean Warehousing - Lean warehousing means designing a distribution system to create efficiencies and eliminate wastes.   Basic lean tools for warehousing include:

  • Moving Similar Products Together
  • Storing by Amount of Product Usage
  • Having a Separate Location for each Item Number
  • Storing Product Vertically when Possible
  • Storing Product within Easy Reach of Workers
  • Storing Heavy Product Low

The lean tools above are combined with basic distribution best practices such as dock-door assignment, advanced shipping notice, cross-docking, system-directed put-away, and automated scanner and bar coding practices.   Basic lean warehousing is a key step to gaining an efficient and stable distribution environment.

Visual Management - Visual Management is a way to monitor and adjust daily operations to assure that daily distribution goals are achieved.   With the advent of complex ERP packages, there has been a loss of touch with the actual warehouse, or a separation between the office and the warehouse.  If a distribution owner were to walk out to the warehouse, could they tell how things are going?  Is everything going to ship on time today?  Are we behind in putting inventory away? How many shipping errors happened this week?   The answers may be difficult to find in the distribution system. 

What if every employee knew how the day was going?  That is, they knew exactly how fast they needed to work in order to get everything shipped.  Everyone knew when picking or shipping errors occurred and who was responsible.  Visual management is about everyone understanding and striving to meet daily operational goals.

Standardization - Standardization should use employee consensus to determine one best process, to assure that everyone does things the same way and the best way.  This eliminates variation and errors as part of the process.  It also allows individuals to present their best practices to form a standard that comprises the best ideas of all employees. 

Work Procedure Documentation is a key standardization tool used in lean distribution.  Work procedures also allow new employees to be trained faster and more efficiently, by ensuring that they are doing processes correctly from day one. 

VSM – Value stream mapping is perhaps the most effective tool for seeing and eliminating waste in distribution.  Value stream mapping is similar to process mapping, but adds several powerful layers of analysis.  Value stream maps not only chart process steps, but more importantly, give insight into the overall value of a process.  Before-and-after value stream maps are utilized, with the goal of increasing value.  Value stream maps help distributors re-design processes to gain measurable efficiencies. 

In our next blog, we will discuss the importance of having management commitment to launch and sustain a lean organizational culture using these tools.

Stuart Maxel is Continuous Improvement Manager at Epicor Software Corporation (formerly Activant Solutions). Find out more at www.epicor.com/distribution or call 1-800-776-7438.

Category: Distribution
Published: 1/31/2013 10:17 AM
]]> mconlin Distribution Thu, 31 Jan 2013 18:17:43 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=110 Lean in Distribution (Part 1 of 3): Lean Principles http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=111 Body:

Imagine a distributorship in which all employees took responsibility for improving the business. A business that continuously worked at eliminating waste and, more importantly, satisfying customers each day. Technology linked into business processes to simplify, automate and implement strategic goals management.

Lean can be the vehicle to unlock profitability, growth, and customer and employee satisfaction for distributors. It is a collection of simple, easy-to-understand concepts that can be applied by any size distributor. Lean is not just a tool, but instead, a culture, philosophy, process and methodology. In its simplest form, it means turning waste into value. More importantly, it involves getting employees thinking and motivated to make processes better. Lean analyzes end-to-end processes and determines how to deliver more to the customer with much less.

Typical improved results from lean distribution include:


  • Increased profits
  • Higher sales revenues
  • Improved delivery performance
  • Lower operating costs
  • Better customer satisfaction
  • Better supplier relations
  • Decreased purchasing costs
  • Shorter lead times
  • Inventory reductions
  • Higher inventory turns
  • Increased working capital for new projects
  • Increased space capacity
  • Greater employee morale

Implementing lean requires clarity of principles, so that all decisions made by the distributor favor a lean value stream. Let’s discuss the five lean principles as laid out by Womack and Jones in the book Lean Thinking, and how they fit into distribution.

Value – This involves identifying what customers see as value. For distributors, the value that they provide is having the right items, at the right time (often now), at the right price. Increasing anything that customers see as important will increase value. For example, if a distributor added an extra morning delivery, customers may see that as value because they may be receiving their items faster ‒ which could be a competitive advantage over other distributors.

Value Stream – The value stream includes the activities that a customer would be willing to pay for. For example, picking, packing or order entry are parts of a distributor’s value stream. The value stream is important because it can identify potential waste. The most common and powerful tool for identifying value in processes is a “value stream map.”

Flow – Flow is a logical but slightly less relevant concept for distribution. Flow really refers to continuous flow in very small, or ideally, single piece flow ‒ which means in general, batching should be avoided when possible. A lean flow means orders should be received, picked, packed and shipped all day long, as opposed to having large batches of picks, items for packing and single large shipments. In general, a lean distribution flow would purchase smaller quantities, and receive, put away, pick, pack and ship with such efficiency that batching does not save significant time.

Pull – Pull is a simple but key concept for distribution and supply chain management, outlining how distributors need to plan their inventory and order processing. Pull refers to actual customer usage and replenishing exactly what was ordered by customers. This stands in contrast to most push-type forecasting models. Obviously, this can be problematic with minimum buys, quantity discounts and relatively inexpensive items. Inventory levels, safety stock or buffer stock are reviewed periodically (about every 3-6 months) but, except in rare instances, not changed by actual usage until the regular review cycle.

Perfection – Perfection refers to driving waste out of every process and meeting customer expectations in every way. Perfection is elimination of mistakes in every shipment. It would equate to zero late orders, and having every item that customers need, at a price they are happy with, in stock. Obviously, it is not attainable on every order, but it should be the goal of every distributor. Trying to achieve perfection requires metrics to track the journey, such as fill rates, shipping performance to customer promise dates, wrong shipments and lost orders.

Lean is a never-ending journey ‒ it gets better, but no business can ever be completely lean. Lean becomes a way of life, striving for perfection in every process, customer order, and dollar invested in the business. In our next blog, we’ll discuss tools that can be applied in this journey toward lean.

Posted by Stuart Maxel, Continuous Improvement Manager at Epicor Software Corporation

Category: Distribution
Published: 1/31/2013 10:18 AM
]]> mconlin Distribution Thu, 31 Jan 2013 18:19:17 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=111 Extensibility: DIY to Insert Unique Functionality into Your Distribution ERP Software http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=112 Body:
In the world of Enterprise Resource Planning (ERP) software, extensibility is a virtual toolkit that allows you to take your unique business processes and insert them within your existing ERP system.

Every distributor has specific needs, or their own way of doing things that differentiates them from competitors. With extensibility tools, you can build user-defined fields, portals, personal workspaces or business rules, or integrate into external systems, to round out your processes, cut your costs, and improve efficiency. And when you want to change a process in response to a vendor request, a new business opportunity, changes in the industry, etc., extensibility provides a way to adapt to these business drivers with maximum speed and minimum cost.

The key to extensibility is that the user can develop pieces of code that best fit their company’s business process and create the necessary functionality for themselves without altering the underlying system code. Here are some examples.

At virtually any distributorship, you are likely to see standard process documents, laminated checklists posted on walls and desks, sticky notes on computer terminals about dealing with specific customers, and so on. Extensibility allows distributors to create business rules and decision making tools capturing all of those details that employees need to remember to do their jobs, and engineer them into the ERP system.

Expansion into international markets has required changes to many distributors’ business processes. Customers outside the U.S. may need to be set up differently within your system; e.g., with different currency codes. That’s just one more thing for your employees to remember. Why not help them adapt with a rule that automatically changes the currency to euros if a European country code is entered in the system?

Extensibility can help bridge the information gap between new and experienced employees — reducing the learning curve when you’re onboarding new hires, and getting them up to speed in understanding the different scenarios that your experienced people are used to handling. This also gives you more flexibility in reassigning people to deal with vacations, sickness, resignation and retirement, etc. With business rules, you can ensure that policies are followed, and reduce the potential for mistakes in your business processes, by placing restrictions and approvals in the system that help to enforce correct procedures.

Personal workspaces can be created for each individual employee in the company, for certain tasks they do on a regular basis (e.g., tracking shipments or expediting orders). A personalized dashboard can reach into various areas of the system and bring together all of the relevant information that that person needs to do their job — a single point of reference.

For real-time, on-demand data access, you can turn spreadsheets or reports into portals using extensibility tools. The portal can display information from the report on a screen, but make it interactive. Likewise, if employees are receiving too many automated alerts that clog up their in-boxes and don’t get acted upon, you can build a portal that turns the alerts into actionable “To Do” lists assigned to specific employees.

You can also empower employees by providing rules in the ERP system that give them guidance for handling common business situations. For example, if an employee attempts to negotiate freight with a customer, a business rule would be a great way to invoke the “voice of ownership” by providing parameters that encourage a negotiation that satisfies your customer but maintains profitability.

Obviously, distributors don’t want to spend lots of time designing their systems; they need to focus on building their businesses. But if you want to preserve processes that differentiate your business from competitors, rise to challenges and new opportunities, and respond quickly to market drivers without having to build everything from the ground up, extensibility puts the power in your hands.

Posted by Dave Getty, Vice President of Product Development, and Steve Heister, Product Manager at Epicor Software Corporation (formerly Activant Solutions).
Category: Distribution
Published: 1/31/2013 10:29 AM
]]> mconlin Distribution Thu, 31 Jan 2013 18:30:02 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=112 CRM Is Here to Stay: Evaluating Its Use with ERP http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=113 Body:
by Trevor B. Cain

The debate over whether the recession has ended may continue, but most industry watchers agree that conditions over the past two years have created a new climate in business – a climate where caution reigns, and increased customer service will be a key differentiator between competitors.

I hear almost every day from Activant clients and prospects that they need better tools and access to more accurate, real-time information in order to provide the increased level of service required to keep their current customers and attract new business. Competition is tough: a quote from one rep today could easily turn into an order for a competitor tomorrow.

The businesses I work with are distributors of wholesale durable goods. Wholesale distributors often run lean and mean – many times, without an outside sales force or the ability to be in front of every customer all the time. This does not exempt them from needing to create a competitive edge, however. Their field sales force has to be more proactive than reactive. They need to walk into a customer meeting armed with information: Quotes and invoices based on the last visit. Were there any new quotes? Any outstanding orders? Credit issues? Other problems?

Being aware of what is going on with an account has always been basic to customer relationship management (CRM), but in today’s climate, it’s a critical factor. As a result, wholesale distributors are looking for a better approach to CRM as they evaluate Enterprise Resource Planning (ERP) systems to run their business. For some, this is their first look at CRM, but others may be seeking to consolidate systems, searching for a more efficient alternative to maintaining two or more databases of information that often don't communicate with each other.

These stand-alone CRM applications can be quite costly to the midsize family-owned distributor. The functionality may be robust, but is it tailored to the specific demands of the distributor? Often, the investment has more function than needed.

When considering ERP systems for distribution, the question to ask in reviewing CRM functionality is: What does CRM mean to my business? Determining what CRM means to a distributor involves evaluating all areas of the business and their needs. CRM isn't just the customer relationship as it pertains to sales, but also accounting and value-added services, if they exist. Outside of sales, distributors also maintain relationships with their vendors. Without inventory and knowledge of availability, distributors would be dead in the water.

One approach to evaluating these areas of the business is to empower key employees from various departments to have a voice in what is important.

  • Does the company have an outside sales staff? If so, enhanced CRM functionality could greatly increase their efficiency. This usually goes to their bottom line, which is what they are always watching.

  • Do these field sales reps have laptops, smartphones, iPads? What tools do they need to have access to and from a system?

  • Can your company automate workflow not only within the business, but also out to those reps in the field?

  • Can the system generate automated tasks based on those important transactions that often require follow-up, such as quotes to the customer?

  • Does your company get involved in larger bids with customers (i.e., it's not just a single quote, but multiple quotes under a larger opportunity that may linger on for months)? Is the company able to track these opportunities in order to generate a pipeline of what is to come in future months?

These small pieces of functionality will make the difference between being proactive or reactive. The bottom line is, to see both immediate and long-term effects of CRM, you should get buy-in from employees. Determining needs, uncovering key functionality and implementing are only half the battle. No matter what CRM system you choose, the ROI will come only if it is put to use.

Trevor B. Cain is an Industry Segment Manager at Activant Solutions Inc. Find out more about Activant at distribution.activant.com or call 1-800-776-7438.
Category: Distribution
Published: 1/31/2013 10:30 AM
]]> mconlin Distribution Thu, 31 Jan 2013 18:31:31 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=113 Appearance Does Count: The Importance of User Interfaces for ERP Systems http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=114 Body:
by Steve Krok

A distributor’s ERP software is a treasure trove of data. As a system of record, it serves as an electronic file repository, historically tracking business events in great detail. Distributors have seen those systems of record go through many makeovers over the past 30 years. But as software providers scrambled to create new systems and improve on their existing platforms, they often created functionality with a clunky front end that had good data, but was difficult to interact with.

What the user interacts with is commonly called the user interface or UI. While UIs have recently taken leaps in making a user more efficient, if you look back to when many distributors last made an ERP system upgrade, this was not the case. The old systems of record had solid business rules for archiving data, but the UI suffered.

The resulting frustration of the employees was obvious, as the UI forced them to learn an entirely new language to communicate with the system in order to do their jobs. Repetitious tasks like Sales Order Entry, Cash Receipts and Stock Receipts had a flow to them that, on the face of it, was very cumbersome to the actual user. Getting employees to learn and use the interface was often a major milestone in the implementation of the ERP solution.

In more recent times, the technology world moved rapidly to create interfaces that were easy to understand and mirrored the lifestyle of the end user. Graphical UIs are getting better, faster and more intuitive. These days, a new hire is more likely to be familiar with the look and feel of a Windows-style graphical interface than traditional character-based screens. What young employee hasn’t seen or even played with graphical applications from Apple, Google, and Verizon?

The question falls to the IT manager within a distribution company using an older UI (whether or not the actual ERP is updated): does a graphical interface really make a difference? Based on our experience working with existing and potential customers, it absolutely does. According to one longtime customer who recently upgraded to a graphical interface, his new hires are trained more quickly and on the floor sooner than ever. They make fewer mistakes, as the newer UI is more intuitive as to how they do their jobs. They ask fewer questions about how to perform tasks, and expect the software to tell them what to do next.

Since the supply chain directly links the distributor to vendors and customers, the UI needs to touch these parties, as well. You wouldn’t expect a customer who’s surfing a Web site researching material and ordering product to interface differently than your employees do. Web sites that customers must interact with should have that same look, feel and ease of use that they expect from the Internet. Keeping the minds of your employees and customers “on the same page” by using similar tools also enhances the bond between them.

There is no doubt that having a robust system of record is paramount to ensure the archived data is recorded and stored properly. But without an equally good user interface to engage your audiences, that database is like a buried treasure chest. It’s just not being used to its fullest potential.

Steve Krok is an Industry Segment Manager at Activant. Find out more about Activant at distribution.activant.com or call 1-800-776-7438.
Category: Distribution
Published: 1/31/2013 10:34 AM
]]> mconlin Distribution Thu, 31 Jan 2013 18:34:30 GMT http://www.epicor.com/sites/Blogs/Lists/Posts/ViewPost.aspx?ID=114