Welcome to the Epicor blog community, covering topics to inspire discussion where Epicor thought leaders, employees and partners alike can share insight across industries.
Supplier performance scorecards and supplier stratification modeling are related concepts, but very different in how they should be used.
A supplier performance scorecard program should be used between an organization and its suppliers as a means of evaluating the performance of the suppliers against mutually agreed upon or accepted criteria.
A scorecard or performance measurement program is critical in the development and maintenance of supplier relationships, as it provides quantitative measurements that can be used to engage suppliers about improving their performance and incentivize them to do so (especially if high scores mean new opportunities for the supplier). Having a program that is well developed and executed helps keep suppliers focused on their internal process improvements, which will ultimately impact your organization’s business goals.
Supplier stratification should be an internal metric, where an organization takes other criteria (one of which can be the scorecard metric) and combines them to rank its suppliers.
Stratifying the supplier base of an organization allows for collaborative partnerships to be formed through the segmentation of the supplier base into smaller and more manageable categories. This feeds directly into the concept of strategic supplier relationships, in which you will be able to identify the suppliers that your organization targets to do business with, the ones the organization must do business with, and the suppliers that the organization could likely do without.
Many organizations that attempt to stratify their suppliers do so based on only one or two factors (usually landed cost and cost of goods sold). A more comprehensive methodology is a combination of taking the final rank from the supplier scorecard exercise and then adding a few more factors, as shown below.
Successful implementation of these concepts can have a positive impact on supplier relationships, operational efficiency and improvement of EBITDA. To learn more about these topics, including scorecarding criteria and reasons for stratifying suppliers, read the two-part series on supplier performance scorecards and supplier stratification recently published in Industrial Distribution.
Posted by Brad Vance, Senior Business Process Consultant, Epicor Software
Key emerging markets offer excellent demand for enterprise applications. This is especially the case with Brazil. The country’s ongoing economic expansion continues to place it at or near the head of emerging markets. Bill Adams, senior international economist for Pittsburgh, Penn.-based PNC Financial Services group, described the Brazilian economy in a recent Forbes
article: “Brazil’s economy is in a self-sustaining expansion. A tight labor market fuels persistent wage gains even in a slow economy, and these wage gains fuel higher consumer purchasing power and domestic demand and sustain economic growth.”
According to a recent report from Gartner, Inc.
, Brazil’s overall IT spending will near $124 billion (US dollars) in 2013, with IT modernization at the top of the list of priorities for Brazilian IT leaders. Furthermore, within the context of IT spending, the report also indicated that in 2013, ERP, CRM, industry-specific software, office and personal productivity tools, and e-commerce software lead the application software investment initiatives for organizations.
Such development is leading to an increase in customer-specific functionality (CSF) in software solutions, a trend underscored by the new release of Epicor iScala that integrates with the Epicor ICE Business Architecture to help customers gain increased agility, mobility, and flexibility while incorporating CSF functionality. “The new release of Epicor iScala represents a significant investment, bringing new capabilities designed to increase system performance, improve stability, and deliver long-term support for the latest technologies. This will enable our customers to realize even greater business value from the solution,” says Robert Sinfield, senior manager, product marketing for Epicor. “The increasing demand for enterprise applications within key emerging markets such as Brazil offers growth opportunities for Epicor iScala, while supporting our customers who are moving into this new market space.”
As companies increasingly target emerging economies as part of their strategic growth initiatives, support such as CSF is increasingly seen as an essential software component.
Posted by Robert, Sinfield Senior Manager, Product Marketing
Food Manufacturing interview with Tom Muth, senior manager of product marketing for process manufacturing, Epicor Software Corporation.
Food Manufacturing spoke with Tom Muth of Epicor Software Corporation about the challenges processors face regarding food safety and traceability, and how ERP software can help mitigate these issues.
Q: What unique challenges do food manufacturers face regarding documenting food safety and traceability efforts?
A: Food safety is seen as the single most important issue among manufacturers, and the demands to document information relating to food sourcing, material flow, traceability and more present an ongoing challenge. These complex demands have a real cost, one very critical to bottom-line profitability as major food retailers take on a larger role in controlling. Forward and backward traceability of processed products, batches and lots requires detailed tracking from the point of materials receipt throughout production and delivery to customer shelves. Food manufacturers also require strict ingredient and environmental control throughout the manufacturing process, driving the need for food manufacturers to have the flexibility and details recorded across lots, batches, co- and bi-products. Lastly, food manufacturers are increasing the value of traceability responsiveness to quickly and efficiently respond to recall events or customer inquirers within minutes versus days.
Q: How can ERP systems help food producers meet these challenges?
A: ERP systems are providing the means to meet these challenges while improving internal business processes. By providing a framework to meet regulatory compliance demands, ensure product safety and control costs, ERP is proving increasingly essential as a tool in the food manufacturer’s arsenal for traceability. The ERP role is automating traceability of ingredients from origin to the final customer, as well as speeding and simplifying the audit process. A holistic electronic quality management approach is essential for meeting the challenges associated with traceability and quality. With ERP systems such as Epicor Tropos, quality workflows are integrated from the time of a sales order, to purchasing, to production, into inventory and finally to dispatch. ERP maintains quality specifications, sampling regimes and QA test results from order to dispatch and also may dynamically link to material lot and product release controls to help control quality and ensure full traceability.
Q: What are some best practices food companies should put in place regarding their supply chain management to help their business succeed?
A: Food manufacturers can help improve their bottom line by having standardized procedures for order management and delivery fulfillment. Another is to have standardized workflow and procedures for production planning and execution, and to ensure their operations are integrated and coordinated with customer service, logistics and delivery to improve process visibility and improve efficiencies. By doing these best practices, food manufacturers can better manage items throughout the whole value chain: improve controlling and planning stock, production, packaging, and distribution; and improve the collaboration between departments to optimize production capacity, perishability, warehousing and cash flow.
Q: What are the latest trends with process manufacturing that food manufacturers can take advantage of to lower operational costs?
A: Some of the latest trends with process manufacturing that food manufacturers can take advantage of to lower operational costs include:
- Optimizing materials consumption (reducing waste)
- Extending shelf life of final products by speeding throughput
- Lowering energy costs through real-time visibility
- Benchmarking energy usage
Q: What should food manufacturers consider before implementing an ERP system?
A: Food manufactures should consider an ERP system that has been designed for their unique business requirements for the food industry and representative success in their particular segment. Effective food ERP solutions such as Epicor Tropos are designed for process manufacturing and have a built-in process model and recipe and materials management support aimed at driving efficiencies and improving margins specifically for food and beverage industries. The ERP system should also be able to monitor and manage the variable nature of yields and product quality, shelf life and accurately forecast, optimize scheduling, manage materials, labeling and transportation in order to properly fulfill order to promise with a short notice. Lastly, an ERP package designed for food manufacturers will also have industry-specific functionality designed to minimize customization and include support for date code management, rebates and commissions, consignment costing, day one for day one order and delivery, multiple product attributes and grades, retailer-specific packing, and catch weight labeling.
As the manufacturing sector continues to recover, the focus of operations is changing. The economic upturn has brought an end to low volume and harsh rationalization. Volume has suddenly shot up for many manufacturers, and now they face a problem much different from cost cutting: How to meet increasing demand after a long period of resource slashing and little or no investment in productivity?
Historically, businesses did one of two things to meet new demand: build capacity with capital investment or outsource. But there is a third option that is far less cost-prohibitive and more sustainable: meet demand with better utilization of assets on hand. This involves eliminating loss—random and chronic—to free up resources and capacity. To do this, manufacturers need accurate, real-time manufacturing information so they can uncover and prioritize production problems and create new capacity using the same resources they already have.
- Stop unplanned and operational downtime. In a world where reliability is key and unplanned downtime can cost thousands of dollars per minute, reducing unplanned and operational downtime can yield great results. In addition to financial savings, reducing changeover time and operational downtime leads to proportional increases in manufacturing capacity. Best practices implemented on a single line can often be transferred to similar lines, multiplying the impact and creating even more needed capacity.
- Wipe out minor stops. Minor stops are short hesitations and stops that are usually less than five minutes. They are short enough to be “unnoticed,” but long enough to have a significant impact on line performance and capacity. Minor stops can add up to significant loss, especially if you don’t have visibility into the frequency, duration, and reasons for them.
- Eliminate production variability and quality loss. Quality loss and rejected product has a double impact: material and labor. A standard overall equipment effectiveness (OEE) calculation includes a production reject as a lost opportunity for production, which impacts capacity. Therefore, when calculating OEE, consider the cost of both material and labor.
- Establish improvement priorities in a financial context. Not all downtime is equal. Applying cost information to downtime analysis may reveal a new perspective: the cost of downtime. A cost-of-downtime analysis can be used to establish priorities with a financial context. Moreover, a probability of success analysis across loss categories will prepare operations professionals to prioritize efforts and achieve sustainable improvements.
Bottom line: the best way to create capacity is to scrutinize line performance with manufacturing intelligence applications that monitor and analyze manufacturing processes accurately, and in real time. These applications provide crucial information to help find the capacity needed, without costly investments for new machinery, additional labor, or contract manufacturing.
Posted by Diane Murray, Manager, Product Marketing
In the game of baseball, there is a strategy of each player knowing who gets the ball and who they throw it to; no matter where on the field it lands. Not only is there an automatic response; the outfield is talking; the infield is talking; the outfield is talking to the infield, and a good coach is sitting silently because he knows his team is prepared and has the tools to get the job done. He knows that each player understands that when a ball is hit to center field, the center fielder calls it, catches it, and immediately throws to the second baseman. It’s automatic. This is a process that happens without thinking and that transcends departmental boundaries. Can the same be said of the plays that happen in your manufacturing business when your customers throw a curve ball with a new product line, a change in release date or added requirement?
For businesses with silos of information and fractured processes, the answer is ugh .. yet another change. But for those that understand the value of end-to-end ERP systems where business processes flow from department to department, change is like expecting a bunt when a man is on first base and there are no outs. The play is already set.
In today’s fast paced business environment, speed and the ability to quickly respond are many times the name of the game in filling customer demands. Manufacturers that deploy ERP systems that cover end-to-end business processes know immediately as the product ships what their profitability looks like on each production job for the customer and can in tune see historically, every time I ship this, how my profitability is improving.
How you may ask? These manufacturers are doing this by enabling their business data to flow from estimating to production to procurement and finance as well as production. This data is captured as it happens and every employee understands the benefit of accurate information – to not only help their business determine what customers to keep happy, but also to help their business determine what customers to charge more to or to fire. Each department doesn’t run as a silo, with its own systems to support it. Rather an ERP system supports the entire business and provides a natural flow of data between departments, not unlike the strategy deployed by a good coach. In the game of business, reduce the silos to see improved profitability. ERP technology can help. Epicor can help.
Please plan to join us this Wednesday at 1pm Central to learn more.
Epicor Webcast Event: Improve Efficiency by Streamlining Quote to Cash Process!
Posted by: Christine Hansen, Manager, Product Marketing at Epicor
Year-end is a perfect time for distributors to review their current Enterprise Resource Planning (ERP) software utilization. Here are some suggestions to get started.
First, make sure to stay current on the software build, confirming that you can indeed update. (Some blocks could be custom software and the like.) Many of the new features that come in with each Epicor Prophet 21 software build often go unnoticed. Make a list of each new feature with each build that you have missed by not staying current. Work through this list as to what is important, and what can save you time.
Then review your day-to-day processes. Ask questions such as, “Can we design the order entry screen with the new Epicor DynaChange features, adding new fields, moving fields with Field Chooser, creating a faster way to add carriers’ order types, and so on?”
Even more important is Demand Replenishment Planning—purchasing options for long lead times. Many times, buyers may be “tagging” items to be handled differently for long lead times, and then they extract data and manage it in Microsoft Excel. But these long lead time items can actually be managed directly in Prophet 21.
Smaller options such as item class and customer class will enhance reporting for items that need deeper review than just product groups. What about territories on customers? Did you know you can actually print invoices and sales history reports by territories?
Discount groups are available for possible use in sales pricing, as well as supplier price libraries. Are you using the “next break” option in purchase requirements generation, where the system can tell the buyer if buying up to the next break in quantity is a good investment or not? And are you combining customer libraries into your customer contracts?
What about “Go-Together” items? This feature is a great way to have the system add items that have previously been sold together, such as batteries with flashlights, so inside sales can recommend additional purchases. Of course, the sales staff knows to do this, but having the items pop up so they do not need to type them in is a big timesaver.
Image: As a customer order is placed for a Face Mask, Prophet 21 suggests that it “goes together” with Gloves.
How many of you use the available CRM (Customer Relationship Management) options: entering opportunities, seeing these opportunities in order entry, and tracking lost opportunities to competitors?
Looking at warehouse options, you can always rank your inventory by how many times you pick the items, making sure these items are stored close to the shipping area of the warehouse.
There are many options in accounting, as well, such as controlling customers’ credit, tracking ARO days, and ranking customers by sales and/or profits.
Implementing these options does not have to be an overwhelming task. With the help of a Business Process Consultant from Epicor, you can design an internal continuing education class for your users, focusing on shortcuts and new features.
Posted by Neil VanWalbeck, Senior Professional Services Consultant at Epicor Software Corporation
Mobile users are increasingly looking for ease of access to ERP information to perform their jobs on any device at any time. In this age of “Bring Your Own Device” or BYOD, smartphone devices and tablets are becoming more secure, accessible and affordable. To meet these needs, mobile solutions must handle different mobile devices and applications for different roles/jobs and also have the ability to be used by staff with limited computer or language skills in adverse conditions (i.e. variable lighting, distractions/interruptions or potential for device to be damaged).
There are many different mobile device options available today and choosing one to fit your mobile strategy depends on a number of factors. Cost, environment, signal access, security, and function should all be taken into consideration for this decision. Some commonly used types of mobiles devices include:
- Handheld. Handheld mobile devices have been around for many years; typically they have a gun or PDA form with a scanner. Usually these can be found in warehouses or shop floors because they stay within the organizations infrastructure and not meant to be used in the field.
- Purpose built device. Purpose built mobile devices are usually built around either specific company requirements or functional requirements and tend to be very expensive and used for both internal and external processes.
- Smartphones. Smartphones are easy to acquire and use, and consumers are looking to use these devices to access and process ERP data. This is one of the main drivers for companies to start developing mobile strategies outside of the typical mobile needs.
- Tablets. Tablets, like smartphones, are easy to acquire and use, but are more powerful and have larger touchscreens. Tablets today, can and do take over a lot of ERP functionality that was traditionally done on workstations back at the office. They are seen as the next evolutionary step in this process.
Instead of having to go to a traditional workstation to access certain items, mobile users are quickly able to engage in their day-to-day activities and work more efficiently. Aside from user pressure to be able to access ERP data, we also see influence from companies to gain operational efficiencies and the ability to provide a competitive differentiation as drivers. Mobile use allows better communication and collaboration for the whole organization, and by having these real-time transactions in executive hands, there is a shorter time for decisions, which helps gain the efficiencies that are required by the organization.
Users are demanding to be able to interact with their ERP data anywhere from any device. Balance that with the need for organizations to secure the data to make sure it is accurate by applying workflow to business processes. Mobile access will become more common and the primary way end users will access ERP applications. As this becomes more mainstream, companies are already reaping the benefits in increased productivity, greater efficiencies and lower cost.
Posted by Sanjay Ejantkar, Sr. Manager, Product Marketing
Every documentation team gets stuck in a rut, working heads down, trying to meet deadlines and at the same time produce the best quality content. This workflow doesn’t just apply to groups creating application help, but can relate to marketing writing groups or even your own internal departments creating company-specific documentation.
So what are you missing when your head is down and your nose is to the grindstone? Stop to check with your end consumers that what you are producing is what they are expecting and need. Here at Epicor, we have several different ways to make sure we are soliciting feedback from our consumers.
- Epicor provides an easy means of communication. Within our application help and embedded education courses, we provide a link to send content feedback directly to us (email@example.com). This comes straight to the management team to address, and if valid, to schedule updates. We also have email links on our Epicor extranet, EPICweb. Customers, partners, and employees use this site to contact us regarding not only the documentation available, but also education courses and classes.
- Epicor University booth at annual Insights user conference. This might not pertain to all of you out there, but we always make sure we have a booth at our user conference and spend countless hours chatting with our customers and gathering their suggestions and feedback. We’ve created many lasting relationships during these events.
- Customer lunches during Insights user conference. Months before the conference begins we solicit the Epicor User Group presidents to poll their membership for those who may be interested in a more private atmosphere to discuss our current offerings, discuss strategic initiatives, and again, build relationships. Anytime you can get some one on one time with your consumers – take advantage of it!
- Documentation Feedback Committees. This is something we just started here at Epicor this past year, and it came from an idea offered at one of the customer lunches at Insights. We’ve been meeting for the past five months with members of the Epicor ERP User Group. There are two of us from the Epicor University team that meet with the five members. Each month, we as a committee choose a type of documentation to review. We send a sample out about two weeks before the meeting so the users can have plenty of time to review any unfamiliar content. The meetings are scheduled around the same time of the month for one hour. During the actual meeting, we all join an online conference and review the material, and the Epicor team takes notes on the feedback, answers questions, and provides answers about why the content looks the way it does. This has been an invaluable resource for Epicor ERP, and we are in the process of launching the same program with our Prophet 21 customers.
My message this month is simple -- keep your consumers in sight– find a way to work with them and make it easy for them to help you help them.
Posted by Staci Cummings, Senior Content Manager, Epicor University
About 60 miles west of Columbus, Ohio, situated along the banks of the Muskingum River, lies a picturesque town of 25,000 known as Zanesville, Ohio. Rich with history, Zanesville was a notorious a hub for bootlegging activity during the Prohibition Era. These days, the town is known for a far tamer vice—it’s home to the New Bloomer Candy Company, which was founded in 1879 and has been delighting children and adults of all ages with their signature chocolates and candies ever since. A few years ago, New Bloomer realized there was one area of operations in need of significant modernization: their legacy computer system and enterprise resource planning (ERP) system.
As a small, seasonal business, New Bloomer’s orders vary greatly depending on the time of year. From January to September, bagged candies are in high demand, while chocolates are the most popular products during the holiday season. In order to ensure they have enough resources to fill orders from one season to the next, the company must diligently monitor inventory levels and compare them against the lead time of the orders they receive. If there isn’t enough product on hand, employees must be able to determine how much they need to import from other suppliers, or what ingredients they need to purchase in order to manufacture additional products on-premise.
In the past, the homegrown system New Bloomer used did a poor job helping staff meet this challenge. Knowing they needed a better way to run the company’s manufacturing and planning processes, New Bloomer began to evaluate new ERP solutions and chose Epicor Tropos.
One of the biggest immediate benefits of Epicor Tropos was a vast improvement in employee communication. New Bloomer has two separate locations: they repackage imported candies at one facility, while chocolate products are manufactured at another facility five miles away. Both facilities need to communicate effectively in order for things to run smoothly. In the past, however, all communication took place via phone, which slowed things down significantly. With no access to crucial data, such as how much of a certain product was on hand, employees had to rely on managers to look up the information they needed in the system.
With a new ERP system, all employees have real-time access to all information they need. This includes work orders, current inventory levels and when orders placed for additional ingredients are expected to arrive, which lets staff know when they’ll have enough materials in stock to fill customer orders.
The ability to view all of this data has helped improve the New Bloomer’s relationship with their customers. Employees can now provide up-to-date information on work orders at any given time, so customers calling in for details can be immediately informed of any shortages or delays. The system also helps New Bloomer avoid any repercussions from shortages by allowing them to easily substitute one product for another so a sale can still be completed.
Another significant benefit is the system’s lot control abilities. In the past, racks of outdated products would pile up because New Bloomer’s old system wasn’t able to alert them when items were near their expiration date, which cost the company anywhere from $20,000-$40,000 per year. Now, Epicor Tropos delivers two sets of reports periodically: one for items that have expired, and one for those that will expire soon. This allows New Bloomer staff to quickly move products that are close to expiry so they don’t lose money, and has greatly reduced the amount of products they have sitting in their warehouse at any given time.
As a result, the company was able to reduce their inventory from $1.6 million at the end of 2011 to $1.2 million at the end of 2012, largely due to Epicor Tropos. “The system helps us control our inventory better so we’re not bringing in truckloads of product we don’t need,” says New Bloomer Controller Michael Montgomery. “We’re doing a much better job there.”
With Epicor Tropos, New Bloomer has not only modernized company operations and made their business more efficient—they’ve also given their employees greater control over their jobs, which has led to a renewed sense of pride.
“[The staff] own their jobs because they know where the information is and they can look it up themselves,” Montgomery says. “We’ve changed the culture here, just with this new ERP system, because now people have more knowledge than they’ve ever had.”
Case study by Victoria Garment, courtesy of Software Advice, a trusted resource for buyers of MRP systems
Take the survey and receive access to LNS Research’s Performance Management Research Library for one year, and the benchmark report in early 2014
Click here to take the survey now. Deadline November 15, 2013
Manufacturing executives and managers face many challenges today in improving and optimizing business performance. But with so many metrics available to measure production, it can be difficult to know which are really driving the most value, along with how to best put in place metrics programs and supporting technologies that can accelerate results.
In conjunction with MESA International
, LNS Research
has launched the biennial ‘Metrics that Matter’ research survey. The 2013-2014 survey and research report is focusing on the trends and correlations between specific operational metric improvements, the use of Manufacturing Operations Management (MOM) software applications, role-based metrics reporting, and the effect of emerging technologies such as mobility, big data, and cloud computing on metrics programs.
Metrics are a critical component of achieving Manufacturing Operational Excellence. As a manufacturing professional, you’re tasked with not just maintaining existing metrics, but identifying ways to improve them as well. Once you understand your organization’s current performance, benchmarking your progress against peers and industry best practices is a critical next step in the journey.
By participating in the survey, you will receive access to LNS Research’s Performance Management Research Library for one year, as well as the benchmark report in early 2014. The opinions and observations shared in the survey are invaluable, and will help give insights into the most important trends today around metrics, programs, processes, technology, and more.