With E-commerce growing rapidly, it’s important to pay attention to various causes that slow down performance of an e-commerce system while consuming time with processes and integration issues.

Integration Issues

Data is interpreted from different sources to help make decisions that most likely affect BI. Timely access to accurate information and business intelligence  is required, so that it’s easier to understand how e-commerce solutions are supporting profit margins and growth in sales.

Prohibit Growth and Expansion

E-commerce growth means hiring new employees, developing new product lines and expanding into new markets. New employees need access to higher end data systems to run operations such as analyzing web analytics, without having to call technical support for each issue.

Manual Process

Manual processes to complete simple transactions cost time. Integrated system should automate shipping and tracking from the moment customers put in order to the moment the product arrives at their doorsteps. An integrated e-commerce platform should track and synchronize inventory along with orders. It should also track profits and losses with an effective accounting system.

 

If any of these issues persist in businesses they should consider upgrading to a more integrated e-commerce solution that will support them as their business grows.

Reference : http://www.erpnews.com/4-eye-opening-signs-indicate-time-upgrade-integrated-e-commerce-solution/

Every time a new method is introduced to a production process, times and human powers are supposed to be saved. Boeing’s new automatic production system, Fuselage Automated Upright Build (FAUB) has been online for more than two years and now is facing serious challenges due to incomplete jobs done and errors during assembling process.

In the past, fuselage sections were built simply by hand. It was a hard work and posted a great danger to worker’s safety. With the help of FAUB, Boeing reduced half of the injuries reported during the automated production process, according to an old news posted on Boeing website. More than that, Boeing also expected this new process can save build time and increase first-time quality.

However, things have turned south lately. Workers in the final assembly line find out FAUB leaves many incomplete jobs. In order to fix this situation and keep up on schedule, these mechanics now have to work over time even on holidays.

On the other hand, in a report on Seattle Times, the management level thinks it is not only FAUB’s faults but also supplier’s issues. Although the executive did not explain exactly how suppliers messed up with FAUB system, it sounds like a pushback. If unfit materials are the reason, shouldn’t they have already known that once the planned order was created?

This news reinforces the idea that innovation can be groundbreaking; still, to make it work, prudence and thorough understanding are vital. I surely hope FAUB will be successful one day.

Master Data Management (MDM) is “a set of disciplines and processes for ensuring the accuracy, completenessand consistency of the important types of reference data in the enterprise, across different applications (ERP, Financial software, Planning software…) and across multiple business processes, functional areas, organizations, geographies and channels.”

Therefore, insuring a good management of our master data will lead to a consistence and valuable use of our ERP system. In this post, we will present the top 5 reasons that can lead us to encounter problems dealing with the SAP ERP system within a global enterprise architecture. Meanwhile, please keep in mind that MDM operations are wider than the ERP itself: it goes beyond one application to ensure data consistency across platforms (from different vendors).

1. MDM capabilities provided by one single ERP vendor is not flexible enough to deliver consistency for other applications.
2. Master data is critical and can’t be proactively managed within an ERP system but needs independent capabilities.
3. ERP products were not mainly designed  to support MDM operations,  instead the they present MDM as add-ins features to handle data.
4. Mastering your data in an ERP is much more difficult with more than one instance (or with different ERPs altogether).
5. Not using a decentralized, independent MDM hub to have a workspace between the transactional and analytic systems (please check my OLTP OLAP: a small clarification article). The hub will help to perform data management operations in the back office systems and the data warehouse.

 

Figure: Informatica White Papers

 

Conclusion: ERP systems are simply not the right place to master data. Despite all the positives of ERP, flexibility is usually not associated with it. ERP doesn’t offer the tools to manage master data in the ways required by today’s complex organizations. Although it excels at transaction processing, it isn’t designed for active management of critical master data. Therefore, the use of an MDM Hub is mandatory to support complex enterprise applications.

The production process is the process of assembling items into finished products. There are two main types of production approaches: make to stock and make to order. In the make to order approach, the production of a good is the result of a customer placing the order. In the make to stock approach, the production process occurs when inventory levels fall below a certain threshold, even if there is no customer order.

A make to stock approach can enable cost efficiencies by allowing companies to buy materials in bulk, but it also requires careful demand planning for a product. If demands for a product are over-estimated, there will be a lot of finished goods inventory sitting on the shelf, and if the demand for a product is underestimated, then customers will be unable to buy the product at that given time.

With the make to order approach, a company doesn’t have to carefully plan the demand for a finished good, but needs to plan out the purchasing or raw materials. The make to order approach enables the personalization of goods, whereas the make to stock approach doesn’t.

 

A Make-to-Stock company carries finished goods in its inventory in an anticipation for order. Most of such companies promises quick delivery, typically either same day or the nesxt day.

But the problem of course, is guessing how much each of the finished goods to keep in each stock unit. Too high stock can tie up the company’s cash and consume space, also the risk of obsolescence. Too low may incur in lost sales and unhappy customer.

There are four primary factors that influence the amount of finished goods carried by a Make to Stock company.

 

1. Reorder Point:  We must carry enough stock to cover the variability of our demand over the reorder point time.   For example, assume that our lead time to reorder is three weeks, with average demand of 100 units per week.   We have scheduled our production at 100 units per week.   We would, therefore, need to carry a “safety stock” level of inventory sufficient to cover the historical variability of demand over this three-week period.
2. Production Lot Size:   If our planned production lot size exceeds the typical order quantity, some amount of finished goods will remain in stock between deliveries. Let’s assume that our average shipping rate is 100 units per week, and our production lot size is 400 units.   On average, we would have 300 units left over when our production lot arrives.   These would last for approximately four weeks and obviously effect our level of finished goods inventory. Therefore, The greater the lot sizes, the greater the resulting average inventory level.
3. Production Reliability (on-time completions): The poorer the reliability of on-time completions, the greater the level of finished goods inventory required to assure the targeted service level.
4. Variability of Demand: The amount of inventory required to avoid a stock-out is considerably less if demand varies from 90 to 110 every week, vs, varying from 0 to 300 per week.   There are many components that cause variability of customer demand.   Some of those components are within our control. Others are controlled by customer marketplace.

Given this factors that affects the make-to-stock companies, it is easy to make goods that can’t be sold, and not to make goods that could be sold.  The net effect is to reduce potential throughput.

When choosing an ERP software, companies have countless options on the market today, both proprietary and open source. But the main ones that most people talk about are the big three: SAP, Oracle, and Microsoft Dynamics. Being unfamiliar with all three I decided to look into what the differences are amongst them.

SAP

For me, SAP is the face of ERP software. They are popular with large enterprises that are global and complex in organization levels. Since SAP primarily built its product from the ground up, the various software components are very much standardized and are known to function well together. However, enterprises will have to rely on third party vendors if they need significant customizations for their business needs. As a result, it can become rather expensive.

Oracle ERP

I actually didn’t know Oracle had an ERP product before looking more into this topic. That’s most likely because Oracle acquired other companies with ERP components rather than building one in-house. This approach lets Oracle reach niche markets by obtaining small software companies that cater to specialized needs. Oracle tends to be favored by mid-sized companies that want a more flexible implementation process (as compared to SAP) and have unique needs. It’s noted that Oracle is rated as the most expensive system.

Microsoft Dynamics ERP

Microsoft is somewhat of a hybrid between SAP and Oracle when it comes to their ERP software creation. Microsoft acquired an accounting system software back in 2000. Since then, they have built on it and turned it into a line of enterprise planning software. MS Dynamics works well for small and mid-sized companies due to its simple implementation and similarity to MS Windows. It also offers lots of customization abilities and integrates well with other MS products. Though, users have mentioned that it can take longer to install and tends to have issues integrating with non-MS products.

This post focusses on one of the value creation process – Production and key elements of production master data: Bill of Material, Product Routing and Work Center.

In a brief the entire Production Process can be summarized as following:

Generally Production is either of two types: Make to Stock and Make to Order. If the company produces Make to Stock, the production is triggered when inventory and warehouse report of low inventory, and if company produces Make to Order, the trigger is a customer order.

This trigger leads to Planned Order that converts to a Production Order. This conversion results from the Optimization of Production process to achieve high efficiencies. The Production Order contains all the information to produce the finished good. As the Production Order also includes the Bill of Materials for the production, which can detect insufficient raw material/semi-finished goods and further trigger procurement/production processes respectively.

Items mentioned in Bill of Material are received from inventory with a Goods Issue and similarly, produced goods are stored in inventory as Finished/Semi-finished with a Good Receipt. Finally the process ends with Conform Production Order that records the cost occurred in the production to compare with Planned Order and determine the actual worth of the product produced.

Any business can benefit by integrating its data systems, but due to their complexities, B2B organizations with eCommerce channels in particular should consider the advantages.

eCommerce has already changed the way companies do business and interact with their customers forever. Online stores have a number of benefits for customers and retailers alike. But maintaining an online storefront can quickly become an enormous, time-consuming hassle for retailers if their storefront isn’t linked to their ERP system.

This is because not having an integrated ecommerce and ERP doubles the amount of work retailers have to do. They have to manually enter and update information in both their online store and their ERP system. Not only is this a huge waste of time, it makes it much more likely that mistakes will be made, or that duplicate data will be entered.

Benefits of eCommerce ERP Integration

1. Reduce manual entry to save time and increase output while reducing errors, when entering order, inventory, item, customer and shipping data.
2. Streamline inventory synchronization, track updates, and provide accurate inventory levels to customers, without hiring staff to manage these tasks.
3. Automatically notify customers when orders have been shipped and allow them to track the delivery of products.
4. Simplify how you manage price and product changes to inventory.
5. Be flexible enough to add multiple online (web-stores and marketplaces) and offline (brick & mortar) sales channels, without losing operational efficiency.
6. Handle increased demand in online orders without extra resources.

In general, having accurate, up to date customer and order information makes it easier to provide great customer service.

Reference:

http://www.briteskies.com/integrations/

ECommerce and ERP Integration: streamline your business operations by leveraging back office data

http://www.aphixsoftware.com/2016/02/ecommerce-erp-integration/

ECommerce & ERP Integration

 

Make to order and make to stock may seem similar but are different processes. Make to stock is triggered by a need to increase inventory and make to order is triggered by a need to fulfill customer order. Make to order business model was made popular by Dell computers.

Replacing inventory with information such as accurate forecasting helps in having an agile supply, which is at the same time flexible enough to adapt to any changes in the supply and demand. Having excess levels of inventory increases storage costs.

Dell Computers pioneered the Internet-based direct sales model for its personal computers which was highly successful in the 90’s and early 2000. Dell stood out from other computer makers which followed the make to stock model. The just in time strategy (JIT) of Dell made it possible to operate with lowest levels of inventory. The make to order model further reduced costs by removing middlemen such as retailers and wholesale distributors. The internet based direct sales model also generated a huge amounts of market data which Dell used effectively to forecast sales. This ensured Dell to be a market leader for a very long time.

However, in recent years Dell sales have dropped and Dell is trying to reinvent its supply chain by focusing on what it calls segmented supply chain, that is offering different solutions based on customer needs.

http://www.manufacturingnews.com/news/98/0703/art1.html

http://www.industryweek.com/blog/dell-reinvents-its-supply-chain

ERP has always been about transactions and tasks.It has provided businesses with control that they need to manage supply chains and production lines. Business terrain is changing, e.g manufacturing is no longer based on historic patterns and duplicate processes.In 2017 businesses need to respond quicker according to market demand and deliver products faster.However there are few indicators that possess threat to legacy ERP systems.

From adaptive manufacturing to prototyping ,new technologies are changing  ERP industry for good e.g. additive layer manufacturing ,has potential to change how production line works, allows to assemble components and make shapes that cannot be made with traditional methods.

Many enterprises are  planing to adopt IoT technologies.By connecting machines,warehouses and products,it’s possible for them to create smarter production systems that can monitor and control processes throughout  production line requiring minimum manual intervention.

As apps become important to interact with technology ,next generation employees prefer an app like interface over ERP systems.These preferences will penetrate world of software and change how businesses work with ERP software.

Hence above mentioned facts will prompt businesses to address new pressures,set new priorities for growth. ERP software may become obsolete but an intuitive resource planning , will play an important role in 2017.