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Guide for companies who need ERP intergration

Guide for companies who need ERP intergration

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2011 erp-buyer-s-guide-for-medium-and-large-manufacturers 2011 erp-buyer-s-guide-for-medium-and-large-manufacturers Document Transcript

  • Technology Evaluation Centers2011 ERP Buyer’s Guidefor Medium and Large Manufacturers
  • ERP for Medium and Large Manufacturers: A Buyer’s Guide is brought to you in part by our media partners R IT FOR MANUFACTURING EXECUTIVES
  • Table of Contents 5 Preface By Anna Wells, Executive Editor, Manufacturing Business Technology 6 Business Software Challenges for Medium and large Manufacturers By Gabriel Gheorghiu and Aleksey Osintsev, Technology Evaluation Centers 20 Product comparison 32 Epicor Customer Success Story Energizer Holdings, Inc. 35 Thought Leadership What ERP Strategy Is Right for You? 38 Sage Customer Success Story Sage ERP Accpac 42 Sage Customer Success Story Sage ERP MAS 46 Thought Leadership An ERP Guide to Driving Efficiency 53 SAP Customer Success Story Nuestro Queso Start-up Leverages SAP® Business All-in-One Solution to Facilitate Astonishing Growth
  • 58 Thought Leadership SAP’s Perspective on ERP for Manufacturing 62 ABAS Software AG Customer Success Story Embracing Global Change with abas Business Software 67 Ignify Customer Success Story Microsoft Dynamics AX Customer Solution Case Study Popular Consumer Craft and Education Brand Creates a Mold for Future Profits 73 Thought Leadership Ten Critical Questions to Ask a Manufacturing ERP Vendor 78 Junction Solutions Customer Success Story Peet’s Coffee & Tea Sets Direction for Growth with Outstanding Quality 87 VAI Customer Success Story S2K for Manufacturing Lights the Way for Architectural Lighting Corporation 91 Product Insights Microsoft Dynamics AX 2012: A New Generation in ERPERP for Medium and Large Manufacturers 102 Vendor Directory 4
  • Preface The latest Manufacturing ISM Report on Business, assembled by the Institute for Supply Management (ISM), affirms that economic activity in the manufacturing sector has expanded for the 20th consecutive month, and the overall economy has grown for the 22nd consecutive month. Economic trending in our industry continues to be positive, but manufacturers are still proceeding with caution: while many are ramping up production, they are still very reticent to hire. And while the recession may be over, we’ve emerged to face what experts refer to as the “new normal.” The new normal means an increased focus on streamlining costs and processes, as well as improving the visibility of data and best practices enterprise-wide. Manufacturers aren’t content to let potential cost savings hide in the dark corners of their facilities anymore. Based on this increased need for visibility, we are seeing more and more movement from manufacturing in the area of high-tech investments. A few of these specific trends include • equipment upgrades in the area of automation, instrumentation, and robotics, which have allowed certain verticals to remain competitive as global markets raise the stakes; and • improved efforts to research and fully understand the benefits of technology advancements in areas such as enterprise and business management software, cloud computing, sophisticated supply chain management, and social media. As manufacturers take a closer look at how high-tech solutions will improve their long-term business goals, expect to see a more resolved effort to find and obtain the kind of skilled labor force necessary to implement and maintain these systems. A labor shortage in this area might be the most salient issue facing manufacturing today. In the meantime, we suggest end users look closely at the solutions available in order to select the ERP for Medium and Large Manufacturers specific technologies that will be the most effective at targeting cost centers as well as potential gaps in efficiency. As we see from the monthly ISM reports, manufacturing is on the uptick. That said, we sincerely believe the real momentum will come from the manufacturing sector’s ability to assess and implement new high-tech solutions to improve its competitiveness on a global scale. Anna Wells is the Executive Editor of Manufacturing Business Technology (www.mbtmag.com)—an electronic media resource reaching an audience in manufacturing and the supply chain comprising corporate, IT, and operations management. Manufacturing Business Technology is an Advantage Business Media property. 5
  • Business Software Challenges for Medium and Large Manufacturers Medium and large manufacturing companies face many challenges that threaten to disrupt the operations, processes, and growth of their business. These challenges relate to the use of legacy systems, ensuring legal and regulatory compliance, (re)engineering of business processes, the impact of mergers and acquisitions, offshoring and re-shoring initiatives, limitations of information technology (IT) infrastructure, and the advent of social media and collaboration. In addition, these manufacturers must continuously respond to changes to the supply and demand of consumer products—brought about in part by disturbances to the economy, presence of competing products, and changes in the attitudes and needs of consumers—all the while aiming to reduce costs, increase profits, and remain competitive. They must find ways to alleviate redundancy within and quicken the pace of their production cycles, improve visibility throughout the product lifecycle process, and reduce their time to market to maintain a competitive advantage. To address the challenges in today’s business market, medium and large manufacturers often look to their enterprise resource planning (ERP) system, the proper functioning of which affects all aspects of the business nolens volens. These companies need a robustERP for Medium and Large Manufacturers ERP system that can handle complex operations across departments, the exponential growth of data, etc., optimally integrating all aspects of the business into one coherent system to facilitate the entire manufacturing process. 6
  • As manufacturers grow in size, so does the complexity in running the business, making it moredifficult—but necessary—to address these important issues and sustain profitability:Use of Legacy Systems: Many medium and large companies were in existence prior to the availabilityof comprehensive software solutions. These companies sustained their business activities by usingseveral small software products, which were not well integrated, cost-effective, or user friendly, andwhich generated large amounts of unstructured data. These relic systems, known as legacy systems,cannot meet the complex needs of today’s medium and large manufacturers and are largely obsolete.However, many companies continue to use them.Compliance with Laws and Regulations: As companies continue to expand their businesses to newproducts and frontiers, the more complicated it is to comply with local and international laws andregulations. This is particularly important to the manufacturing sector, where there’s potential to affectall major activities, from procurement and production to distribution and retail, asset management,and human resources.(Re)engineering Business Processes: Medium and large companies must continuously adapt to theever-changing business environment by defining new workflows and procedures and restructuringexisting ones. As companies become larger, more people, assets, and partners will be involved inany change dictated by the market, not only draining the company’s resources and finances, but alsoexacerbating the logistical complexity of defining, testing, and implementing new business processesacross multiple business units.Impact of Mergers and Acquisitions: Through mergers and acquisitions, companies realize growthand expand their business activities. During this process, however, companies must integrate theoperations of different departments, plants, or sites, which often operate in different languages andregions, and use different business processes and software solutions. This process becomes only morecomplicated as the size of the companies involved in the deal increases. And any issues that remainunresolved following a merger or acquisition have the potential to derange all entities. ERP for Medium and Large ManufacturersOffshoring and Re-shoring Initiatives: Globalization and the need to reduce production costs haveforced some companies to move some or all of their production facilities to a country with lowerlabor costs. Companies with headquarters and subsidiaries or plants on different continents can facedifficulties in managing activities, such as quality control and delivery time.Limitations of IT Infrastructure: Despite the potential advantages of software-as-a-service (SaaS)solutions, such as no need for supporting hardware or IT personnel for maintenance, medium andlarge manufacturers oftentimes use a combination of SaaS and on-premise solutions—if not only on-premise. However, large businesses still face several limitations with cloud computing due to their size,scale of businesses, and previously deployed solutions. 7
  • Advent of Social Media and Collaboration: The advent of social media and collaboration not only directly affects the core activities of manufacturing companies, but also provides the social tools for obtaining feedback (internal and external) to enhance customer service and product development. Collaboration with business partners can increase operational efficiency, but privacy issues may present important concerns. This buyer’s guide takes an in-depth look at the major challenges facing medium and large manufacturers, and how the use of a comprehensive ERP system, with a strong supporting environment, can help address these issues and spur the growth of the business. Bigger Is Complicated For the purpose of this Buyer’s Guide for ERP for Medium and Large Manufacturers, we define medium and large companies as those enterprises with more than 500 employees and more than $100 million (USD) in annual revenue. Companies of this magnitude usually operate within a multisite or multinational environment, and necessitate a system that addresses their multidimensional reality. It is erroneous to think that large manufacturing companies simply produce many more finished products than small companies in the same industry and that the challenges both types of companies face are proportional to their size. The truth is that the complexity of a company’s operations increases exponentially relative to its size. Larger companies need to manage not only more inventory, sales transactions, people, but also different software solutions, business entities, multiple levels of management, national and international laws and regulations, local cultures, and unwritten rules. The interactions among all parties involved, whether within or outside the company, are so numerous that managing them becomes extraordinarily difficult.ERP for Medium and Large Manufacturers To add to the complexity, customer behavior and needs are constantly changing, technology is advancing at a very fast pace, and companies keep accumulating large amounts of data that, if not managed properly, verge on becoming overwhelming. Addressing the Challenges To accommodate the aforementioned changes without jeopardizing their business activities, medium and large companies must address the following challenges: 8
  • Use of Legacy SystemsLarge businesses pioneered the first corporate software packages some 30 to 40 years ago,the tools of which were cumbersome, extremely expensive, and only affordable to largeorganizations. Later on, with the emergence of less expensive and smaller-sized computingdevices, organizations and businesses of lower scale started using ERP software.These software remnants, many of which are still being used and are running well today,are referred to as “legacy applications.” Although many users are still satisfied with theselegacy systems, companies are finding them increasing difficult to maintain every year andwant to build on them—they are incredibly stable, customary, and extremely reliable, butare dramatically outdated, inconvenient, and inflexible.Two strategies are available for resolving this situation. The first is the revitalization of theexisting software, including upgrades (with new user interfaces, features, and functions),and addition of newer technology pieces. The second is the complete replacement of thelegacy system with new systems. But for large businesses, even the smallest change is notan easy matter.Over the years, companies have built complex software structures composed of dozens orhundreds of integrated applications located on dozens or hundreds of remote sites, withcomplicated multilayer interrelationships and with thousands of partners, customers, andvendors. Thus, any amendment to a legacy system automatically entails a massive andcomplicated project.For example, if we consider that we have 100 manufacturing and distribution facilities(which is not something unusual for a large company) and multiple physical locations(which often operate with various legal entities within the holding, and those entities haveto be included into the same informational space of the ERP system) and that for eachsite, a system upgrade or replacement project would take, on average, one month (a too ERP for Medium and Large Manufacturersoptimistic scenario), we can see that it might easily take eight years to upgrade or replace asystem. Although many projects can be done simultaneously, updating a company’s legacysystem remains a massive multi-year commitment for large organizations.In addition, during the time it takes to replace a system, the company’s businessenvironment may undergo dramatic changes, with ensuing changes to the generalstrategies and IT approaches of the company, which in turn may prolong the timeline ofthe project and call into question the viability of the project in the new company climate.All projects should thus be done as fast as possible, no matter the size of the company, andfor larger enterprises, this becomes a more intensive and expensive task. 9
  • Compliance with Laws and Regulations Businesses must address various compliance regulations and standards (regarding, e.g., areas such as payroll, financials, asset management, training, hazardous materials, as well as local, national, and international rules and regulations) and avoid paying hefty penalties and fines. As medium and particularly large companies often operate in more than one region or country, they must follow the rules of the governing legislation while complying with various security, financial, safety, workforce, and many other local, national, and multinational standards. These regulations are intended for the general purpose of providing a business environment that stimulates and often directs the production of goods and services that are of the highest quality and are safe for consumers, society, and the environment. And, of course, different countries have different regulations. Even in countries with similar general compliance standards, differences in specific regulations exist, as, for instance, in the layout of safety documents or the details included in accounting reports. Conformance regulation rules bring an additional layer of complexity to large multinational businesses that produce a wide range of products or render multiple services to their customers. The myriad compliance requirements must be stored, maintained, and properly applied and followed, and corresponding transactions typically need to be fully auditable. For large organizations, it is also important that internal standards, policies, and procedures be subsumed under the compliance standards of the governing legislation. Although internal rules are typically created with regulatory requirements in mind, they can be extended and modified based on the company’s specifics, strategy and standards, best practices, and traditions. And it is expected that all company branches and subdivisions will be compliant with these rules. To leverage numerous standards and official requirements is not an easy task. LargeERP for Medium and Large Manufacturers organizations often assign a dedicated chief compliance officer and whole departments for managing and tracking compliance-related problems. The situation is less complicated for smaller companies that follow the compliance requirements of a single country. In addition, the business software currently in use is thought to be designed with compliance considerations and with the capability for adjusting to changing business processes and procedures in the face of legislative changes. Manufacturers must comply with governmental rules and regulations regarding the manufacturing, tracking, and storing of their products. As such, business processes must be designed in accordance to the governing legislation and standards. A central repository that hosts compliance documents and standards is strongly recommended, and an ERP system 10 could be a good tool for integrating business processes with supporting documentation.
  • On the other hand, as compliance standards are usually divided by vertical industry and insome cases by market niche, it makes perfect sense for medium and large manufacturers toconsider switching to a new ERP system that is specifically designed or deeply configuredto that vertical industry. Such vertically-oriented software packages usually handlecompliance issues better and with more ease than broader packages.(Re)engineering Business ProcessesBusinesses must be able to quickly and seamlessly integrate their changing processes (dueto changing customer needs and slow reaction from vendors) within their operations tomaintain their competitiveness in a fierce market. Business effectiveness considerationscan lead to the adoption of the parsimonious production philosophy known as “Lean.” Asone area or department of the business changes, with the supporting systems in placeother areas or departments can easily follow.In recent years, the ease of accommodating changes to the business environment hasbecome one of the most important capabilities of ERP software for companies of anysize and in any industry. This applies particularly to large and upper segments of mediumenterprises. There are a few reasons for this.Firstly, businesses often need to be able to perform massive and widely expanded operationsor transactions in different ways, depending on factors such as geography, generallyaccepted business practices in certain locations, or regional regulations. Software systemstherefore should have the technical capability to accommodate a variety of proceduresthat allow for performing the same business process in different ways.Secondly, businesses often face many high-impact changes to their processes. A companyhas to be competitive and be able to quickly adapt its current processes to constantlychanging business environments. For larger enterprises, this becomes an especially difficulttask given the scale of the organization, number of sites, processes, and users. ERP for Medium and Large ManufacturersThus, flexibility and versatility are vital attributes of software systems catering to theseorganizations. Other important attributes include an easy-to-learn and non-anfractuoususer interface with a decent logic, along with user ability to modify screens, existingdocuments, and material flows.Certainly, the more readily the system can adapt to a change that reflects the newbusiness reality, the better and more effective the ERP system will be. Moreover,organizations that have a thoroughly planned business process structure in placeduring the implementation phase would enable the sharing of ideas and informationamong the distinct business units and subdivisions of the company, thereby facilitatingbusiness transitions. 11
  • Impact of Mergers and Acquisitions Mergers and acquisitions can have a substantial impact upon the organization. The company’s IT systems must be able to address these changes quickly and seamlessly. Mergers, acquisitions, and consolidations are the reality for businesses of all types and sizes, with large organizations seeing an inordinate level of involvement in these deals. Technically speaking, an acquisition or merger is a fairly complex endeavor, and it leads to massive changes in nearly all aspects of a company’s internal processes. An integral component to the business, the ERP systems of the companies involved in the deal must be able to address the aftermath of such gigantic business activities. Merger or acquisition activities are associated with a number of major decisions, and those relating to the ERP system have to do with what system will be used subsequent to the deal and how. For the newly established enterprise, the choice becomes one of accepting one of the currently existing ERP systems as the new standard and retiring all others, implementing a brand new ERP software, or integrating the existing applications. Though all these strategies are viable, they require huge efforts from IT and other subject matter experts and may take years to accomplish. Better financial results, synergistic business activities, more effective product development, and better overall company cost management (economy of scope and economy of scale) are among the major declared goals of mergers and acquisitions. However, those targets are not easy to reach from the ERP perspective. Again, the large scale of the business presents a major challenge in this regard. To achieve the full potential of the ERP system and maximize its efficiency, the business processes of the companies involved in the deal should be carefully revisited and only the most effective retained. Considering the large number of processes to go through, even reconfiguration of the business model can easily take months, or even years, not to mention the time investment needed to address the technical, implementation, and integration issues that will inevitably arise once the systemERP for Medium and Large Manufacturers is actively used. To accommodate the merger and acquisition requirements of large businesses, an ERP system should be flexible enough to be fully integrated with other applications, including other ERP systems, and be easy to modify within the current business structure and internal processes according to changing realities. Offshoring and Re-shoring Initiatives Complicated supply chains and trends of manufacturing in off- and re-shoring can lead to challenges as well as opportunities. Though the building of more effective and modern facilities is associated with immediate financial costs, it can also provide new business and 12 opportunities over the long term.
  • Global, multinational, or multi-regional operations that medium and large enterprisesperform bring an extremely high level of complexity to a company’s extensive supplyand distribution chains. The last two decades have witnessed dramatic changes in themanufacturing and global logistics landscape, with a global trend to move manufacturingfacilities to countries with lower labor wages. With the initial goal of reducing productioncosts and succeeding in an environment of tough global competition, businesses have hadto build massive transportation and logistics networks for the sourcing, manufacturing,and distribution of their products. The entire logistics industry has been rebuilt to serve thebooming transportation and delivery requirements of the global players.Global outsourcing has been instrumental in allowing manufacturers to skip the“anxious and unexciting matter” of manufacturing products, with its mandatory tasks ofmanufacturing planning, shop-floor monitoring, and managing shop-floor personnel.Information technologies have played an important role here—certainly the advent ofglobal outsourcing could not have been possible without the explosive developmentand general availability of information technologies in general and ERP, supply chainmanagement (SCM) software, and Internet-based communication tools in particular.However, global outsourcing has brought considerable macro-economic problems to bothdeveloped countries, with unbalanced trade budgets and lost manufacturing facilitiesand skills, and developing countries, with citizens destined to be part of a cheap laborforce. Companies that are actively outsourcing their manufacturing are faced with anunexpected rise in labor costs, a notable reduction to the quality of the outsourced goodsand products, an inability to respond adequately to changing demand and quality issuesbecause of cumbersome and slow supply chains, and difficulties in managing third-countrymanufacturing facilities.Many global and regional companies have already started revisiting their manufacturingand outsourcing strategies. An obvious response to these challenges is to shorten ERP for Medium and Large Manufacturerssupply chains and bring manufacturing facilities close to the customers. By simplifyinginterrelationships, shortening production and delivery time, attracting more educatedand result-oriented human resources (HR) personnel, and dramatically reducing inventory,medium and large manufacturers can create a new paradigm for the modern, agile, andend value–focused manufacturing business.To this end, manufacturers will now need to carry out many specific manufacturingprocesses they were previously outsourcing, and their ERP and shop-floor control systemsmust be powerful and capable of supporting those processes and associated large amountsof manufacturing data. 13
  • Due to the shortening and simplification of the manufacturing supply chains, many existing excessive supply chain elements can be eliminated and relevant parts of the SCM software simplified. In many cases, various SCM systems can be replaced with a single ERP system— one that is powerful yet agile and scalable for processing the required amount of data and the necessary supply chain and distribution events. The ability to immediately react to changes in demand by revisiting a bill of material, adjusting manufacturing processes, delivering finished goods within hours instead of weeks, or even months, will surely serve a business better. Limitations of IT Infrastructure The growth of medium and large manufacturers has occurred in tandem with the maturation of the business software market, with many manufacturers having to improvise their business practices to keep pace with developments in software tools currently in use. In terms of IT infrastructure, medium and large manufacturers face challenges related to the physical infrastructure (hardware, equipment, etc.), the logical infrastructure (software, operating systems, etc.), and the services needed to maintain them. An inefficient physical infrastructure can have a huge impact on the logical infrastructure (a slow internal network can render a very good business software inefficient) and vice versa (a very fast network will not be very useful if the software was not designed and deployed properly). Finally, if organizations use inadequate services companies for the deployment and maintenance of their systems, both the physical and logical infrastructures will be compromised. Manufacturing companies need a physical infrastructure regardless of the type of software, delivery model, technical specifications, etc., they have in place. Medium and large manufacturers are not ready to part with their IT infrastructure due to the substantial financial and time resources they have therein invested. Thus, their strategy typically involves retaining functional components and only gradually replacing obsolete or nonfunctional equipment.ERP for Medium and Large Manufacturers Medium and large manufacturers have a complex logical infrastructure, as these companies frequently use a variety of business software solutions to meet different needs (accounting, customer relationship management [CRM], HR, business intelligence, design and product lifecycle management, etc.), in addition to network protocols, operating systems, databases, and e-mail and Web servers, etc. Manufacturing IT services typically comprise a mix of operations performed by internal staff and external providers. Although all medium and large manufacturing companies have some IT personnel in place, most have opted to outsource some of their maintenance operations. 14
  • Let’s now take a look at how ERP vendors are addressing these challenges.It is not realistic for vendors to assume that their manufacturing customers will replacetheir entire existing infrastructure with the latest tools, due to financial and time resourcerequirements. Therefore, to address issues related to the physical infrastructure, vendorsneed to create reliable and modern products that will work well with both modern and not-so-new hardware and networks. One way to do this is by creating Web-based interfaces,thereby allowing users to use the software in a Web browser, which is compatible withmost computers, old or new. But software vendors do much more than that: when creatingsoftware or building new versions, they take into account the physical infrastructure. Inother words, they look at ways to store data on the server with less storage space and fewermemory requirements, and to send information through the network as fast as possibleand with few or no bottlenecks.The physical and logical infrastructures of an IT system are thus tightly interwoven,because not only do customers need software to run their hardware, but also softwarevendors design their solutions according to the business and infrastructure needs of theircustomers. For flexible systems development and integration, vendors oftentimes useservice-oriented architecture (SOA) to design and build software solutions. SOA aims tomake the infrastructure independent of the programming languages, operating systems,and development methodologies used. The ultimate goal of SOA is to completely separatethe end users from the technology, so that different end users have the same experienceusing the system, regardless of the software and hardware they’re using.Software vendors provide services in the design, planning, and implementation of both thephysical and logical infrastructures. These are extremely important for medium and largemanufacturing companies, as they need to ensure the IT infrastructure is robust enough tosupport high volumes of operations and flexible enough to adapt to new requirements andthe growth of the company. ERP for Medium and Large ManufacturersImportant Factors to Consider When Searching for IT Infrastructure Service ProvidersMedium and large manufacturers exhibit a few characteristics that distinguish them fromother industries:• Rarely can these companies afford to interrupt their day-to-day business processes (especially their production facilities) for any length of time in order to implement or upgrade their infrastructure.• Although most manufacturers have IT personnel in place, these individuals are mainly responsible for managing systems created rather chaotically, rather than for designing and implementing infrastructures. 15
  • • Manufacturing companies have many partners and customers that will be affected by any disruption to their IT activity. • Full compliance with laws, rules, and regulations (financial, privacy-related, employee safety, etc.), and appropriate management through an IT infrastructure is integral to ensuring the company does not incur serious accidents, productivity losses, fines, penalties, etc. Thus, when comparing software vendors for IT infrastructure services, medium and large manufacturers should consider the following: • Their IT personnel should play an active role in any project that involves the IT infrastructure. These individuals need to be involved in every major step of the process, and understand how the changes will affect them and the end users. • These companies are well advised to request references from customers with similar needs who have implemented similar IT projects. This step should provide not only reassurance that the software vendors can deliver on the claims they have made, but also practical guidance with the hands-on experience of others. • These companies must select a vendor that also offers services for business process engineering, as any IT infrastructure change necessitates follow-up and improvement of the system’s operations. • The fewer parties involved, the better. Partnerships between software vendors and hardware providers or consulting companies can make it difficult for medium and large manufacturers to monitor and manage the IT project. Medium and large manufacturers are extremely hesitant to conduct a complete overhaul of their existing IT infrastructure and replace it with a brand new system. Rather, these enterprises are more likely to take baby steps in planning, change management, and business process (re)engineering to successfully adapt an existing IT infrastructure toERP for Medium and Large Manufacturers the current needs of the company and its partners. These companies can take various approaches to alleviate the difficulty of replacing or upgrading their infrastructure: • They can consider different software deployment methods according to their IT infrastructure needs. Known for a quite a long time but revitalized recently, SaaS, or cloud computing, allows for reducing the complexity and cost of the infrastructure in many areas. • Consolidation of services for IT infrastructure is a viable option, particularly for large organizations with scattered multiple plants and centers. • As newer corporate software packages usually use less memory and storage space through better programming and more advanced technology, these manufacturing 16
  • companies should look to the very latest versions of ERP systems on the market or other types of systems (Financial Management, Human Resource Management, Manufacturing Execution Systems, etc.) to meet their infrastructure needs.Advent of Social Media and CollaborationSocial media refers to the Web-based and mobile communication tools and techniquespeople use to create, access, and share content, as well as to collaborate and interact witheach other. Social media sites, such Facebook and Twitter, are recent tools, but collaborationas a business tool has been around since the inception of the first company.Collaboration plays an important role in the manufacturing industry, in accordance withthe complexity of the operations and the large number of internal and external partiesinvolved. Still, medium and large manufacturers rarely have well-defined strategies andpolicies for collaboration, and ERP software vendors do not always have robust offeringsfor both social media and collaboration.Let’s take a closer look at why social media and collaboration are important for mediumand large manufacturers:• Social media is not only a popular and widely used forum, but also a great source of information that can prove to be extremely valuable to manufacturing companies. From end-user communities to unstructured data that can be found on Twitter and Facebook, feedback can be gathered regarding the products and services provided by companies. This feedback can be used for several purposes: improve the quality of the products, design new products, enhance the customer service experience, and stay current of changes in customers’ purchasing behavior.• Collaboration can be the differentiator between a successful company and its lagging competitors. Extensive collaboration can empower a company to produce more innovative products, run the business with better processes, and have employees ERP for Medium and Large Manufacturers work more efficiently. A culture of ideas and information sharing, along with the right tools and processes in place, can enable employees to contribute to the enhancement of their activities, which can have a huge impact on the success of the organization. Collaboration may include partners, and even communities of users and customers (existing or potential).Medium and large manufacturers should take advantage of both collaboration and socialmedia tools to improve the overall business performance of the company. They must firstaddress the following challenges:• A culture of collaboration is not something that companies can build quickly and 17 without huge efforts. It may also require disruptions to the main business activities, and may distress those employees who are less prone to adopt it.
  • • Many manufacturing companies are concerned about what happens to information when it goes outside their firewall. Granted that hackers can very well access on- premise servers connected to the Internet, and employees can still disclose confidential data without prior consent by using traditional means of communication (e-mail, fax, etc.), collaboration and social media tools are still considered not safe enough when it comes to the security of the company’s data. • Medium and large manufacturing companies have complex operations, which require a rather sophisticated IT infrastructure. Incorporating collaboration and social media tools and processes into the existing IT infrastructure can be quite a challenge, and decision makers do not always think it’s worth trying. Let’s take a look at what vendors of ERP software for the manufacturing industry can do to address these challenges. Large vendors, such as Oracle and SAP, have integrated with or simply acquired companies that provide social media and collaboration solutions. Microsoft is a notable exception, as the company builds its own solutions, which are usually a combination of existing products for business and office: Dynamics ERP and Dynamics CRM, SharePoint, Microsoft Office, etc. Medium ERP vendors benefit from technologies developed by the large vendors, such as Microsoft, IBM, etc. Most vendors provide at least some services that can help customers understand why and how to use social media and collaboration tools. When it comes to designing and implementing business processes and infrastructure for social media and collaboration, ERP vendors struggle with defining a consistent way of helping their customers with regards to social media—and third-party consulting companies are often involved. Vendors have very different approaches to social media and collaboration. Collaboration has always existed in one form or another in companies (most often in an informal way),ERP for Medium and Large Manufacturers but social media is rather new and still seen as more suitable for entertainment than for business. Penetration of social media into corporate-wide software may help manufacturers address these aforementioned business challenges. Direct integration of social media and monitoring tools with sales and CRM allows companies to obtain direct customer feedback and opinions, which can lead to more precise and better targeted product development. Integration with CRM or social media monitoring tools enables companies to stay in touch with their customers during the entire product lifecycle process. Companies can also take advantage of their Web sites and make them more interactive through portals. 18
  • ConclusionA future ERP system for medium and large manufacturers should be 3 flexible enough to be fully integrated with other applications and ERP systems; 3 relatively easy and fast to implement, and maintain with less effort and less cost, compared with previous solutions; 3 designed and developed in a way that allows for storing and updating information, and implementing multiple governmental, regional, and international rules and regulations; 3 developed and configured to support the vertical industry in which the company operates; 3 capable of easily accommodating a rapidly changing business structure, internal processes, and outside environment conditions to stay current and accurately reflect the business reality; 3 scalable and powerful to adequately support on-shore manufacturing, shop-floor, and supply chain functionality; 3 flexible to allow for various deployment methods, including SaaS or cloud computing, to substantially reduce the complexity and cost of the infrastructure in many areas; and 3 technically capable of integrating with social media tools (if not already integrated).A modern ERP system that is declared to be suitable for large-scale manufacturingbusinesses should be capable of supporting various challenges, from compliance tosocial media. Because of the rising global-scale competition, manufacturing companiesnowadays cannot afford to use inflexible, heavy systems that are extremely difficult andtime-consuming to implement, configure, and, moreover, modify. There is a real demand fora software system that is capable of supporting diversified and geographically expanded ERP for Medium and Large Manufacturersmanufacturing operations while remaining relatively simple, agile, easy to implement andmodify, with an easy-to-use logic that won’t be an insurmountable handicap for its users inmany countries with various levels of computer knowledge. This is also the surefire strategyfor enterprise-wide system vendors in the planning and development of products for theupcoming years. 19
  • Product Name & Version abas Business Epicor ERP Epicor Exact IFS V7.5 Infor LN Software iScala Macola ES 2011 4.0 Software as a service No Yes No No No No Delivery Model Hosted or on demand Yes Yes Yes Yes Yes Yes On premise Yes Yes Yes Yes Yes Yes Aerospace Yes Yes Yes Yes Yes Yes Basic and fabricated metal Yes Yes Yes Yes Yes Yes products Chemical products Yes Yes Yes Yes Yes Yes Electronics and Yes Yes Yes Yes Yes Yes communication products Food and beverage products Yes Yes Yes Yes Yes Yes Machinery and equipment Yes Yes Yes Yes Yes Yes Manufacturing Sectors manufacturing, including office and computing equipment Motor vehicles and other Yes Yes Yes Yes Yes Yes transport equipment Paper and paper products Yes Yes Yes Yes Yes Yes Pharmaceutical and botanical Yes Yes Yes Yes Yes Yes products Publishing media Yes Yes Yes Yes No Yes Refined petroleum, rubber, Yes Yes Yes Yes Yes Yes and plastics products Textile and apparel Yes Yes Yes Yes No Yes Weapons and ammunition Yes Yes Yes Yes Yes Yes manufacturing Wood and wood products Yes Yes Yes Yes Yes Yes Other manufacturing Yes Yes No Yes Yes Yes Africa No Yes Yes Yes Yes Yes Asia Yes Yes Yes Yes Yes Yes Southeast Asia and East Asia Yes Yes Yes Yes Yes Yes Europe (east and south) Yes Yes Yes Yes Yes Yes Local Support Europe (west and north, Yes Yes Yes Yes Yes Yes including the United Kingdom)ERP for Medium and Large Manufacturers Latin America (Mexico, Central Yes Yes Yes Yes Yes Yes America, and South America) Canada and the United States Yes Yes Yes Yes Yes Yes Middle East Yes Yes Yes Yes Yes Yes Oceania Yes Yes Yes Yes Yes Yes 1–50 Yes Yes Yes Yes Yes Yes Manufacturer’s number 51–100 Yes Yes Yes Yes Yes Yes of employees 101–250 Yes Yes Yes Yes Yes Yes 251–1,000 Yes Yes Yes Yes Yes Yes 1,001–10,000 Yes Yes Yes Yes Yes Yes More than 10,000 No Yes Yes No Yes Yes 20
  • Product Name & Version Infor IQMS Lawson M3 Microsoft Microsoft Microsoft SyteLine EnterpriseIQ Enterprise Dynamics Dynamics Dynamics 7.7 10.1 AX GP NAV Software as a service Yes No No No No NoDelivery Model Hosted or on demand Yes Yes Yes Yes Yes Yes On premise Yes Yes Yes Yes Yes Yes Aerospace Yes Yes Yes Yes Yes No Basic and fabricated metal Yes Yes Yes Yes Yes Yes products Chemical products No Yes Yes Yes Yes Yes Electronics and Yes Yes Yes Yes Yes Yes communication products Food and beverage products No No Yes Yes Yes Yes Machinery and equipment Yes Yes Yes Yes Yes YesManufacturing Sectors manufacturing, including office and computing equipment Motor vehicles and other Yes Yes Yes Yes Yes Yes transport equipment Paper and paper products Yes Yes Yes Yes Yes Yes Pharmaceutical and botanical No No Yes Yes Yes Yes products Publishing media No No No Yes Yes Yes Refined petroleum, rubber, Yes Yes Yes Yes Yes Yes and plastics products Textile and apparel Yes No Yes Yes Yes Yes Weapons and ammunition Yes No Yes Yes Yes No manufacturing Wood and wood products Yes Yes Yes Yes Yes Yes Other manufacturing Yes Yes No No Yes Yes Africa Yes No Yes Yes Yes No Asia Yes Yes Yes Yes Yes Yes Southeast Asia and East Asia Yes Yes Yes Yes No Yes Europe (east and south) Yes Yes Yes Yes Yes YesLocal Support Europe (west and north, Yes Yes Yes Yes Yes Yes including the United Kingdom) ERP for Medium and Large Manufacturers Latin America (Mexico, Central Yes Yes Yes Yes Yes Yes America, and South America) Canada and the United States Yes Yes Yes Yes Yes Yes Middle East Yes No Yes Yes Yes Yes Oceania Yes No Yes Yes No Yes 1–50 Yes Yes Yes Yes Yes YesManufacturer’s number 51–100 Yes Yes Yes Yes Yes Yes of employees 101–250 Yes Yes Yes Yes Yes Yes 251–1,000 Yes Yes Yes Yes Yes Yes 1,001–10,000 Yes Yes Yes Yes Yes No More than 10,000 Yes No Yes Yes No No 21
  • Product Name & Version Oracle Oracle JD Plex QAD Enterprise Ramco E-Business Edwards Online Applications Enterprise Suite EnterpriseOne 2009.1 Series 4.1 Software as a service No No Yes No Yes Delivery Model Hosted or on demand Yes Yes Yes Yes Yes On premise Yes Yes No Yes Yes Aerospace Yes Yes Yes Yes Yes Basic and fabricated metal Yes Yes Yes Yes Yes products Chemical products Yes Yes No Yes Yes Electronics and Yes Yes Yes Yes Yes communication products Food and beverage products Yes Yes Yes Yes Yes Machinery and equipment Yes Yes Yes Yes Yes Manufacturing Sectors manufacturing, including office and computing equipment Motor vehicles and other Yes Yes Yes Yes Yes transport equipment Paper and paper products Yes Yes No Yes Yes Pharmaceutical and botanical Yes Yes No Yes Yes products Publishing media Yes Yes No No Yes Refined petroleum, rubber, Yes Yes No Yes Yes and plastics products Textile and apparel Yes Yes Yes Yes Yes Weapons and ammunition Yes Yes No Yes Yes manufacturing Wood and wood products Yes Yes Yes Yes Yes Other manufacturing Yes Yes No Yes Yes Africa Yes Yes No Yes Yes Asia Yes Yes No Yes Yes Southeast Asia and East Asia Yes Yes No Yes Yes Europe (east and south) Yes Yes No Yes Yes Local Support Europe (west and north, Yes Yes Yes Yes Yes including the United Kingdom)ERP for Medium and Large Manufacturers Latin America (Mexico, Central Yes Yes No Yes Yes America, and South America) Canada and the United States Yes Yes Yes Yes Yes Middle East Yes Yes No Yes Yes Oceania Yes Yes No Yes Yes 1–50 Yes Yes No Yes Yes Manufacturer’s number 51–100 Yes Yes Yes Yes Yes of employees 101–250 Yes Yes Yes Yes Yes 251–1,000 Yes Yes Yes Yes Yes 1,001–10,000 Yes Yes Yes Yes Yes More than 10,000 Yes Yes Yes Yes Yes 22
  • Product Name & Version Sage ERP Sage ERP X3 SAP SAP Business xTuple ERP MAS Business ByDesign 2.6 Manufacturing All-in-One Edition Software as a service No No No Yes YesDelivery Model Hosted or on demand Yes No Yes Yes Yes On premise Yes Yes Yes Yes Yes Aerospace Yes No Yes No Yes Basic and fabricated metal Yes Yes Yes Yes Yes products Chemical products Yes Yes Yes Yes Yes Electronics and Yes Yes Yes Yes Yes communication products Food and beverage products Yes Yes Yes Yes Yes Machinery and equipment Yes Yes Yes Yes YesManufacturing Sectors manufacturing, including office and computing equipment Motor vehicles and other Yes No Yes Yes Yes transport equipment Paper and paper products Yes Yes Yes No Yes Pharmaceutical and botanical Yes Yes Yes No Yes products Publishing media Yes No Yes Yes Yes Refined petroleum, rubber, Yes Yes Yes Yes Yes and plastics products Textile and apparel Yes Yes Yes No Yes Weapons and ammunition Yes No Yes No Yes manufacturing Wood and wood products Yes No Yes No Yes Other manufacturing Yes Yes Yes Yes Yes Africa Yes Yes Yes Yes Yes Asia Yes Yes Yes Yes Yes Southeast Asia and East Asia Yes Yes Yes Yes Yes Europe (east and south) Yes Yes Yes Yes YesLocal Support Europe (west and north, Yes Yes Yes Yes Yes including the United Kingdom) ERP for Medium and Large Manufacturers Latin America (Mexico, Central Yes No Yes Yes Yes America, and South America) Canada and the United States Yes Yes Yes Yes Yes Middle East Yes Yes Yes Yes Yes Oceania Yes Yes Yes No Yes 1–50 Yes No No Yes YesManufacturer’s number 51–100 Yes Yes Yes Yes Yes of employees 101–250 Yes Yes Yes Yes Yes 251–1,000 Yes Yes Yes Yes Yes 1,001–10,000 No Yes Yes No Yes More than 10,000 No No No No Yes 23
  • Product Name & Version abas Business Epicor ERP Epicor Exact IFS V7.5 Infor LN Software iScala Macola ES 2011 4.0 Business process Yes Yes No Yes Yes Yes management (BPM) Call center Yes No Yes Yes Yes Yes Change management No Yes Yes Yes Yes Yes Communication and Yes Yes Yes Yes Yes Yes collaboration Content management Yes Yes Yes Yes Yes Yes Contract management Yes Yes Yes Yes Yes Yes Relevant Functionality E-commerce Yes Yes Yes Yes Yes Yes Electronic records No Yes Yes Yes Yes No management E-mail manager No Yes Yes Yes Yes Yes Fleet management No No No Yes Yes Yes Learning management No Yes Yes Yes Yes No Mobile computing Yes Yes Yes Yes Yes Yes Portal support Yes Yes Yes Yes Yes Yes Portfolio management No Yes Yes Yes Yes No POS/counter sales No Yes No Yes No Yes Project management Yes Yes Yes Yes Yes Yes Versioning control and Yes Yes Yes Yes Yes Yes management Workflow manager Yes Yes No Yes Yes Yes Documenting business Yes Yes Yes Yes Yes Yes processes (i.e., BPM) Defining system requirements Yes Yes Yes Yes Yes Yes System evaluation and Yes Yes Yes Yes No Yes comparison Tender preparation and Yes Yes Yes Yes No Yes Professional Assistance vendor selection Implementation Yes Yes Yes Yes Yes Yes Change management Yes Yes Yes Yes Yes Yes Project management Yes Yes Yes Yes Yes Yes Training Yes Yes Yes Yes Yes YesERP for Medium and Large Manufacturers Integration issues Yes Yes Yes Yes Yes Yes Customization Yes Yes Yes Yes Yes Yes Testing and rollout of an Yes Yes Yes Yes Yes Yes application Hardware and infrastructure Yes Yes Yes Yes Yes Yes Certain industry trends Yes Yes Yes Yes Yes Yes Market intelligence No Yes Yes Yes Yes No 24
  • Product Name & Version Infor IQMS Lawson M3 Microsoft Microsoft Microsoft SyteLine EnterpriseIQ Enterprise Dynamics Dynamics Dynamics 7.7 10.1 AX GP NAV Business process Yes Yes Yes No Yes Yes management (BPM) Call center Yes No Yes No Yes Yes Change management No No Yes No Yes Yes Communication and Yes No Yes Yes Yes Yes collaboration Content management Yes No Yes No No Yes Contract management Yes No Yes Yes Yes YesRelevant Functionality E-commerce Yes Yes Yes No Yes Yes Electronic records Yes Yes Yes No Yes Yes management E-mail manager Yes No Yes Yes No No Fleet management No No Yes No Yes No Learning management Yes No Yes No No Yes Mobile computing Yes Yes Yes No Yes Yes Portal support Yes Yes Yes Yes Yes Yes Portfolio management No No Yes No Yes No POS/counter sales Yes Yes Yes Yes Yes Yes Project management Yes Yes Yes Yes Yes Yes Versioning control and No Yes Yes No Yes Yes management Workflow manager Yes Yes Yes Yes Yes Yes Documenting business Yes Yes Yes Yes Yes Yes processes (i.e., BPM) Defining system requirements Yes Yes Yes Yes Yes Yes System evaluation and Yes No No Yes Yes Yes comparison Tender preparation and Yes No No Yes Yes YesProfessional Assistance vendor selection Implementation Yes Yes Yes Yes Yes Yes Change management Yes Yes Yes Yes Yes Yes Project management Yes Yes Yes Yes Yes Yes Training Yes Yes Yes Yes Yes Yes ERP for Medium and Large Manufacturers Integration issues Yes Yes Yes Yes Yes Yes Customization Yes Yes Yes Yes Yes Yes Testing and rollout of an Yes Yes Yes Yes Yes Yes application Hardware and infrastructure Yes Yes Yes Yes Yes Yes Certain industry trends Yes No Yes Yes Yes Yes Market intelligence No No Yes Yes Yes Yes 25
  • Product Name & Version Oracle Oracle JD Plex QAD Enterprise Ramco E-Business Edwards Online Applications Enterprise Suite EnterpriseOne 2009.1 Series 4.1 Business process Yes Yes No Yes Yes management (BPM) Call center Yes Yes No Yes No Change management Yes Yes Yes Yes Yes Communication and Yes Yes Yes Yes Yes collaboration Content management Yes Yes Yes Yes No Contract management Yes Yes No Yes Yes Relevant Functionality E-commerce Yes Yes No Yes Yes Electronic records Yes Yes No Yes Yes management E-mail manager Yes Yes Yes Yes No Fleet management Yes Yes No No Yes Learning management Yes No Yes No Yes Mobile computing Yes Yes Yes Yes Yes Portal support Yes Yes Yes Yes Yes Portfolio management Yes No No No Yes POS/counter sales Yes Yes No No Yes Project management Yes Yes Yes Yes Yes Versioning control and Yes Yes Yes No Yes management Workflow manager Yes Yes Yes Yes Yes Documenting business Yes Yes Yes Yes Yes processes (i.e., BPM) Defining system requirements Yes Yes Yes Yes Yes System evaluation and Yes Yes Yes Yes No comparison Tender preparation and Yes Yes Yes No Yes Professional Assistance vendor selection Implementation Yes Yes Yes Yes Yes Change management Yes Yes Yes No Yes Project management Yes Yes Yes Yes Yes Training Yes Yes Yes Yes YesERP for Medium and Large Manufacturers Integration issues Yes Yes Yes Yes Yes Customization Yes Yes Yes Yes Yes Testing and rollout of an Yes Yes Yes Yes Yes application Hardware and infrastructure Yes Yes Yes Yes No Certain industry trends Yes Yes Yes Yes No Market intelligence Yes No Yes Yes No 26
  • Product Name & Version Sage ERP Sage ERP X3 SAP SAP Business xTuple ERP MAS Business ByDesign 2.6 Manufacturing All-in-One Edition Business process Yes Yes Yes Yes Yes management (BPM) Call center No No No Yes Yes Change management Yes Yes Yes Yes Yes Communication and Yes Yes Yes Yes Yes collaboration Content management Yes No Yes Yes Yes Contract management Yes Yes Yes Yes YesRelevant Functionality E-commerce Yes Yes Yes Yes Yes Electronic records Yes Yes Yes No Yes management E-mail manager No Yes Yes Yes Yes Fleet management No No Yes No Yes Learning management No Yes No Yes No Mobile computing Yes Yes Yes Yes Yes Portal support Yes Yes Yes Yes Yes Portfolio management No Yes Yes Yes Yes POS/counter sales Yes Yes Yes No Yes Project management Yes Yes Yes Yes Yes Versioning control and Yes No Yes Yes Yes management Workflow manager Yes Yes Yes Yes Yes Documenting business Yes Yes Yes Yes Yes processes (i.e., BPM) Defining system requirements Yes Yes Yes Yes Yes System evaluation and Yes Yes Yes Yes Yes comparison Tender preparation and No Yes No Yes YesProfessional Assistance vendor selection Implementation Yes Yes Yes Yes Yes Change management Yes Yes Yes Yes Yes Project management Yes Yes Yes Yes Yes Training Yes Yes Yes Yes Yes ERP for Medium and Large Manufacturers Integration issues Yes Yes Yes Yes Yes Customization Yes Yes Yes Yes Yes Testing and rollout of an Yes Yes Yes Yes Yes application Hardware and infrastructure No Yes Yes Yes Yes Certain industry trends Yes Yes Yes Yes Yes Market intelligence Yes Yes No Yes Yes 27
  • abas Business Software 2011 Since its inception in 1980, ABAS aspires to be a leader in business and technology solutions that provide true value to midsize manufacturing, distribution, and service enterprises. We encourage and empower our employees to use their knowledge and creativity to produce smart solutions that help our customers attain success in an ever-changing world. Epicor ERP, Epicor iScala Founded in 1984,  Epicor  serves over 20,000 customers in more than 150 countries.  Epicor provides solutions in over 30 languages employing service-oriented architecture (SOA) and Web services technology. Epicor delivers end-to-end, industry-specific solutions. Epicor offers a range of services with its solutions to provide a single point of accountability. Exact Macola ES 4.0 Established in 1984 and headquartered in Delft (The Netherlands),  Exact  Software provides solutions comprising traditional enterprise resource planning (ERP), as well as related software solutions such as human resource management (HRM), customer relationship management (CRM), project management, business intelligence and business analytics (BI/BA), and electronic workflow. IFS V7.5 IFS delivers IFS Applications™, an enterprise suite designed to make enterprises more agile by streamlining four core strategic processes: service & asset management, manufacturing, supply chain, and projects. IFS Applications is a component-based extended ERP suite built on SOA technology and optimized for manufacturing, project-based, and asset-intensive industries. Infor LN Infor  ERP  LN  has a single code base for all platforms and supports integration with external systems, including the supply chain and the Web, using industry-standard technology. The solution supports processes from make-to-stock (MTS) to engineer-to-order (ETO), and cost-ERP for Medium and Large Manufacturers cutting techniques like flow line and lean manufacturing. Infor SyteLine Infor ERP SyteLine is a complete ERP solution for midsized manufacturers of discrete products. Infor ERP SyteLine supports single- or multisite business entities, and provides the flexibility to add or change business structures. It offers support for multicurrency, flexible manufacturing methods, multiple cost types, and an advanced planning and scheduling engine. 28
  • IQMS EnterpriseIQ 7.7With corporate headquarters in North America and offices located around the world,IQMS designs and develops ERP software. Designed specifically for the manufacturing industry,the company’s flagship product,  EnterpriseIQ, incorporates complete real-time supply chainmanagement (SCM) into a single database. EnterpriseIQ is designed to help every departmentcommunicate and operate more efficiently.Lawson M3 Enterprise 10.1Lawson Software provides software and service solutions to 4,000 customers in manufacturing,distribution, maintenance, and service sector industries across 40 countries. Lawson’s solutionsinclude enterprise performance management, SCM, ERP, CRM, enterprise asset management(EAM), and human capital management (HCM).Microsoft Dynamics AX, Microsoft Dynamics GP,Microsoft Dynamics NAVMicrosoft Dynamics is a line of business management solutions that enable companies and theirpeople to make business decisions. Microsoft Dynamics offers a range of business applicationsdesigned to help midsized businesses become more connected with customers, employees,partners, and suppliers by automating and streamlining financial, customer relationship, andsupply chain processes.Oracle E-Business Suite, Oracle JD Edwards EnterpriseOneFounded in 1977,  Oracle  Corporation (NASDAQ: ORCL) supplies software for informationmanagement. With annual revenues of more than $10.9 billion (USD), the company offers itsdatabase, tools, and application products, along with related consulting, education, and supportservices, in more than 145 countries around the world.Plex OnlinePlex Systems, Inc. develops Plex Online software-as-a-service (SaaS) or Cloud ERP solution for ERP for Medium and Large Manufacturersmanufacturing enterprises. Plex Online cuts cost and complexity associated with legacy ERPsystems. Automotive, metal forming, food processing, aerospace, and other manufacturersachieve sustained advantage via shop floor to top floor ERP, MES, Quality, Supply Chain, andmore.QAD Enterprise Applications 2009.1Founded in 1979, QAD Inc. is a provider of ERP software applications for global manufacturingcompanies. Manufacturers in the automotive, consumer products, electronics, food andbeverage, medical, and industrial products industries use QAD solutions at approximately 6,000licensed sites in more than 90 countries around the world, in 27 languages. 29
  • Ramco Enterprise Series 4.1 Ramco  Systems  Corporation provides enterprise solutions and offshore applications development services, with over 1,000 customer installations to date. Ramco offers a portfolio of software products and services, including enterprise applications for e-commerce, business analytics, and strategic consulting services, industry segments such as manufacturing, third- party logistics (3PL), logistics, aviation, and high-tech. Sage ERP MAS, Sage ERP X3 The  Sage  Group plc, a global supplier of business management software and services to 6.3 million customers worldwide. From small start-ups to larger organizations,  Sage  software solutions are designed to help companies manage their business processes. The  Sage  Group plc, formed in 1981, now employs more than 4,000 people in North America and more than 13,000 people worldwide. SAP Business All-in-One, SAP Business ByDesign 2.6 Founded in 1972, SAP is one of the leading international providers of business software and, based on market capitalization, is the world’s third-largest independent software manufacturer. SAP has more than 109,000 customers in over 120 countries and employs 53,000 people at locations in more than 50 countries. xTuple ERP Manufacturing Edition xTuple provides free, and commercially licensed, open source ERP software. Its customers range from small businesses to large enterprises in a variety of industries, including food production, manufacturing of pistons, industrial pumps, and specialty garments, and others.  xTuple  is headquartered in Norfolk, Virginia (USA).ERP for Medium and Large Manufacturers 30
  • Casebook
  • Case Study Epicor Customer Success Story Energizer Holdings, Inc. The Situation Energizer Holdings, Inc.—the well-known maker of batteries, flashlights, and other consumer goods under brands including Energizer, Eveready, and Playtex—provides an excellent example of a company successfully implementing a two-tier enterprise resource “ We learned the hard way that you planning (ERP) strategy to meet its need for a simple, low-cost ERP solution for its global can’t serve this divisions. Headquartered in St. Louis, Missouri, Energizer operates 23 manufacturing and diverse business packaging facilities through subsidiaries in 14 countries on five continents. with a ‘one size fits “ “Our products are sold in more than 160 countries,” says Randy Benz, chief information all’ ERP strategy. officer at Energizer. “We have high-volume markets in Western Europe and North America that are dominated by sophisticated modern retailers that buy truckloads of products at a time. We also have markets in emerging economies, where we deliver a few consumer units at a time on a route system to very small kiosk retailers.” Thus, Energizer revenues at the individual country level vary from single-digit millions to more than a billion. Planning for such a variable environment requires a sophisticated approach to ERP. Benz says, “We learned the hard way that you can’t serve this diverse business with a ‘one size fits all’ ERP strategy.”ERP for Medium and Large Manufacturers Energizer subsidiaries and divisions around the world were using differing local ERP systems. This led to difficulty in aggregating critical business information across markets, and to redundant, nonproductive support costs. To address these issues, beginning in the late 1990s, Energizer sought to implement a two-tiered ERP strategy, running SAP at its headquarters but also using a standardized Tier 2 solution at the various smaller global locations. Energizer had three primary goals in this effort: the solution supports localization, the solution is easy to install and configure, and the solution is user-friendly. 32
  • The SolutionEnergizer chose a solution from Epicor, a Microsoft® Gold Certified Partner. The solutioncame ready to handle country-specific languages, regulations, and controls. It is tightlyintegrated with Microsoft products, which means that Energizer employees can access its “ With the solution’s new features, weinformation in the Microsoft tools they use every day. Energizer also gained a productive can deploy morepartnership with the Epicor product development group and has used the Epicor solution’s sophisticatedenhancements to improve its decision making. practices in manyEpicor functioned well in its first Energizer installments in Eastern Europe. Energizer then of our stand-used the Epicor solution as an integral part of its ERP strategy, gradually replacing outdated alone markets …systems worldwide. Today, Epicor supports Energizer operations in 28 countries throughout Quite simply, theAsia, Eastern Europe, and Latin America. What started as an affordability strategy soon Epicor solutionbecame a growth strategy for Energizer. has proven to be a great path toThe Benefits “ value.By selecting Epicor, Energizer gained a low-cost localized ERP solution that is easy touse. Microsoft integration expands the audience for ERP data. In a productive ongoingrelationship with Epicor, Energizer has been able to use the ERP solution to make betterbusiness decisions.Less Than Half the Deployment Cost of a Typical ERP SystemThe initial benefit that Energizer realized was a low cost of deployment for the Epicor ERPsolution. “We found that the all-in cost of deploying the Epicor solution was somewherein the range of one-third to one-half the cost of a typical, ‘big iron’ ERP,” says Benz. Notingthat many of these early deployments came in the 1990s, he adds, “That saved us millions ERP for Medium and Large Manufacturersduring the Y2K period alone.”In the years since then, as Energizer has expanded its use of the Epicor solution, the solutionhas also added features. Benz says, “With the solution’s new features, we can deploy moresophisticated practices in many of our stand-alone markets. So I think it is arguable thatthat ratio has remained intact. Quite simply, the Epicor solution has proven to be a greatpath to value.” 33
  • Localization Out of the Box Epicor is localized for use around the globe with little input required. Out of the box, the solution works in more than 30 languages and is set up with country-specific regulations and controls. It handles local legal, fiscal, and statutory requirements with no extra “ It’s logically organized and has configuration required. “Our biggest concern was getting a product that could adjust to a simple, intuitive our many diverse markets,” Benz says. “The Epicor solution has exceeded our expectations interface that in that regard.” closely parallels the structure of Expanded Audience for Information “We chose the Epicor solution because of its localization, ease of deployment, and ease many Microsoft of use,” says Benz, who notes that his colleagues have adapted quickly to the solution. tools that people “It’s logically organized and has a simple, intuitive interface that closely parallels the use every day in “ structure of many Microsoft tools that people use every day in their jobs.” Employees find their jobs. the solution easy to use, and the IT department finds it easy to support. Productive Ongoing Relationship “Over time,” says Benz, “in many of the markets that we serve, our business has grown and our business practices have become far more sophisticated using the Epicor solution.” Thus, the company’s ERP needs have evolved. Benz says, “We’ve worked closely with the Epicor product team to help them understand our needs and to help them evolve their solution to give it enhanced features that Epicor can then market to a range of customers.” Better Decisions At Energizer, initial attention to the Epicor ERP solution was focused on transactional processes. However, once the company reached a level of standardization in the transactional area, Benz says, “We turned our attention to making better decisions based on the information stored in the system.”ERP for Medium and Large Manufacturers For example, Energizer used the business intelligence functions of the Epicor solution, SQL Server, PerformancePoint Services, Excel, and SharePoint Server to study customer and product profitability to better shape go-to-market tactics. Energizer is also deploying supply chain practices to better plan and coordinate production and distribution in individual markets. “Over time, the core capabilities of the Epicor solution have grown right along with our needs,” says Benz. “It’s a journey, to be sure, but we’re well on our way to better decisions and fact-based execution.” 34
  • Thought LeadershipWhat ERP Strategy Is Right for You? You may have been operating across multiple sites and geographies for some time, or you may just be starting to expand. As organizations like yours consider their enterprise resource planning (ERP) strategy, one daunting challenge comes up again and again: “ How can our business integrate How can our business integrate its operations and increase visibility between headquarters its operations and our divisions to effectively support strategic decision making, enhance efficiency, and and increase adapt to new markets? visibility between headquarters and It’s no easy task. To achieve this monumental goal, you need to select the right ERP strategy for your company. While some organizations have opted to install a single instance of our divisions to ERP globally to meet this need, the single-solution approach is not for everyone—nor effectively support is it without its challenges. To meet these challenges, more and more organizations are strategic decision considering a two-tier ERP strategy. making, enhance A two-tier ERP strategy is the combination of Tier 1 and Tier 2 ERP systems, often from efficiency, and the same vendor, into a single integrated environment. This often means retaining adapt to new “ Tier 1 solutions in locations where they are already deployed or where the complexities markets? of the business are sufficient to justify the increased implementation, configuration, and maintenance costs while using a Tier 2 solution in the locations that need a powerful ERP system deployed rapidly, yet either cannot justify the cost or lack the local support resources to maintain a full Tier 1 environment or wait for its implementation. ERP for Medium and Large Manufacturers As the consolidated parent system, the Tier 1 ERP can handle high data volumes and has the features necessary to manage transactions and reporting for the large number of employees and users that typically work in headquarters. In addition, the Tier 1 ERP allows organizations to centralize functions that require consistency across the entire company, including procurement, operations, architecture, standards, processes, and ERP application development. These functions can then be supplemented by a single approved application that is implemented in business units where it is cost prohibitive to deploy the larger package. For such distributed units, a solid Tier 2 player is a sound alternative. Today, Tier 2 solutions offer all the capabilities that an organization would expect from a Tier 1 system, but without the associated cost of ownership. These include end-to-end 35
  • ERP processes, embedded workflows, and strong governance, risk, and compliance (GRC) controls, as well as robust reporting and performance management capabilities. In addition, Tier 2 solutions continue to provide their long-held advantages of a lower “ By consolidating the number of total cost of ownership (TCO), greater flexibility, and the ability to be implemented more ERP systems a rapidly than their Tier 1 counterparts. Modern Tier 2 packages designed with multi-site company uses, business deployment scenarios in mind also offer ease of use, strong global functionality, rationalizing the and a rich, repeatable footprint based on established business processes and master data management (MDM) stewardship. way they manage those systems, and By consolidating the number of ERP systems a company uses, rationalizing the way they standardizing on manage those systems, and standardizing on as few systems as possible, a two-tier ERP as few systems as strategy helps organizations become more nimble, and, in turn, more profitable. There are many factors that contribute to a successful two-tier ERP strategy. Many have found that possible, a two- software-as-a-service (SaaS) and cloud deployment options are a strategic component to a tier ERP strategy two-tier ERP strategy. Benefits come from a low TCO, scalability, and faster implementation. helps organizations According to Constellation Research, “Subscription pricing, continuous innovation, and become more rapid ROI continue to drive organizations to consider SaaS and cloud alternatives in two- tier ERP strategies. SaaS and cloud products are best placed to deliver the quickest time nimble, and, in turn, “ to value in a two-tier ERP strategy. When combined with an overall legacy optimization more profitable. strategy, many clients often apply SaaS and cloud to both a renewal program and two-tier approach.”1 When a Two-tier Strategy Makes Sense Organizations operating multiple sites face a number of complexities that single site organizations do not. These additional complexities often compel an organization to consider multiple ERP solutions.ERP for Medium and Large Manufacturers 3 Geography: Your company is operating in a region that requires specific localizations or translations. 3 Differing Business Model: You have divisions or sites that operate under a different business model. 3 Cost and Resource Constraints: While your company may have significant resources available at headquarters, or in larger divisions to implement and maintain your ERP solution, that same level of resources is often not available for the individual sites. 36 1Constellation Research, “The Case for Two-Tier ERP Deployments,” by R “Ray” Wang, February 28, 2011.
  • Beyond these issues, many organizations also consider a two-tier strategy as a way tomodernize their systems. They may have a legacy system at the headquarters, but opt for amore modern ERP solution to be implemented at the division or site level. For all of thesereasons and more, there is an increasing trend towards two-tier strategy. ConstellationResearch confirms an increasing popularity in two-tier ERP deployments. In a recentConstellation Research survey, 48% of respondents indicated that they are consideringa two-tier ERP strategy, a 27-point increase from 2009, and when asked why, mostrespondents saw the strategy as reducing costs and driving business flexibility.1 Accordingto Constellation Research, “ROI calculations on existing ERP systems often show high costfactors. The culprits—overruns in implementation, customization of reports, maintenancepayments on shelfware, increasing costs to staff, and rigidity of system.”1Using the Tier 2 package, organizations can achieve significant savings in the initial purchaseprice, during the rollout process to multiple subsidiaries (due to the ability to use thesame skill sets, processes, methodologies, and deployment strategies), as well as in lowermaintenance and support costs. By reducing the number of ERP packages, organizationscan enable more consistent business processes across the entire organization. Tier 2solutions are also easier for the local business units and offices to maintain.Global organizations now have a choice: 1. They can continue to roll out long “wall-to-wall” Tier 1 deployments; 2. They can implement a Tier 2 solution as their corporate standard everywhere; or 3. They can blend the solutions into a two-tier strategy, with the Tier 1 solution at the largest or most complex locations, and the Tier 2 solution everywhere else.Each approach will have different benefits and costs depending on where an organizationis in its existing ERP adoption and update/rollout plans. The case for a two-tier ERPdeployment includes the need to better meet functional requirements in various parts of ERP for Medium and Large Manufacturersthe company, improved data quality and reporting, as well as more rapid rollout to thewhole company. With a two-tier ERP strategy in place, organizations can retain the benefitsof consolidated information, providing greater visibility, as well as drill down to individualtransactions, linking together sites, divisions, and subsidiaries around the world in a trulyvirtual enterprise. 37
  • Case Study Sage Customer Success Story Sage ERP Accpac Customer Challenge Lightspeed Aviation As it grew, the company’s basic contact management Industry system and entry-level accounting software threatened Distribution to disrupt the exceptional service on which Lightspeed Aviation has built its reputation. Location Lake Oswego, Oregon, USA Solution Number of Locations Sage ERP Accpac and SageCRM provide an integrated 1 plus international repair facility business management solution that is powerful and flexible enough to meet the company’s needs today and System into the future. SageCRM Sage ERP Accpac • System Manager Results • Inventory Control • Purchase Orders Product quality has increased through the ability to analyze service calls. Integration with Web and shippingERP for Medium and Large Manufacturers • Order Entry • Accounts Receivable components increases efficiency. Broad customization • Accounts Payable capabilities allow the company to configure the software • General Ledger to match its workflow. • Serialized Inventory • Uni Sales Analysis Iciniti Store and Credit Card Crystal Reports® Linxship 38
  • Lightspeed Aviation Flies High withSage ERP Accpac and SageCRMLightspeed Aviation has carved out a niche market for its products that not only remainedstrong during the recent recession, but also has seen spectacular growth. The companyassembles, distributes, and services aviation headsets for recreational pilots. With a stellarreputation for service and support, the company demands a powerful and flexible businessmanagement solution that allows it to adapt to evolving requirements. For LightspeedAviation, that solution is Sage ERP Accpac with SageCRM.Growth Dictates ChangeWhen the company began operations, it used QuickBooks and a rudimentary contactmanagement system to track its customers and product repairs. As its successful businessmodel propelled its growth, the old software quickly became overwhelmed. “We built thisbusiness on service. Back then, we were only one-quarter of the size we are now, yet theold system’s limitations threatened our ability to deliver that service,” recalls Jim Mueller,vice president and COO of Lightspeed Aviation.Mueller and the management team began looking first for a CRM solution to supportLightspeed Aviation’s customer-facing operations. “I researched several systems andzeroed in on SageCRM.com,” he says. “The hosted software model appealed to us becausewe had no dedicated IT staff. SageCRM.com had the functionality we needed and we likedthe easy upgrade path to the in-house SageCRM integrated with Sage ERP Accpac as ourbusiness grew.”Lightspeed Aviation successfully used SageCRM.com for two years before its growthagain dictated a change. “We wanted to take advantage of the customization capabilities ERP for Medium and Large Manufacturersavailable with SageCRM, plus it was time to upgrade our accounting system,” notes Mueller.The company called a local Sage Authorized Partner for help, and Mueller was very pleasedwith the results. “They came in, learned our business, and tailored SageCRM and Sage ERPAccpac to match our company’s workflow,” he explains. “It was a very easy transition.”Keep Customers HappyLightspeed Aviation sells a majority of its products through a distribution channel, and theultimate user of its headsets is not known until the pilot registers the product. The SageAuthorized Partner tailored SageCRM to create and maintain the association between an 39
  • item’s serial number, the distributor, and the customer. Now, when a registration is received from the company’s Web site, SageCRM is equipped to complete the circle by associating the serial number with the customer as well as with the distributor. By maintaining this “ With Sage ERP Accpac and SageCRM, association, Lightspeed Aviation keeps the entire history of each product’s lifecycle— we empower our this equips its staff to quickly answer questions, address warranty issues, and deliver employees with the exceptional service. tools they need to provide a high level of “There are a relatively small number of recreational pilots out there so customer retention is key,” Mueller explains. “With Sage ERP Accpac and SageCRM, we empower our employees service and keep our “ with the tools they need to provide a high level of service and keep our customers happy.” customers happy. Jim Mueller Service Levels Soar Vice President and COO Lightspeed Aviation The customer service component in SageCRM allows staff to create and track support issues and repairs for its headsets. “The integration with Sage ERP Accpac allows our repair associates to pull up the part numbers used for the repair from the ERP system and accumulate the total cost of each repair,” explains Mueller. A significant benefit of tracking its service calls in SageCRM is the visibility it provides into product quality. Mueller explains, “By tracking a product through its lifecycle, we know its ship date and its repair date. This allows us to easily perform time-to-failure analyses on our products. We can quickly identify quality issues or manufacturing problems by tracking the exact nature of each repair; this has increased our overall product quality.”ERP for Medium and Large Manufacturers Single Source for Data Lightspeed Aviation adopted Sage ERP Accpac with the same enthusiasm as its SageCRM component and takes full advantage of the product’s functionality. “We have integrated it with our shipping software and our Web store,” Mueller explains. “We utilize Bill Of Materials to track the components of our headsets and Engineering Change Orders to monitor the changes to our production.” The advantages of an integrated business management 40 solution are many. “The flow of information between the ERP and CRM components means we have one
  • database for all customer and product information,” Mueller says. “This allows us to deliverprofessional and polished, yet personable service to our customers—we have not only thehistory of what they bought from us, but also additional details such as the type of planethey fly.”Works the Way We DoThe company is in the process of growing its global business and opening internationalrepair facilities. Those facilities will be able to access the system securely throughLightspeed Aviation’s Web portal, and log support calls, as well as tap into the knowledgebase of resolutions. This is another example of the way the software adapts to meet thechanging needs of this organization.“I believe that the software’s job is to support our operations, not require that we changeto fit the way it operates,” Mueller concludes. “Sage ERP Accpac and SageCRM are flexibleenough to work the way we work and help us to be better at what we do. We have aplatform that will support our growth and adapt to our changing business for yearsto come.”About Sage North AmericaSage North America is part of The Sage Group plc, a leading global supplier of business managementsoftware and services. At Sage, we live and breathe business every day. We are passionate about helpingour customers achieve their ambitions. Our range of business software and services is continuallyevolving as we innovate to answer our customers’ needs. Our solutions support accounting, operations,customer relationship management, human resources, time tracking, merchant services, and thespecialized needs of the construction, distribution, healthcare, manufacturing, nonprofit, and realestate industries. Sage North America employs 4,000 people and supports nearly 3.2 million small and ERP for Medium and Large Manufacturersmedium-size business customers. The Sage Group plc, formed in 1981, was floated on the London StockExchange in 1989 and now employs 13,400 people and supports 6.3 million customers worldwide. Formore information, please visit the Web site at: www.SageNorthAmerica.com or call 1-866-996-7243.Sage6561 Irvine Center DriveIrvine, CA 92618Telephone: 866-530-7243www.sageaccpac.com©2010 Sage Software, Inc. All rights reserved. Sage, the Sage logos, andthe Sage product and service names mentioned herein are registeredtrademarks or trademarks of Sage Software, Inc., or its affiliated entities. All 41other trademarks are the property of their respective owners.
  • Case Study Sage Customer Success Story Sage ERP MAS Customer Challenge Navtrak, Inc. QuickBooks “wasn’t working”—it did not provide an Industry adequate audit trail, inventory tracking, or management GPS Manufacturer control. Location Solution Salisbury, Maryland, USA Sage ERP MAS 500 with a complete suite of financial and Number of Locations manufacturing modules, fully integrated with internal Image Five database and CRM. Number of Employees 65 Results System Data entry time cut by 50 percent; time to create reports Sage ERP MAS 500 reduced by 33 percent; business doubled without increasing inventory levels or staffing. Modules in OperationERP for Medium and Large Manufacturers • General Ledger • Accounts Receivable • Accounts Payable • Sales Order • Inventory Management • Purchase Orders • Cash Management • Light Manufacturing 42
  • Navtrak Charts aBetter Course withSage ERP MAS 500“QuickBooks was not a true accounting system,”says Sheryl Auld, controller of Navtrak, Inc.“Finally we have the real thing with Sage ERPMAS 500, and we’re extremely happy with it.”Navtrak manufactures global positioning system(GPS) equipment for businesses so it can trackvehicles in an accurate and timely manner.Unfortunately, its QuickBooks financial softwarewas neither accurate nor timely. “It just wasn’tworking at all,” explains Auld. “It didn’t providean adequate audit trail, the ability to performanalysis, or do deep inventory tracking. And it letpeople delete transactions when they shouldn’t,leaving us with little management control.” “ Sage ERP blew Great Plains out of the water . . . Once I saw Sage ERP, I told the Great Plains representative thatNavigating the Software “ they didn’t need to come back.WatersAuld checked out leading business systems before making a purchase decision. “Sage ERPblew Great Plains out of the water,” she says. “Sage ERP was superior at integrating with ouradministrative database and CRM and was very easy to use. Also, the reseller was terrific,going above and beyond what you’d expect from any business partner. I’d worked with ERP for Medium and Large ManufacturersGreat Plains at a previous job and knew it very well. But once I saw Sage ERP, I told the GreatPlains representative that they didn’t need to come back.”Sage MAS ERP now does “almost everything from a financial standpoint,” according toAuld. This includes all general accounting functions plus inventory and manufacturingmanagement for Navtrak. 43
  • Big Leap Forward “We made a huge leap from QuickBooks to Sage ERP because we didn’t want to switch to a different product in a couple of years,” says Auld. “In the process, we had to restructure how we did things throughout the business. For instance, now all transactions must be posted by individuals with proper security rights. The added effort has definitely been worth it. Now we’re in compliance with general accounting practices and can easily provide data for our auditors.” Navtrak receives inventory that is 90 percent complete. The company adds sophisticated communication modems, programs them, tests for quality control, and ships them to customers—primarily fleets in the trucking, ambulance, waste disposal, and utility industries. Orders are received through a CRM system, which integrates seamlessly with Sage ERP. Products are scanned into the Sage ERP inventory system upon arrival. The system pulls parts according to customer order, stages, and processes production, and even manages orders through shipping. Good-bye to Manual Tracking “Sage ERP eliminated the manual transaction tracking we used to do,” Auld notes. “We now have historic data for all purchases, as well as real-time inventory. We can drill down and see exactly what we purchased with each vendor, or what each customer has ordered from us. This is invaluable information for running our business smarter.” The new system has resulted in efficiencies across the board. “Because Sage ERP integrates with our CRM software, we only have to enter data once,” says Auld. “This has cut data entry time by at least 50 percent, or the equivalent of several full-time employees, who can be used in other areas of the company.”ERP for Medium and Large Manufacturers Real-time Data Cash management is better as well. “Before we kept manual records on receipts and disbursements, which had to be entered into spreadsheets. Now we just post transactions into Sage ERP and run a report every day, giving us instant access to up-to-date cash balances. Analysis of all types of data is easier, in fact, because we can run reports directly out of Sage ERP, reducing reporting time overall by about 33 percent,” says Auld. 44
  • Inventory has been streamlined too. “Sage ERP provides us with much better exposure onour inventory, so we understand exactly what we have on hand at any given time andcan plan and purchase inventory more wisely. We’ve doubled in size in the past year inboth customer volume and total number of vehicles tracked by our database. Yet we’remanaging with close-to-old inventory levels and were able to put off hiring new staff—a tribute to the efficiencies provided by the new software,” says Auld.Auld says she never hesitates to recommend Sage ERP. “It’s a great product,” she explains,“and there’s no way our phenomenal growth would have been possible without it.”About Sage North AmericaSage North America is part of The Sage Group plc, a leading global supplier of business managementsoftware and services. At Sage, we live and breathe business every day. We are passionate abouthelping our customers achieve their ambitions. Our range of business software and services iscontinually evolving as we innovate to answer our customers’ needs. Our solutions support accounting,operations, customer relationship management, human resources, time tracking, merchant services,and the specialized needs of the construction, distribution, healthcare, manufacturing, nonprofit,and real estate industries. Sage North America employs 4,000 people and supports nearly 3.2 millionsmall and medium-size business customers. The Sage Group plc, formed in 1981, was floated on theLondon Stock Exchange in 1989 and now employs 13,400 people and supports 6.3 million customersworldwide. For more information, please visit the Web site at: www.SageNorthAmerica.com or call1-866-996-7243.Sage6561 Irvine Center DriveIrvine, CA 92618Telephone: 866-530-7243 ERP for Medium and Large Manufacturers©2010 Sage Software, Inc. All rights reserved. Sage, the Sage logos, and the Sage product and servicenames mentioned herein are registered trademarks or trademarks of Sage Software, Inc., or its affiliatedentities. All other trademarks are the property of their respective owners. 45
  • Thought Leadership An ERP Guide to Driving Efficiency Executive Summary Improving business efficiency is a perennial concern for any company that hopes to achieve “best-in-class” operations. Businesses that successfully improve efficiency stand to reduce operating costs while improving the effectiveness and profitability of their operations. They also gain time to devote to strategic planning. While many companies employ siloed applications and manual business processes, best-in-class companies are more likely to fully exploit ERP technology. This paper describes how ERP technology can improve efficiency by: • Standardizing and automating business processes—locally as well as across multiple locations and countries—to accelerate business operations. • Offering a fully integrated suite of business management applications that share a common dataset and extending these applications over the Internet, allowing visibility and collaboration across departments, as well as with customers, partners, suppliers, and remote users. • Providing flexible and customizable reporting to improve business reporting, analysis, and insight. Best-in-Class Organizations LookERP for Medium and Large Manufacturers to Enhance Efficiency Companies that wish to operate in a “best-in-class” manner are continually on the lookout for ways to improve the efficiency of their operations. By operating more efficiently, companies have the opportunity to reduce operating costs while improving profitability. They are also able to redeploy existing resources from time-consuming, manual administrative tasks to strategic decision making and planning. To achieve efficiency gains, “best-in-class” companies are turning to enterprise resource planning (ERP) software solutions. According to Aberdeen, 70% of “best-in-class” companies have a standardized ERP implementation.1 46
  • In contrast, average or laggard companies are more likely to use standalone applicationsto manage operations, such as accounting and finances, customer relationships, payroll,inventory, manufacturing, and distribution, and employ spreadsheets for operationaland financial planning. The use of these disparate applications makes it difficult andtime consuming for employees throughout the organization to obtain the informationthey need in a format they can use. Employees find themselves rekeying informationinto multiple systems or pulling information from multiple systems to create reports andanalyze business information for key business decisions.How ERP Improves EfficiencyERP solutions improve efficiency by automating business processes, furnishing integratedapplications that share data to give employees instant access to the information they need,and by providing business intelligence and analytics to improve decisions and planning.Standardized Processes Accelerate OperationsManual processes can be tedious and time-consuming, and employees can easily missvital steps or provide customers with an inconsistent experience. That’s why, according toAberdeen, the majority of “best-in-class” companies (54%) are looking to use ERP solutionsto standardize and accelerate business processes.2ERP solutions standardize and accelerate processes through automation, which ensuresthat processes are performed efficiently and correctly. Alerts warn managers of exceptionsso they can address any issues proactively.ERP modules are available to automate processes that include:• Accounting and Finance• Payroll ERP for Medium and Large Manufacturers• Human Resources• Sales• Customer Resource Management• Purchasing oInventory• Manufacturing• DistributionCustomizability Supports the Unique Way a Company DoesBusinessEven as they offer standardized processes, ERP solutions offer the flexibility to supportthe unique ways that companies and their employees work. IT departments can takeout-of-the-box processes and configure them to address specific workflow requirements. 47
  • End users can personalize their own desktops, for example, by defining fields, adding buttons, or removing data entry columns they never use to improve personal efficiency. Some ERP solutions allow companies to purchase only the modules they need and then later add modules as necessary without extensive integration. Software development kits (SDKs) are typically available along with networks of systems integrators if more extensive customizations are required. Should the organization upgrade to a newer version, any modifications automatically migrate as well, eliminating the disruption of time-consuming reconfiguration. Automated Processes Span Multisite, Global, or Extended Operations Many companies operate in multiple locations, have multiple divisions or subsidiaries, have global offices, or even collaborate with an extended supply chain that includes customers, partners, and suppliers. Not only can modern ERP solutions streamline processes and improve collaboration within a single company in a single location, these solutions can do the same for organizations with multiple locations, that operate in multiple countries, or that collaborate across the extended supply chain. Modern ERP solutions allow companies to customize processes to meet the needs of individual operations in multiple companies, locations, or countries while at the same time making it easier for multisite or global operations to consolidate and share information. ERP solutions are available that can support multiple languages, currencies, companies, sites, and legislations to allow individual divisions or countries to follow their own business rules while sharing common processes and information. Companies can easily accommodate transactions that span multiple companies by using these ERP solutions that automatically distribute transactions across two or more companies, reducing costs and eliminating error-prone, time-intensive processing. ERP solutions can also consolidate information from separate companies or global locations to enable companies to cost effectively manage multiple companies and achieve comprehensive reporting on multipleERP for Medium and Large Manufacturers business entities. Integrated Applications Enhance Visibility When organizations use siloed applications, users must often retype information into different applications or port data back and forth between systems to run their business. For example, after a salesperson wins an order, employees in different departments might need to enter that order into the sales system, the order entry system, the inventory system, and the accounts payable system. Managers or executives must pull information from various systems into a spreadsheet for analysis and decision making. 48
  • ERP solutions store data from all modules in the same repository. Information is enteredonce and automatically propagated in real time to all parts of the business that need it. Thiseliminates time previously spent reentering data, improves accuracy, and helps employeesmeet customer requirements more quickly. For example, the system will automaticallyreflect a new order in stock levels, production, and accounting while employees can checkan order status or inventory levels without having to track down the information fromseveral people or departments.When data is entered from multiple sites or global operations (in different languages orcurrencies), the system will even “normalize” the data so that information can be viewed inan “apples to apples” manner.ERP systems can also manage electronic documents such as sales orders and invoices, ARinvoices, job cost invoices, purchase orders, payroll direct deposit stubs, and electronicforms. Users save time and money by efficiently retrieving documents saved electronicallyfrom their business desktop instead of manually searching for them. Electronic documentstorage also reduces the possibility of loss or damage to valuable printed records, includingjournals and registers, period-end reports, and all standard reports.Role-based policies safeguard data so users can access the data they need in a secure yetefficient manner. Audit trails allow organizations to easily track any changes made to thesystem, when, and by whom, to ensure that users don’t make any changes for which theyare not authorized.Reporting and Analytics Increase InsightRather than requiring managers or executives wishing to analyze data to find data storedin multiple systems and import that data into a spreadsheet, ERP solutions have alwaysallowed users to analyze data from the repository using reports or standard queries. Unlikeolder ERP systems that provided “canned” reports created at intervals using batch processes, ERP for Medium and Large Manufacturersmodern ERP solutions provide flexible reports that pull data in real time, improving theefficiency and accuracy of the decision-making process.Users employ drag-and-drop interfaces to personalize reports so they can work mostefficiently and can save these reports for their personal use or to share with other users.Users can ask “what if” questions. Ad hoc query capabilities give users immediate accessto information to provide greater business visibility and insight to improve businessperformance. Business intelligence and analytic solutions provide portals or graphicalinterfaces to present key performance indicators (KPIs) that make it quick and easy toidentify unusual events that require attention. Drill-down capabilities enable managersor executives to quickly see transaction details to identify trends or the root cause ofexceptions for more proactive business decisions. 49
  • Flexible Technology Improves IT Efficiency Today’s ERP systems give IT organizations the flexibility to adapt the system to their requirements. ERP solutions that run on a standards-based architecture can support multiple databases, operating systems, and hardware platforms. Such architecture makes it fast, efficient, and cost effective for IT organizations to deploy the ERP solution within their existing environments or modify their environments without extensive changes and customizations, improving IT efficiency. Solutions that support standard IT tools for troubleshooting, optimization, backup, and restoration allow IT administrators to use their familiar tools to safeguard the system and optimize its operation. ERP solutions that employ modern web-based architectures and web services and support wireless and mobile wireless devices give organizations the option of further improving efficiency by extending their internal systems to remote/mobile users, partners, and suppliers. Users simply log onto the system using intelligent, self-service applications. Results By replacing manual processes and siloed systems with a single ERP solution that spans multiple functional areas, locations, countries, or across the extended supply chain, organizations can achieve the following benefits: Reduce Costs by Streamlining Operations From a business perspective, an integrated ERP solution enables organizations to reduce costs by automating workflows to streamline tasks and remove information-sharing bottlenecks so employees can do their jobs in less time. Aberdeen found that by taking advantage of an ERP’s automated and streamlined processes, best-in-class organizations achieved an average 26 percent year-over-year reduction in operating costs.ERP for Medium and Large Manufacturers From an IT perspective, a flexible, customizable ERP solution reduces the total cost of ownership by allowing companies to make changes without the need to modify the system. A modern architecture makes it easy to swap out databases, hardware, or operating systems without the need to revamp the ERP. A system with modules that are integrated out of the box avoids the time and cost of tedious point-to-point integrations. Moreover, with a single integrated system, IT eliminates the need to manage multiple vendors or resellers. Focus on Strategy to Drive Results Using ERP solutions, employees can also do their jobs more effectively. Aberdeen finds that 95% of companies that make the best use of their ERP system are able to achieve complete 50 and on-time delivery and 95% achieve inventory accuracy.3
  • ERP makes it easy to document work steps and processes so people know how to performwork on a consistent basis—when employees have easy access to documented processes,production errors go down and quality goes up. Integrated, collaborative planningprocesses enable more accurate plans and reduced budget cycle times. With more visibilityinto production processes, management can quickly identify problems in the business andtake immediate corrective action. With more accurate data and better decision-makingtools, companies can improve the quality of their decisions, improving operational results.And finally, by reducing manual administrative tasks through automated processes andproviding faster, smarter access to personalized information, companies can empower staffto focus on more strategic issues.ConclusionBest-in-class companies look to exploit ERP solutions to improve their operationalefficiency to reduce costs, improve operational effectiveness to enhance profitability, andmake more resources available for strategic planning. These organizations are turningto ERP applications to meet these objectives. By optimizing their use of ERP solutions,organizations have the opportunity to automate key business processes for moreconsistent, streamlined operations. They can more effectively share information acrossdepartments, locations, and even countries to eliminate duplicate data entry and improvevisibility. And they gain flexible tools to analyze operational data to proactively managebusiness exceptions and improve strategic planning.About Sage North AmericaSage North America is part of The Sage Group plc, a leading global supplier of business managementsoftware and services. At Sage, we live and breathe business every day. We are passionate about ERP for Medium and Large Manufacturershelping our customers achieve their ambitions. Our range of business software and services iscontinually evolving as we innovate to answer our customers’ needs. Our solutions support accounting,operations, customer relationship management, human resources, time tracking, merchant services,and the specialized needs of the construction, distribution, healthcare, manufacturing, nonprofit,and real estate industries. Sage North America employs 4,000 people and supports nearly 3.2 millionsmall and medium-size business customers. The Sage Group plc, formed in 1981, was floated on theLondon Stock Exchange in 1989 and now employs 13,400 people and supports 6.3 million customersworldwide. For more information, please visit the Web site at: www.SageNorthAmerica.com or call1-866-996-7243.1 “ERP in the Midmarket 2009: Managing the Complexities of a Distributed Environment,” By Cindy Jutras, Aberdeen Group, August 20092 “ERP in the Midmarket 2009: Managing the Complexities of a Distributed Environment,” By Cindy Jutras, Aberdeen Group, August 2009 513 “ERP in the Midmarket 2009: Managing the Complexities of a Distributed Environment,” By Cindy Jutras, Aberdeen Group, August 2009
  • The information contained in this material represents the views of Sage on the issues discussed herein current as of the date of publication. As market conditions are always subject to change, the information contained herein shall not be interpreted as any commitment from Sage. This material is for informational purposes only and Sage makes no warranties, expressed or implied. Sage 6561 Irvine Center Drive Irvine, CA 92618 Telephone: 866-530-7243 ©2010 Sage Software, Inc. All rights reserved. Sage, the Sage logos, and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc., or its affliated entities. All other trademarks are the property of their respective owners. 05/11ERP for Medium and Large Manufacturers 52
  • Case StudySAP Customer Success StoryNuestro Queso Start-up LeveragesSAP® Business All-in-One Solution toFacilitate Astonishing Growth Company SAP® Solutions and Services • Name: Nuestro Queso LLC • SAP® Business All-in-One for Consumer Products • Headquarters: Elk Grove, Illinois, USA solution, specialized for food and beverage • Industry: Consumer products—food companies companies • Products and services: Hispanic cheese • SAP Catch Weight Management application manufacturing and distribution • SAP Mobile Direct Store Delivery application • Revenue: $20 million (USD) • Employees: 108 Implementation Highlights • Web site: www.nuestroqueso.com • IT fully outsourced • Implementation partner: Optimal Solutions • Fast-start implementation Integration Inc. • Nine-week deployment • On time and on budget Challenges and Opportunities Why SAP ERP for Medium and Large Manufacturers • Establish a new company supported by an information technology (IT) solution that could • End-to-end business coverage provide a robust platform for aggressive growth • Best industry fit for the business requirements • Facilitate the integration of acquisitions • Built-in support for best practices • Deploy efficient and scalable business processes • Highly qualified and experienced IT partner Objectives Benefits • Convert IT to a “utility” model • Ability to manage all aspects of the business • Establish a powerful IT foundation • Business strategy enabled and realized • Adopt industry best practices • Ability to integrate acquisitions and standardize • Support corporate strategy them to company practices • Scalability of the solution as the company grows 53
  • Here’s an attention-grabbing acceleration statistic: zero to a $20 million (USD) run rate in one year. That was the performance that Nuestro Queso LLC, headquartered in Elk Grove, Illinois, delivered in 2010. To help manage the multiplicity of challenges associated with a “ There are a million ways to expand our fast-growth start-up, Nuestro Queso’s management selected the SAP® Business All-in-One SAP solution, far for Consumer Products solution, specialized for food and beverage companies. beyond the base package. But as a By the time you read this, all these numbers will be dwarfed by their updates, but at the end of 2010, Nuestro Queso has approximately 108 employees, all of whom participate in starting point with company ownership; three distribution centers—in New York, Chicago, and Sacramento infinite growth (California); 175 unique stock-keeping units (SKUs); and $20 million (USD) in revenue. capability, never The company arrived at this point in less than one year, which included a four-month having to leave the production hiatus while the manufacturing plant underwent a retrofit. SAP platform, you Hispanic Cheeses On June 23, 2009, a team of investors solidly grounded in the food industry finalized can’t beat it. “Guy Paproski, President, Nuestro Queso LLC the funding for a new operation dedicated to the development, production, sales and marketing, and distribution of Hispanic cheeses. On the same day, the purchase of a manufacturing plant was completed. A highly qualified team of managers then shifted into high gear to design the manufacturing line and prepare the plant as a state-of-the-art cheese production facility. Simultaneously, the new management team began the implementation of their SAP Business All-in-One solution. Nuestro Queso president Guy Paproski describes the conditions the new IT system had to accommodate: “We have a tremendously complex business. We were setting up essentially three businesses—a manufacturing business, a distribution business, and a sales and marketing business. We needed a fully integrated system in order to exercise the degree of control over our assets that we have to have.”ERP for Medium and Large Manufacturers Nuestro Queso manufactures a very delicate, highly perishable product that is regulated by the Food & Drug Administration (FDA) and United States Department of Agriculture (USDA). Add to that a complex sales and distribution process that takes the product right to customers’ shelves. “We recognized that a significant chunk of our business would be cash,” says Paproski. “We’d be selling to small bodegas [grocery stores] and tiendas [specialty shops], little Hispanic independents, so our fleet of drivers would be out every day delivering cheese. Our customers pay cash on an order-to-order basis, and it turns out that over 60% of our receipts on invoice are cash collected by our drivers. So the need for very robust control over our assets is very acute.” 54
  • Given the complexity of Nuestro Queso’s business, there were very few IT optionsavailable to the company. “The SAP software system is very deep inside the food industry,especially on the distribution side,” says Paproski. “And it has a lot of strengths on the food “ The SAP implementationmanufacturing side as well; it’s a bit of a standard within our industry. I would say that really was thethe SAP Business All-in-One solution combined with its fast-start program and support for enabler of executionbest practices, all of that together, was very much the deciding factor in our selection of for Nuestro Queso.the solution.” The company hadThe SAP Business All-in-One for Consumer Products solution provides midsize companies a strategic plan inwith the in-depth functionality they need to run their entire business efficiently. mind, complete withDesigned for rapid implementation at a predefined price, it helps deliver a fast return financial projections,on investment (ROI) to support increased sales and decreased costs. The foundation of and SAP wasthis solution is the SAP Best Practices for Consumer Products package, based on the bestbusiness practices of consumer products companies that SAP has identified in several selected to enablethousand implementations.Outsourced IT that plan. “ Elliott Garofalo, Senior Vice President, Optimal Solutions Integration Inc.Nuestro Queso management also decided that they were in the food business, not theIT business. They established a relationship with Optimal Solutions Integration Inc. ofIrving, Texas, and proceeded to outsource the company’s entire IT requirement to Optimal.“Knowing we were a start-up with a rapid growth trajectory, we needed a softwareinfrastructure that was going to facilitate this,” says Paproski. “Only SAP or maybe Oraclecould do that. SAP software’s flexibility and scalability, combined with Optimal Solutions’food and beverage industry experience and delivery model, provided us with the affordableand risk-free solution we were looking for. So that’s the thinking that led us to the SAPsolution, and Optimal to deliver it.”For Nuestro Queso, Optimal brought to the table an application management services ERP for Medium and Large Manufacturerssolution that solved all its IT requirements. “Nuestro Queso bought a fully hostedand managed solution from us,” says Elliott Garofalo, Optimal’s senior vice president.“We support the software, we provide functional support, we host them, we do everything.They have no IT people and no IT infrastructure and yet leverage SAP to best run theirbusiness and achieve their tactical and strategic goals. And they pay for it all through asubscription model resulting in a fixed monthly fee that makes the whole thing affordablefor them. And maybe best of all, as they grow, the whole thing scales with them.”Optimal Solutions also provided the SAP Catch Weight Management application and theSAP Mobile Direct Store Delivery application to meet Nuestro Queso’s needs for productionand distribution control. “I still don’t have an IT department,” says Paproski. “We’ve 55
  • outsourced the vast majority of that as part of the software and solutions package that we purchased from Optimal. And that made the cost of entry sufficiently attractive that we could step into a potentially large-scale system like SAP’s that could grow with us as we took off.” “ With the best practices supported by SAP smoothing the way, Nuestro Queso had its SAP solution and entire IT infrastructure up and running within an accelerated nine-week There are probably time frame. 20 key performance indicators that we Growth Management need to keep our eyes on . . . SAP is key In less than one year, Nuestro Queso has achieved a $20 million (USD) revenue run rate, and the company continues to grow at astonishing rates. How is its SAP solution contributing to seeing where we to the management of all this growth? stand at any given point in time and “When you’re growing at 20%, 30%, 50% a month, as we are, there are so many factors you being able to rapidly need to stay on top of,” says Paproski. “They range from what are our quality measures in the plant to what are our selling prices per pound, what’s our margin activity, what are our adjust to changes in return rates, what’s the profitability on every given route, what are the pounds per drop on any given route, and so forth. Because of those three silos we have—manufacturing, distribution, and sales and marketing—there are probably 20 key performance indicators the marketplace. “ Guy Paproski, President, Nuestro Queso LLC that we need to keep our eyes on. And the only way you can get that kind of reporting in real time is to have information technology that is robust across your entire company. So, SAP is key to seeing where we stand at any given point in time and being able to rapidly adjust to changes in the marketplace.” Nuestro Queso’s plan is to grow, and expectations areERP for Medium and Large Manufacturers huge. “We expect in three to five years to be at $150 to $200 million (USD) in sales,” says Paproski. “And in that same time period, we intend to open another 20 distribution centers.” Nuestro Queso has a tool that can support that growth and can go all the way with the company. “There are a million ways to expand our SAP solution, far beyond the base package,” says Paproski. “But as a starting point with infinite growth capability, never having to leave the SAP platform, you can’t beat it.” 56
  • “The SAP implementation really was the enabler of execution for Nuestro Queso,” saysGarofalo. “The company had a strategic plan in mind, complete with financial projections,and SAP was selected to enable that plan. The plan is being successfully implementedbecause Nuestro Queso has the power of SAP behind it.”Wish ListWhat exactly would Paproski like to add to his current SAP solution? “A ton of stuff,” is hisanswer. “We want to flesh out and build on our material requirements planning module.We want to fully flesh out the HR [human resources] module. We want to add in the full-meal-deal quality control module. We are going to do a bit of expansion, perhaps even abit of a change on the direct store delivery side, using the management piece of the toolsthat’s there for the sales force. A lot of what we want to do is already there; it’s sitting therein the software. We just need to have the expertise to be able to leverage it, to utilize it.But those are some of our next steps.”©2010 SAP AG. All rights reserved.SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, and otherSAP products and services mentioned herein as well as their respective logos are trademarks orregistered trademarks of SAP AG in Germany and other countries.Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions,Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as wellas their respective logos are trademarks or registered trademarks of Business Objects Software Ltd. inthe United States and in other countries.All other product and service names mentioned are the trademarks of their respective companies.Data contained in this document serves informational purposes only. National product specificationsmay vary. ERP for Medium and Large ManufacturersThese materials are subject to change without notice. These materials are provided by SAP AG andits affiliated companies (“SAP Group”) for informational purposes only, without representation orwarranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to thematerials. The only warranties for SAP Group products and services are those that are set forth in theexpress warranty statements accompanying such products and services, if any. Nothing herein shouldbe construed as constituting an additional warranty. 57
  • Thought Leadership SAP’s Perspective on ERP for Manufacturing The Wrong Business System Can Hold You Back As small and midsize manufacturers grow, many find it difficult to retain the very characteristics that first led to success—speed, flexibility, and strong customer relationships. Growing manufacturers are often hampered by business systems that simply cannot keep “ Your organization must be able up. Unsophisticated systems can lack the capacity to support daily tasks and are often to adapt to poorly integrated, making them time-consuming and expensive to maintain. Ineffective business-driven technology infrastructure can be a serious impediment to remaining competitive and changes, such as agile. Responsiveness and timely decision making can be hurt by systems that cannot scale to handle the increased number of transactions generated by a growing customer base. geographical growth, Communications with geographically dispersed suppliers and partners can become more reorganizations, complex. and business-model evolution, and still Disjointed, nonintegrated systems can also make it difficult to get full visibility into business operations. Perhaps most important, it is difficult to achieve a unified company mission serve internal and when each operation or geographical location is using independent or poorly coordinated external customers “ quickly. legacy systems. Such systems provide little consolidated visibility or sharing of business processes, which by their very nature must transcend individual operations.ERP for Medium and Large Manufacturers Faced with this common set of challenges, fast-growing companies like yours need a single, integrated business management solution as part of their information technology (IT) strategy. As your business strategy becomes more clearly defined and aligned with a core competence around a specific industry or set of subindustries, industry-specific requirements emerge. You must be able to link business processes and the various departments inside the enterprise that play an interdependent role in those processes. Adopting new, comprehensive technology that underlies the entire organization and integrates the needs of sales, marketing, finance, manufacturing, logistics, customer service, and human resources is critical to providing scalability and delivering value that stands the test of time. And for any IT strategy, flexibility is important. Your organization must be able to adapt to business-driven changes, such as geographical growth, reorganizations, and business-model evolution, and still serve internal and external customers quickly. 58
  • Finding the Right Solution to SupportYour Business GoalsMost enterprise resource planning (ERP) systems can effectively process financial andoperational transactions. Most provide a single integrated and valid source of data formanaging, controlling, reporting, and analyzing business processes. But beyond that, the “ With the right solution, youright ERP solution needs to support your business goals, such as drive business growth, can gain deeperbuild and maintain operational excellence, and optimize financial performance. insight into organizational riskThe right solution lets you proactively manage sales opportunities and marketing planswhile rapidly developing new products and services. To improve sales forecasts and deal and performanceclosures, you can prioritize, reassign, or modify sales opportunities. To open new markets by analyzingand introduce new products, you can rapidly deploy marketing plans and processes. revenue andTo reduce customer churn and increase retention, you can better manage customer service cost informationrequests, contracts, and warranties. And to shorten product development lifecycles, you cancarry out everything from design engineering and integrated product-data management for customers,to manufacturing in one integrated solution. products, projects, “ and services.With the right solution, you can grow and scale your company by optimizing logistics,manufacturing, and resource management processes throughout their lifecycle, whileautomating routine activities across all business areas. You can enable lean shop-floor operations for assembly and fabrication (including extensive repair and overhaulprocesses) to increase inventory turnover and reduce cycle times. You can also proactivelyroute tasks and approval requests to improve efficiency. These solutions let you effectivelymanage inbound and outbound logistics to increase order accuracy and velocity. Theyalso provide alerts and relevant information to employees based on their responsibilitiesto improve decision making. You can better administer workforce processes and talent toimprove employee retention and satisfaction. You can also manage projects, portfolios, ERP for Medium and Large Manufacturersand regulatory requirements to improve resource utilization and compliance.The right solution enables you to accelerate financial closes, increase the accuracy offinancial reporting, and maintain superior cash management. You can improve yourability to maintain a set of balanced books reflecting any business dimension. Supportfor international and local accounting standards also helps you reduce your risk fornoncompliance.With the right solution, you can gain deeper insight into organizational risk andperformance by analyzing revenue and cost information for customers, products, projects,and services. You can centralize and take greater control of cross-company paymentprocesses, such as payments to subsidiaries and other outgoing payments, and consolidate 59
  • global cash positions across your company. By supporting these capabilities, the software can help reduce your banking fees. The solution helps you optimize working capital and liquidity by more accurately forecasting your cash flow and cash requirements. You get a centralized, nearly real-time view of cash positions across multiple bank accounts that help you make the most of your cash and maximize your returns. Overall, you can improve your management of internal controls, including documentation, assessment, and testing. Your Next ERP: Will A Good Fit Now Be a Good Fit Later? For small businesses and midsize manufacturers, selecting and implementing business software can be daunting. There are so many variables to consider and decisions to be made that can involve significant costs and risks. Even after selecting software, your company may still struggle with the implementation because it often requires considerable technical and business process expertise that can overwhelm your in-house staff and budget. The result: unexpectedly long implementation times and cost overruns, without the benefits you expected during evaluation. You need to have complete confidence in your ERP investment. The solution you choose should be configured to match your business requirements now without need for customization. It should also be able to be extended later to meet your future needs. Whether you are engaged in cross-country, cross- currency, or cross-border trade, you need to be able to incorporate additional functionalities to cover, for example, new business processes, different trade patterns, new products, and new users, when needed.ERP for Medium and Large Manufacturers However, most enterprise software solutions fall short of these requirements. They may be designed for smaller companies and, as a result, are too expensive and complex to scale to your needs. Or they may lack the breadth and depth of functionality needed to manage your company’s end-to-end business processes. In many cases, you have no choice but to heavily customize a particular vendor’s software to meet your business requirements, but this comes at a high cost and risk. 60
  • Flexible, preconfigured best practices help mitigate this problem by making an ERP systemfaster and easier to implement and minimizing the need to perform manual systemsconfigurations. With integrated best practices, you can use preconfigured support forbusiness processes, which tailors your solutions to a range of processes and geographies.And your small or midsize business gains the same functionalities as those employed bylarge global firms. Furthermore, the right solution is supported by integrated tools andcontent to give you the details you need during the lifecycle of discovery, evaluation, andimplementation. These tools and content help ensure that what you see during discoveryis what you choose during software evaluation and what you get after implementation.As a result, you receive the business benefits you expected.SAP Business All-in-One SolutionsSAP Business All-in-One solutions are the most powerful, industry-specific ERP solutionsavailable to midsize or fast-growing manufacturers. Built on the proven SAP ERPapplication and flexible SAP NetWeaver® technology platform trusted by the largest enterprises,SAP Business All-in-One solutions are optimized to grow and scale along with the business. Becauseof integrated best practices, you can start with what you need now and extend with additionalpre-integrated functionality for customer relationship management (CRM), supplier relationshipmanagement (SRM), or business intelligence (BI) at any time. ERP for Medium and Large Manufacturers 61
  • Case Study ABAS Software AG Customer Success Story Embracing Global Change with abas Business Software Project Overview: Headquarters (HQ) and Subsidiaries Using or Multiple global enterprise resource planning (ERP) rollouts Currently Implementing Global financial reporting Better communication with foreign subsidiaries abas Business Software: Real-time view for management Better visibility into global operations Austria Customized quote-to-order processes Germany Elimination of shortages and downtime Belgium Better utilization of machinery Reduction of information technology (IT) costs due to Italy consolidation USA China Thailand MalaysiaERP for Medium and Large Manufacturers France Canada Poland The Netherlands 62
  • 12 Countries — 278 Users — 2 ITAdministrators — 1 global ERP SystemWorldwide, one name comes up when dealing with seals for machines and plants.SKF Economos, established in 1976, with 29 subsidiaries and 900 employees worldwide,is a global player in the sealing industry and supplies custom-made sealing solutions andprecision parts made of engineering thermoplastics for all industrial sectors.SKF Economos produces seals not only using the most modern turning technologies, insmall and large production series, but also using injection molding—especially for largequantities. With the invention of the Seal-Jet®-System, which is well known worldwide,SKF Economos operates as a mechanical engineer. Special machines are not only beingused in the group of companies, but are also sold to partners. Manufacturing methods aredistinctive: independent of the injection mold and vulcanization plants, there are hardlyany restrictions regarding dimension and outline. The turned, glued, cut, or welded sealscan therefore be used in almost all imaginable applications. Huge seals used in turbinesand presses, with dimensions up to 8,000 millimeters in diameter, are manufacturedusing a specially developed welding technique and are a unique selling point on a highlycompetitive market.Connecting Foreign SubsidiariesOver the years and as a consequence of restructuring and establishing subsidiaries,SKF Economos recognized the need to replace their business software, which hadbeen in use since 1997. Their software could no longer meet many requirements, whenforeign subsidiaries were to be connected to the SKF Economos HQ. Furthermore, aneBusiness environment was to be realized to enable smooth distribution, cooperation,and communication with subsidiaries and partner companies all around the world. ERP for Medium and Large Manufacturers“We were overdue for a new system and therefore went into the market to look for arespective ERP system,” remembers Mario Brückner, international sales, and responsible forthe ERP software implementation and support at SKF Economos.After a short time, SKF Economos selected abas Business Software. “We were impressed bythe simplicity and flexibility of the software. The vision and strategy of ABAS made a solidimpression. Another advantage: ABAS is represented worldwide by a global network ofsoftware partners with a long track record of ERP implementations, who are available onsite for local ERP support,” Brückner remembers. 63
  • After all, SKF Economos is a make-to-order and serial manufacturer as well as mechanical engineer—all three areas had to be represented in the software. The group wanted to set up clients for the subsidiaries and design a web platform. In the past, Austrian locations were represented as one client in the system. After a restructuring phase, another client was created in abas ERP for each subsidiary; further clients for Germany and Belgium were to follow at a later date. In the course of the implementation, great emphasis was placed on the intensive training of key users. Prior to the “go live” date, they were already familiarized with abas ERP standard functionalities and later carried out training sessions for all other users. “ We were impressed by the simplicity and flexibility of the software. “ The vision and strategy of ABAS made a solid impression. Values of abas ERP At SKF Economos, functions of abas ERP, from purchasing with purchase order management to warehouse management, scheduling, retailing and materials management to sales with sales order processing and accounting are being fully used. Production planning and control using plant data collection (PDC) is one particular feature: there is no work preparation at SKF Economos in production because this would take up more time than producing a seal itself, “Instead, we opt for a flexible, direct sales order processing. All necessary data, such as BOMs [bill of materials] for commissioning are always available directly to the production department. The respective completion confirmations are sent to the system automatically after having ended the task,” Brückner explains. All data, e.g., for warehouse or commissioning, are then available in abas ERP. “Another particularERP for Medium and Large Manufacturers feature is our ‘permanent inventory’ principle. Since this is based on the data in abas ERP, we can call up-to-date and reliable specifications regarding stock,” he adds. Shortages are recognized early, downtimes for annual stocktaking are avoided, and reliable delivery times for customers are guaranteed. Since Day 1, abas ERP has been running smoothly at SKF Economos. “Reduction of stock levels based on the permanent inventory and current data, increased readiness to deliver, combined with reliable delivery dates and shorter lead times in production and a better utilization of the machinery, are a real benefit, which results in our customers being very satisfied with our products and services,” explains Brückner. 64
  • Benefits of a Global ERP SystemAfter completing the ERP implementation, functionalities of abas eB were activated.Using abas eB, companies can make information accessible worldwide—for branches,subsidiary companies, employees, customers, and vendors. SKF Economos uses this “ The system is running very stable andoption to communicate and handle business processes with its subsidiaries and partners. upgrades could beUsing eBusiness, semi-finished products, tools, or machines can be ordered from the done without problems “headquarters and shipped all around the globe. Stock levels can be viewed in real time and over a weekend.the order is directly transferred to and processed in abas ERP. With its group accounting,financial accounting, fixed asset accounting, and corridor controlling for dual financialreporting (statutory & IFRS [International Financial Reporting Standards]), the software alsooffers many possibilities in finance. Availability of over 30 languages—in operation and asoutput languages—is as much of a plus point for internationally operating companies asthe processing of different currencies. ERP for Medium and Large Manufacturers 65
  • Looking back, SKF Economos is very satisfied with the ERP implementation. The abas ERP implementation method has proven itself. Using a multi-level concept and defined project milestones, time frames and budgets were not exceeded. The project status was always clear. In the meantime, about 280 users from 12 countries are working with abas Business Software, installed on a Linux server and administrated by only two people worldwide. “The system is running very stable and upgrades could be done without problems over a weekend,” emphasizes Brückner. About ABAS Software AG Since its inception in 1980, abas Business Software aspires to be a leader in business and technology solutions that provide true value to midsize manufacturing, distribution, and service enterprises. We encourage and empower our employees to use their knowledge and creativity to produce smart solutions that help our customers attain success in an ever-changing world. ABAS is committed to product excellence, business leadership, and an open culture, enhanced by a diverse and international community. ABAS provides smart solutions for doing business in the hyper-connected economy. In a world where smart devices are everywhere and connect in real time, abas Business Software will become the business logic platform that helps businesses operate in a virtual economy. To support our clients, abas applications will operate with data from multiple sources, through a presentation tier users will design, and most of all, with a variety of information delivery mediums. This vision is built on openness, interoperability, ease to use, and increased flexibility of business solutions based on abas business logic. The future will include applications that snap on to the abas business layer and present seamless solutions for any business requirements.ERP for Medium and Large Manufacturers 66
  • Case StudyIgnify Customer Success StoryMicrosoft Dynamics AX Customer Solution Case StudyPopular Consumer Craft and Education Brand Createsa Mold for Future Profits Overview Country or Region Solution United States Ellison chose Microsoft Dynamics AX for its standard processes and scalability, and chose Ignify, a Microsoft Gold Customer Profile Certified Partner, for the implementation. Ellison is one of the largest manufacturers and distributors of die-cutting systems for educational institutions and Benefits leading crafts supplier, with its well-known Sizzix brand of • Operational processes align with the business model products, and distributes globally. for each of the sales channels, providing insights into operational efficiencies. Business Situation • Executives are empowered to make key decisions Ellison business has evolved significantly over the past 30 with real-time business analytics. years and its ERP system does not align with the current • Improved order processing and delivery mechanisms. business model. Ellison needed a system that reflects • Enhanced understanding of customer base and sales ERP for Medium and Large Manufacturers the current global business scenario and processes that growth. improve operational efficiencies. “ This project is a showcase example of a client-partner relationship at the highest quality, delivering the project on time and on budget, with improved business processes and seamless information flow across systems, “ resulting in operational cost efficiencies and improved sales forecasts. Ram Kanagala, IT Director, Ellison 67
  • Ellison, a leading manufacturer and distributor of popular craft and educational products, realized it needed to improve internal processes to reflect its business model in the current global scenario. As sales channels crossed geographical boundaries and customer groups became less defined, Ellison needed an updated enterprise resource planning (ERP) system that could take over for its existing one, which was bogged down with customizations and legacy processes. The company opted to implement Microsoft Dynamics® AX. Ignify, a Microsoft® Gold Certified Partner and Microsoft Dynamics President’s Club and Inner Circle member, helped Ellison implement the new system and also ensured that integrations with existing applications remained or were replaced with in-system functionalities. Ellison is now able to quickly and easily manage sales and inventory transactions, and to leverage its customer and sales history in order to create accurate reports that help guide sales and marketing decisions. Situation Founded in 1977, Ellison is a leading manufacturer of die-cutting products, and a well- known name in the education and, with Sizzix brand of products, the consumer craft markets. Ellison’s products include the EClips Electronic Shape-Cutting Machine and other popular lines of consumer craft tools sold in leading craft and art stores nationwide. Ellison’s professional and consumer customer bases were changing. While it used to have distinct education and craft consumer profiles, many customers were crossing between bases and buying products aimed at both markets. Unfortunately, Ellison was unable to track and forecast these potential sales as well as it wanted. In addition, Ellison’s almost decade-old ERP system was bloated with customizations that the company had built to have the features it needed. All of this created a slow, nonintuitive back-end system that was hindering Ellison from reaching its profit potential.ERP for Medium and Large Manufacturers Ellison realized it needed to update its business model, and needed a back-end system sophisticated enough to reflect the current business scenario across various sales channels globally. The company needed a system that improves operational efficiencies and brings visibility to transactional data. Solution Ellison decided to implement Microsoft Dynamics AX, largely due to its flexibility and great platform for growth. In addition, Ellison was already running Axapta 3.0, so it was comfortable with the platform. The company also recognized the system’s strong foundation for future upgrades, as well as its scalability and ability to talk to Ellison’s overseas locations in the 68 United Kingdom and China, which currently run on different ERP systems.
  • ImplementationWith help from Ignify, Ellison implemented Microsoft Dynamics AX with the followingmodules:• Full Procure to Pay• Order to Cash• Inventory Management• Projects• ProductionIgnify’s expertise with Microsoft Dynamics implementations allowed them to identifyEllison’s biggest needs and offer in-system solutions to the work-arounds that thecompany had been building with its previous customizations. By employing a strategy thatemphasized communication and constant dialogue from data migration to deployment,Ignify was able to ensure the process would be smooth. “The successful implementationof Microsoft Dynamics AX at Ellison can be attributed to the close partnership and focusedteamwork between Ignify and Ellison,” said Sandeep Walia, president and chief executiveofficer (CEO) of Ignify. “We are proud to have participated in streamlining the businesspractices and increased productivity that Ellison has realized as a result.”“ A good discovery process by Ignify helped define the scope and goals of the project early on. This, combined with focus and commitment from the Ellison team, helped the project accomplish a lot more than the “ original goals within the budget and timelines. Bhavesh Ashani, Vice President, Client Services, IgnifyStreamlining Business PracticesThe decision to implement the up-to-date version of Microsoft Dynamics AX came on the ERP for Medium and Large Manufacturersheels of the company’s realization that its business goals and practices were changingdrastically. Ellison’s previous Axapta 3.0 system was completely bogged down withcustomizations, many of which were not currently being used. With the implementation,Ellison carefully selected features in Microsoft Dynamics AX that could take the placeof its most used customizations. Ellison also had a large database of almost 500,000customer records and 25 million sales transactions. Migrating to the new system ensuredthat only active customers were moved to the new system and that all duplicate entrieswere cleansed before migration; Ignify helped with the massive migration by moving 5years of general ledger data. In addition, the new system now allows Ellison to utilizeMicrosoft Dynamics AX Accounts Receivable functionality, which was virtually unusablepreviously because of duplicate or inconsistent customer records. This saves Ellison’semployees valuable time, helps keep its books current, and cuts out time spent manually 69managing invoicing and collections notices.
  • Integrating with Third-party Applications Ellison had a number of third-party applications that helped its system process sales as smoothly as possible. Microsoft Dynamics AX has the functionality to integrate with these various products so Ellison did not have to customize or reinstall key processes. The company was able to keep its existing tax management system, CCH Sales Tax, as well as its Web services software. A major advantage of the new Dynamics AX implementation was the in-system shipping management that integrates with Clippership, reducing the amount of shipping stations Ellison needed in the warehouse by nearly 50%. Functionality in Dynamics AX 2009 also allows Ellison to track in-transit inventory without the need for ghost on-water warehouses. Benefits Ellison’s fresh start began with its Microsoft Dynamics AX implementation. With the new system, the company has cut the fat off its previous database, allowing it to increase efficiency and analyze its data more accurately. Increased Order Processing Efficiency, from Hours to Just Minutes One huge impediment to speedy order processing was the existing ERP’s batch processes. Previously, a credit card batch would be scheduled to be run prior to the picking process, and current orders being placed in the system would suffer from long lag time and decreased processing efficiency. Even more importantly, slow system response time meant that customer service representatives (CSRs) could place an order for the same item, creating back orders. Now, processing batches takes mere minutes, revamped business processes make credit card transaction calls in real time, and back-order conflicts have been virtually eliminated. Decreased Manual Inventory Management Processes by 50%ERP for Medium and Large Manufacturers Ellison had a very unique receiving process with its China manufacturing location. In order to track and manage Ellison’s more than 10,000 stock-keeping units (SKUs) correctly and efficiently, Ignify created a customization that tied in with Microsoft Dynamics AX’s existing in-transit functionality. It allows for multiple purchase order (PO) receipts to be entered quickly and simplifies the process of adding shipping invoices into the product’s “landed cost.” Using the system functionality with automated processes has cut manual entry and maintenance for this important step by over 50%, and eliminated the spreadsheets that were being used to track in-transit inventory. 70
  • Enhanced Understanding of Customer Base and Sales GrowthOne major impetus for Ellison’s decision to overhaul its ERP system was the fact that thesales and marketing team found themselves with a hazy understanding of both theirchanging customer base as well as their sales and marketing forecasting goals. Withthe new streamlined Microsoft Dynamics AX, Ellison now possesses more sophisticatedforecasting functionality as well as a more defined customer database. The cleanseddatabase also allows the company to create accurate reports to leverage its customerand sales order history in order to make accurate and informed sales predictions. Sincethe implementation, business analytics provide real-time Sales Revenue, Margins andExpense reports to key decision makers.The results of the data migration, implementation, and customization of Ellison’s ERP havealready been apparent. Ellison has even planned future implementations of MicrosoftDynamics AX in its China and UK locations. The new system has allowed Ellison to leverageits past and present in order to make educated and creative decisions for the future.“ The successful implementation of Microsoft Dynamics AX at Ellison can be attributed to the close partnership and focused teamwork between Ignify and Ellison. We are proud to have participated in streamlining the business practices and increased productivity that Ellison has realized as a result. “ Sandeep Walia, Chief Executive Officer, IgnifyFor More Information ERP for Medium and Large ManufacturersFor more information about Microsoft products and services, call the Microsoft Sales InformationCenter at 1-800-426-9400. In Canada, call the Microsoft Canada Information Centre at 1-877-568-2495.Customers who are deaf or hard of hearing can reach Microsoft text telephone (TTY/TDD) services at 1-800-892-5234 in the United States or +1 905-568-9641 in Canada. Outside the 50 United States and Canada,please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com. 71
  • Microsoft Dynamics Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software, such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success. For more information about Microsoft Dynamics, go to: www.microsoft.com/dynamics. Ellison For more information about Ellison, call 1-800-253-2238 or visit the Web site at: www.ellison.com or www.sizzix.com. Ignify Ignify is a technology provider of ERP, CRM, POS, and eCommerce software solutions to businesses and public-sector organizations. Ignify is a Microsoft Dynamics Inner Circle Partner and selected as the Microsoft Partner of the Year Finalist in 2010. Ignify has been included as the fastest growing business in North America for 4 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine. For more information about Ignify products and services, call 1-888-IGNIFY5 or e-mail dynamics@ ignify.com or visit the Web site at: www.ignify.com.ERP for Medium and Large Manufacturers 72
  • Thought LeadershipTen Critical Questions to Ask aManufacturing ERP Vendor At a Glance: • The ERP industry has earned such a poor reputation for delivery in the last 20 years that users have learned to live within a very narrow set of constraints. • Many manufacturers focus on the wrong issues when considering ERP solutions and neglect to assess business model fit, architecture, and manufacturing functionality. • Plex Systems offers this guide to help manufacturers break free of this limited mind- set and ask the more important questions when searching for a new ERP solution. Business Model Fit 1. How does the proposed solution support the style of manufacturing? There are dozens of types of manufacturing environments, from job-shop to cell- type organizations to highly complex automated systems and robotics. Additionally, manufacturers use hundreds of manufacturing processes (e.g., stamping, forging, machining, coating, assembly, etc.) across dozens of industries (e.g., automotive, aerospace ERP for Medium and Large Manufacturers and defense, medical devices, food processing, etc.). Each combination of manufacturing style, process, and industry has a completely unique set of requirements. For example, makers of complex, highly configured machines cannot use the same interface as someone who runs high-speed automated equipment making thousands of pieces per hour. It simply isn’t optimized for both businesses. The solution chosen must support the specific style of manufacturing and business model. When evaluating ERP, ask the vendor if plant floor workers can attend system demonstrations or reference visits. If the system is difficult to use, it will become “shelf-ware” and the ROI will be completely compromised. If workers won’t use the software, the company will not get the accurate, timely data it requires to streamline operations and improve quality. 73
  • 2. Can a non-programmer develop a new business process in the system? Billion-dollar industries have been created in the follow-on market, where consultants and programmers charge hundreds of dollars per hour to program hard-to-use legacy systems. A new alternative is available, however: software supporting new business processes tailored to needs. Through point-and-click and drag-and-drop interfaces, advanced users should be able to create new screens or reports without writing any code. 3. How does the system support the “extended enterprise”? The manufacturing operation doesn’t exist as a stand-alone environment; suppliers and customers around the globe require direct access to data from the enterprise. That data connection must be both reliable and highly secure. For the ultimate flexibility, an ERP system should expose any transaction to a customer or supplier—without any programming, and without installing software at the trading partner. Additionally, the interface to the system should be intuitive enough that suppliers and customers will not need training to use it effectively. Useful reports include Problem Reports to track Corrective Action Requests; Lean Replenishment reports to support kanban or pull inventory; and Quality Management reports to track supplier quality. Reporting and data should be accessible via a simple Web browser, without the need to build a separate “portal” for manufacturing partners. This not only simplifies access; it greatly accelerates deployment schedules—from weeks or months to just minutes. 4. How is the software licensed?ERP for Medium and Large Manufacturers The enterprise software industry often plays games with software licensing, offering variable feature sets on a “per user” basis. For example, software vendors convince their customers that only 20% of their workforce should be licensed. This keeps the initial price low and acceptable. Once the software is deployed throughout the enterprise, it becomes clear that to get full value from the software, many more people need to use it—and they all need full licenses, as opposed to the restricted functionality licenses often sold in initial implementations. Manufacturers, especially, are not accustomed to having so many people use the software and will underestimate the number of users necessary. 74
  • The plant floor is where the most important data in a company is created, and any systemutilized in manufacturing must treat plant floor workers as knowledge workers, capturingand validating this important data at the point of origin. This means that plant floor workersneed access to the software as well.A more flexible, open licensing model allows complete deployment throughout theenterprise. Everyone adds value to the products and services, so the most effective systemwill capture important facts about everything going on as it happens.Architecture and Development Approach5. How many ways of accessing the system are there? Is the userinterface consistent throughout the application?ERP vendors might offer different client applications they have developed—one forWindows XP, one for Mac, one for Linux, two or three for various mobile devices, etc.This is not an optimal situation. Each software package must be tested and deployed, andthen maintained and upgraded according to its own schedule—and oftentimes featuresin one client package are not exactly duplicated in another application. The solution issimple: standardization on a Web browser as an interface, accessible from virtually any PCor device with a Web connection.Look for consistency in navigating from screen to screen, in tabbing from field to field,and in how to enter, update, and find information in various parts of the system. A trulyconsistent interface across all sections of the software reduces training costs and increasesadoption—driving faster time to value.6. When and how was the original code base developed?Be careful to differentiate between the “front-end” and the business logic. The front-end ERP for Medium and Large Manufacturersor user interface can be enhanced or modified quickly, giving users the impression thatit belongs to a modern application while the original code is still in place underneath theinterface. Such a system is difficult and expensive to maintain and enhance.Likewise, the data structures supporting many older applications were based on inefficient“flat file” structures, not modern relational databases. Transaction control and reportingcan be very difficult with such outdated architectures.7. How many customers are on the latest release of the softwareand when was the latest release?Most analysts estimate that fewer than 50% of enterprises are within two releases of thecurrent version of their enterprise software packages. 75
  • This is especially important because the traditional method of delivering software is fraught with waste and delays. Makers of on-premise solutions provide software updates, at best, every six months or so. After the planning, hardware upgrades, operating systems patches, migration, testing, retraining and bug-fixing, more time has passed and the customer wonders whether it was worth the work and the disruption to their business. The end result is that most enterprises are two to five years behind the current state of technology, putting them at a disadvantage at a time when the industry is demanding they be more agile. With SaaS software development techniques and delivery over the Internet, software vendors can release changes with greater frequency—even on a daily basis. SaaS is a model whereby the software is accessed over the Internet from anywhere at any time. Users need only a Web browser to run their entire organization. Companies don’t need to invest in and upgrade servers, operating systems, databases, backup equipment, and complex programming environments. Organizations can deploy the application very rapidly since they don’t have the lead time and hassles associated with configuring their local environments. Their software provider is contractually obligated to provide acceptable availability and response time. Software changes and system software upgrades are done without the customer having to lift a finger. Manufacturing Functions 8. How are lean principles supported in the system? Many vendors offer stand-alone solutions to perform certain lean planning functions. These are highly specialized, periodic analytical functions. Once the value streams are optimized, be sure to find out how the system supports lean execution. Is electronic kanban available? Are pull systems part of the core solution? Are transactions poka-yoke’d (mistake-proofed)ERP for Medium and Large Manufacturers at the point of origination? Is heijunka (demand leveling) available? And are these functions supported across the supply chain—with customers and suppliers? Plex Online was designed from the ground up to embrace lean principles, and all of these are supported within the system. 9. How does the detailed data about production, scrap, downtime, labor, and quality inspections get into the system? These are the most important factors affecting profitability and success at a manufacturer— and this is what manufacturing is all about. If this data is captured and validated as the activities are occurring, virtually everyone in the organization will have accurate, timely 76 information for decision-making. Plex Systems recommends that you look for a single, logical portal to capture and validate this information as it is happening on the production floor and the shipping/receiving docks.
  • Today’s manufacturing solutions should enable shop floor workers to be knowledgeworkers. Imagine a worker having everything needed at his fingertips to set up theworkcenter quickly and accurately and to make, count, and measure parts or assemblies.Drawings, setup instructions, material requirements, customer alerts, inspectionspecifications, and more should be available in electronic form on the shop floor.10. Are inventory records directly tied to physical reality?Many software solutions treat inventory as a dollar amount or, at best, several dollaramounts—Raw Material, WIP, Finished Goods. They focus on the accounting transactions.There can be a big disconnect between the physical reality and the dollars in the generalledger.Consider a system that tracks inventory at the container level—whether it is a box ofpurchased parts, an expensive end product with its own serial number, or a coil of steel.The inventory listing would show each “container” of inventory, the stage of productionthat has been completed, and the accumulated cost up to that point.For manufacturing operations in high-precision/high-liability industries such as aerospace,automotive, medical devices, or food it is critical to track the genealogy of products.Be sure to see how the traceability function works in any system. Is it automated andstreamlined, or does it rely on an operator to key in the lot number of the source material?Plex Online tracks serialized inventory at the container level, and tracks it at each step of theproduction process. The traceability features within Plex Online enable any user to quicklytrace a defective product back to its point of origin, and then quickly track forward to anyother parts that include the same defective material or incorrect manufacturing step.About Plex Online ERP for Medium and Large ManufacturersPlex Online, built on a “Software as a Service” (SaaS) model, offers more than 350 functionalmodules, providing manufacturers instant access to vital information and management functionsusing a simple Web browser. The on-demand solution features product lifecycle management (PLM)functions such as program and change management, enterprise resource planning (ERP) functionssuch as accounting and finance modules, customer relationship management (CRM) features suchas order entry and tracking, manufacturing execution systems (MES) functions such as productionscheduling and machine integration and supply chain management (SCM) functions such assupplier quality and traceability. 77
  • Case Study Junction Solutions Customer Success Story Peet’s Coffee & Tea Sets Direction for Growth with Outstanding Quality Overview Country or Region Solution United States Peet’s implemented Microsoft Dynamics AX together with JunctionMCR™ and JunctionF/B™ Industry and integrated these products with existing Food and beverage manufacturing industry— software tools to create a single, unified grocery and specialty food retailing; technology infrastructure. specialty coffee Benefits Customer Profile • Take control of business performance Rapidly growing through multiple distribution • Sustain and manage rapid growth channels, Peet’s Coffee & Tea provides freshly • Streamline technology administration roasted coffee beans, hand-selected teas, and • Provide consistently high quality and prompt delivery related brewing accessories to consumers and businesses throughout the United States.ERP for Medium and Large Manufacturers Business Situation The company wanted to ensure superior product quality while continuing to grow; make business technology more scalable, reliable, and manageable; and be more effective in taking control of the business. 78
  • An unwavering commitment to artisan quality and the freshest roast-to-order productsresulted in success for Peet’s Coffee & Tea. Increasing order volumes in all distributionchannels and steady growth meant the company could no longer use the samelegacy, custom-written, and unconnected software tools to maintain the momentum.By collaborating with Microsoft Gold Certified Partner Junction Solutions, Peet’simplemented Microsoft Dynamics® AX with vertical-specific software that the partnerdeveloped. Today, Peet’s continues to practice its high quality and customer servicestandards while growth proceeds apace. With a unified business management solutionthat enables efficiencies in all company activities, managers can conduct smart decisionmaking and take control of the company’s future. Employees across the organization arefully empowered to deliver the excellent quality customers expect.Situation “ With help from Microsoft Dynamics AX and Junction Solutions, we canAlfred Peet, whose family was involved in the coffee and maintain Peet’s uncompromising focustea trade in The Netherlands, founded Peet’s Coffee & on delivering the freshest roast-to-orderTea in Berkeley, California, in 1966. From the beginning, coffee beans possible in minimal time.Peet set the high standards the company maintains “today. Peet’s selectively sources the highest-quality We can execute flawlessly, every day.Arabica beans and roasts them by hand in small batches Shawn Conway,to present the characteristic flavors of each bean. They Chief Supply Chain Officer, Peet’s Coffee & Teaonly roast-to-order, delivering the freshest coffee possibleto its customers. A publicly traded company (NASDAQ:PEET), Peet’s is headquartered in Emeryville, California, inthe San Francisco Bay Area. During the past five years, thecompany has doubled its revenue.Roast-to-Order for Multiple Distribution ERP for Medium and Large ManufacturersChannelsPeet’s distributes its products through multiple channels,including 193 retail locations in six states. Customerscan also order online or through a toll-free number.A selection of Peet’s coffees is available in nearly 9,000grocery stores across the United States. In addition, Peet’sserves a large number of food service and office accounts,via a dedicated team of account managers. 79
  • Competing with other industry leaders, local coffee shop chains, and specialty retailers, Peet’s is most proud of its competitive distinctions of roast-to-order and delivering the freshest products possible. The company does not keep an inventory of ready-to-ship roasted coffee. Each day, starting at 3:00 a.m., Peet’s roasters working at the company’s only production facility, located in Alameda, California, perform the roasting for the orders that arrived from all channels through midnight of the previous day. Delivery always takes place within 24 to 48 hours of the order submission. Outgrowing Business Technology Growing quickly in an increasingly complex business, Peet’s had soon surpassed the capabilities of its older software systems and the tools that its information technology (IT) department had developed. As Shawn Conway, Chief Supply Chain Officer at Peet’s Coffee & Tea, explains, “Our software systems did not have the scalability to help us manage the business effectively. The IT group worked hard to maintain a plethora of legacy systems, but even so, we lacked reliable, real-time information to enable smart decision making.” In addition to supporting several, partly redundant legacy systems, Peet’s IT group had created a large number of custom integrations between the software tools. The resulting technology environment was extremely complex and challenging to maintain; some of the solutions created in-house occasionally crashed, interrupting operations. During peak transaction times, system performance was not as fast and reliable as Peet’s would have wished. In addition, business managers had reservations about the accuracy of the information in the company’s systems because it was often not current. Just once a month, the finance team received an inventory update, which was based on information from several systems. That inventory update resulted in a general-ledger entry that business planners had to work with until the next update became available. Looking for Better Control and Efficiency In other company operations, the technology tools were limited in helping employeeERP for Medium and Large Manufacturers effectiveness. For example, different software tools supported each of the company’s distribution channels. Gathering the information at the start of every day, assembling it into a practical production schedule, and ensuring the timely roasting and shipment of coffee had become complicated tasks that Peet’s hoped to streamline. In serving customers, the call center team needed to access two different software systems to review customer information, and tracking the progress of a customer order through the workday was not an easy task. The inventory management software provided financial data but did not give enough visibility and flexibility to manage and track inventory movements. 80
  • Peet’s decided it could not continue to maintain both excellent quality and fast growthwithout making a change in its business management technology, simplifying its ITadministration and giving business decision makers reliable, current information. Thecompany also wanted to streamline reporting and compliance with financial and industry-specific regulation by the Securities Exchange Commission (SEC) and the Food and DrugAdministration (FDA). Says Conway, “We wanted a single system that would let us reliablymanage the quality goals we set, run as efficient an operation as possible, and sustain thecompany’s momentum.”SolutionPeet’s created a request-for-proposal document and invited responses from technologyvendors, including Microsoft. Peet’s connected with Junction Solutions, a Microsoft GoldCertified Partner with vast expertise in the retail and food and beverage industries, andreviewed solution demonstrations that the Junction Solutions’ team presented. Companyleadership did not take long to decide on Microsoft Dynamics AX together with twoJunction Solutions’ vertical-specific products, JunctionMCR for multi-channel retail andJunctionF/B for food and beverage. “We realized that we could deploy Microsoft DynamicsAX relatively quickly and at a comparatively low startup cost,” says Conway. “The solutionwould work well with our other Microsoft technologies and was attractive to employeesbecause of its ease of use. What’s more, Junction Solutions had the domain expertise andspecific software tools to help us tailor the technology to reflect our business goals.”Discovery Provides Road Map to Successful ImplementationTo plan the software implementation for best impact and meet the requirements ofthe different business groups within the company, Peet’s began with a thorough, two-month discovery project performed by the technology partner. In that stage, Peet’snoted everything it hoped to accomplish, took a detailed inventory of existing software, ERP for Medium and Large Manufacturersand developed a detailed functional and technical implementation plan. The resultingdesign and strategic assessment report outlined how teams from the two companieswould collaborate to perform the work. “The project-planning report gave us heightenedconfidence that our technology provider would be able to deliver the solution on time,within our budget, and to our standards,” comments Conway.Peet’s planned for an implementation that would last no longer than 18 months.The deployment of a single instance of Microsoft Dynamics AX together with the JunctionSolutions software at the company’s business and production locations happened in twostages. To start, finance, business administration, order management, and other lines ofbusiness received the solution’s functionality. In the second phase, the solution extended 81
  • to production. Technologists from Junction Solutions and the Peet’s IT team collaborated closely, with Peet’s IT specialists largely responsible for the integration of the solutions with third-party applications. Unified Solution and Standard Capabilities Replace Customizations and Software Plurality In addition to implementing Microsoft Dynamics AX, JunctionMCR, and JunctionF/B, Junction Solutions, working with another partner, was able to help Peet’s deploy Microsoft BizTalk Server to connect systems and exchange data between them. The project team created integrations between Microsoft Dynamics AX, the Junction Solutions’ software tools, and a number of business systems and resources that Peet’s uses, including the company’s consumer Web site, a point-of-sale system, shipping and labeling software, and a store replenishment system. The project team used many pre-built integrations to streamline the implementation, and replaced a large number of customizations with more manageable and dependable functionality present in its software solutions. Both JunctionMCR and JunctionF/B offered capabilities that were important to Peet’s. The batch expiration and lot traceability capabilities in JunctionF/B, for example, help Peet’s meet stringent, complex FDA regulations. The team deployed JunctionMCR to enable promotion management for consumer marketing and to facilitate call center operations with specific tools and workbenches, including order creation and order management functionalities. An order integration workbench makes it easy to trace and fix errors in zip codes, credit card numbers, or other details. New Efficiencies Come to All Business Activities Today, order taking, raw inventory, scheduling, roasting, packaging, and shipping follow an extremely efficient, connected process based on a holistic transaction framework. The technology partner used an integration template created for multi-channel retailers,ERP for Medium and Large Manufacturers like Peet’s, to gather all product orders from the various distribution channels and maintain them within Microsoft Dynamics AX as unique order types. However, because fulfillment for all orders involves the same tasks, it became possible to simplify the roasters’ work by giving them a single set of information with optimal production sequencing instead of separate data from each distribution channel. By using convenient touch screens, roasters, packagers, and shipping, employees provide timely updates in the business system as soon as they complete tasks. Through the Wireless Warehouse software from Junction Solutions and wireless devices, warehouse workers can quickly redistribute inventory between facilities and move inventory into pick locations to ensure it’s available for completing the next day’s orders. Inventory reporting now considers actual transactions and updates in real time. 82
  • Team leads from Peet’s were closely involved with the project, starting with the designphase, setting proper expectations and firm schedules. A progressive knowledge transferthroughout the implementation process made it easy for the leads to produce their owndocumentation and familiarize their colleagues with the new software. The 100 employeeswho use the integrated solution are in all business groups. For them, Microsoft DynamicsAX, the Junction Solutions’ software tools, and the connected third-party systems appearas a unified, comfortable software environment that encompasses all aspects of Peet’soperations. In this environment, Microsoft Dynamics AX is the sole source of all businessdata. In business reporting and finance management, the flexibility and extensive reportingcapabilities of Microsoft Dynamics AX are critical. The solution also includes functionalitysuch as key performance indicators to support purchasing and planning.The first phase of the implementation went live in August 2009, and the second phasehappened in October 2009. Peet’s is continuing to explore the advantages of the newtechnologies and expects to upgrade to the next release of Microsoft Dynamics AX, whichwill be available in 2011. Says Conway, “With Junction Solutions and Microsoft DynamicsAX, we have a technology partner and a solution that align with the Microsoft vision andcan support our business for years to come.”Microsoft Dynamics AX integrates with the point-of-sale system in Peet’s retail locations.Financial updates from the stores reflect in the Microsoft Dynamics AX general ledger.Peet’s can closely track replenishment inventory in transit from the roasting plant to stores.When the stores receive the products, store managers confirm the quantities and note anydiscrepancies, which they were not able to do in the past. Managers at Peet’s roasting plant,on the other hand, now can easily review all replenishment orders from the stores, anddistribute limited inventory to minimize the likelihood for shortages in the retail locations.Benefits ERP for Medium and Large ManufacturersHaving implemented Microsoft Dynamics AX and the software tools from JunctionSolutions, Peet’s enjoys a business management solution that supports the company’squality standards and enables it to keep growing. Says Conway, “Our business succeeds bycombining artisan skills and technological enablement. We did not automate anything thathumans could do better, but Microsoft Dynamics AX and Junction Solutions’ technologyhelp our people and our products be at their best every day.” 83
  • Take Control of Business Performance Today, Peet’s business managers receive meaningful, current information from a single system. Company leadership has more accurate, timely information to assess and manage performance of the company’s distribution channels. Generated in a consistent, efficient workflow, the company’s reporting capabilities are more dependable and support FDA and SEC compliance. Many decisions that happen every day now can better align with the company’s goals. “Accurate yield information shows us exactly how much green coffee beans turn into how much roasted coffee output,” says Conway. “Our purchasers can buy more efficiently and at better terms, avoiding passive inventory in the service of the best roasted product.” Peet’s is still in the process of discovering in how many ways real-time information can help business planners take better control of the operation. As Conway explains, “We see that better intelligence and better insight lead to more control and more sound decisions. We now understand our cost structure better and always have current inventory detail so that we can use our resources more wisely and manage for a better return from our spending.” Sustain and Manage Steady Growth With a highly scalable, extensible business management solution, Peet’s is poised to continue sustained growth and increased transaction traffic in all channels, with full confidence that the technology will follow where the company leads. The flexibility and ease of use of the solution will also make it easier for the company to grow through acquisitions. Bringing new employee teams and operational entities into the company’s infrastructure, previously a daunting task, is now an efficient, predictable sequence of steps. Streamline Technology Administration The Peet’s IT team now manages a unified, streamlined software environment that makes optimal use of existing Microsoft technology skills and resources and minimizes the training and support workload for the IT group. With a much smaller number of solutionERP for Medium and Large Manufacturers components, customizations, and custom integrations, the new business infrastructure, anchored by Microsoft Dynamics AX and including JunctionMCR and JunctionF/B, is vastly more manageable and reliable than the challenging, unwieldy technology the IT group was accustomed to. “Our business management solution now helps people succeed,” adds Conway. “It is highly dependable; presents a familiar, comfortable user interface; makes information easier to find; and helps employees to accomplish more on their own instead of looking for assistance.” 84
  • Provide Consistently High Quality and Prompt deliveryCustomers don’t know about the new business management solution Peet’s implementedwith Junction Solutions, but it has a direct impact on enhancing their experience with “ Microsoft Dynamics AX, combinedPeet’s and the company’s products. “With help from Microsoft Dynamics AX and Junction with JunctionMCRSolutions, we can maintain Peet’s uncompromising focus on delivering the freshest, roast- and JunctionF/B,to-order coffee beans possible in minimal time,” says Conway. “We can execute flawlessly, has providedevery day.” the operationalIn the company’s call center, representatives now can interact with customers and easily transparencyaccess all pertinent information from a single system, providing current order updates. necessary forOrders from all channels travel though the company systems dependably in the same Peet’s to create anway. Roasters and their colleagues in the warehouse and shipping teams work from a environment ofconsolidated roasting and packaging schedule provided by the new solution. “Our roastingartisans don’t have to worry about priorities and seasonal order changes. When they start connected people.working at 3:00 a.m., they can use their time in the most efficient way,” explains Conway. Everyone has visibilityAnd, when it comes to fulfillment, employees can easily isolate the orders for overnight and access toshipment and fill them with priority. critical informationSays Conway, “With our integrated business management solution, we will dependably throughout theget the right products out to customers on time and with the quality we are known for. enterprise in real “We do this to any degree regardless of how the business will experience growth and change.” time.For the retail locations, new replenishment and inventory management capabilities meanthat Peet’s can prevent shortages altogether, or minimize their impact, more effectively Jeff Grell,than in the past. President and CEO, Junction SolutionsJunction SolutionsJunction Solutions provides vertical-specific software applications and services that help ERP for Medium and Large Manufacturersorganizations enhance operational performance, reduce costs, expand delivery channels andstrengthen relationships. Built on Microsoft Dynamics® AX and designed specifically for Food& Beverage and Retail companies, Junction Solutions’ innovative offerings focus on enterpriseresource planning (ERP), supply chain management (SCM – demand, order, warehouse, yard anddistribution management), human capital management, merchandising, order entry management,call-center management, eCommerce engagement and fulfillment. For more information, please visitwww.junctionsolutions.com. 85
  • Microsoft Dynamics Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success. For more information about Microsoft Dynamics, go to: www.microsoft.com/dynamics. Inspirational Software and Services for Food & Beverage and Retail Companies Junction Solutions www.junctionsolutions.com I Atlanta I Chicago I Denver I Saint Louis I San Francisco Bay I United Kingdom © Copyright 2010 Junction Solutions. All rights reserved.ERP for Medium and Large Manufacturers 86
  • Case StudyVAI Customer Success StoryS2K for Manufacturing Lights the Way forArchitectural Lighting Corporation Situation Solution Overview Customer Profile Summary BEGA-US is a privately held architectural lighting firm High-end, architectural lighting is a feature present in headquartered in Carpinteria, California. The company supplies almost every public space. Most pay little attention to lighting products for a broad range of both interior and exterior its presence—except when it does not work, is poorly applications. designed, or the quality is exceptional. Naturally, the design, manufacture, and distribution of these products Objectives is of paramount importance to architectural lighting BEGA looked to replace its disparate accounting system with a modern ERP package that could seamlessly integrate all companies, which require an effective enterprise departments and reduce processing and development times. resource planning (ERP) software system to fluidly Additionally, BEGA pursued a sales configurator system that could and efficiently integrate all aspects of the business simultaneously build item numbers and price lighting orders. from high-level financials to basic warehousing tasks. When BEGA-US found its existing ERP software was Solution not functioning optimally, the firm turned to Vormittag • VAI S2K for Manufacturing ERP for Medium and Large Manufacturers Associates, Inc. (VAI) to find the best solution to replace • Capacity Requirement Planning its outdated system. • Warehouse Management System Benefits Since the implementation of VAI S2K for Manufacturing has seen a significant improvement in the company’s operating efficiency, and data management is streamlined in an integrated and accessible solution. BEGA saw a significant improvement in the process flow as well as reductions in order to shipment times. The sales tool was customized specifically for the BEGA sales team so they can design, build, and cost a product estimate from one location and in one program. 87
  • Customer Profile Founded in 1985 as a joint venture partnership with the managing partners of BEGA, located in Menden, Germany, BEGA-US is a privately held U.S. Corporation, headquartered in Carpinteria, California. BEGA identifies lighting needs in today’s architectural environment and fulfills those needs for both interior and exterior applications. The company designs and manufactures a broad range of lighting products with uncompromising emphasis on elegance in design, superior materials, and performance. Problem Context An outdated product configurator and a disparate accounting system challenged BEGA’s daily operations. The company’s product configurator lacked the ability to cost materials as orders were built, leaving BEGA to manually calculate cost for thousands of items—a waste of precious time in an environment where the ability to produce quality products quickly and efficiently is critical. Therefore, costing and billing for a project was more difficult than necessary. In addition, the company’s old green screen “sea of menus” did not have the point, click, and drill-down capabilities of a more modern graphical user interface (GUI). GUI provides a friendly, windows-like environment, which users prefer and BEGA desired. Objectives BEGA looked to resolve issues throughout the enterprise, including the accounting, manufacturing, engineering, warehousing, purchasing, and sales departments. The company’s primary goal was to replace the outdated accounting system with comprehensive ERP software that could seamlessly integrate all of these functional areas with the ability to retrieve relevant data across departments, analyze it quickly,ERP for Medium and Large Manufacturers and make real-time decisions. Additionally, BEGA pursued a sales configurator system that could simultaneously build item numbers and price lighting orders. Finally, BEGA sought a solution that would reduce processing and development time across the sales, engineering, and manufacturing departments—a critical quality in an industry where sale-to-delivery timeliness can define a company’s reputation. Finding the Right Partner BEGA researched many solutions before deciding that VAI was best suited to meet its specific needs. VAI created a ‘Sales Tool’ to electronically build part numbers and price BEGA’s lighting products—solving BEGA’s inability to manufacture products and cost materials concurrently. 88
  • Moreover, VAI’s experience and knowledge of manufacturing, coupled with its devotedteam of skilled professionals, cinched the deal. BEGA was particularly impressed by VAI’s‘no pressure’ sales tactics, as well as the company’s competitive product pricing. “ BEGA needed an updated ERP system with the flexibilitySolution to address the firm’s specific criteria. VAIProcess collaborated withVAI worked directly with BEGA to assess the company’s requirements and devise the BEGA to design aappropriate solution to meet all of its needs. After the initial consultation, S2K forManufacturing went live at BEGA in November 2007. The implementation directly and solution that waspositively impacted all aspects of the business. The most prominent improvement has easy to use andbeen a direct result of the customized Sales Tool, which allows team members to enter fully integrated. Wea base item number and then choose from several options such as color and wattage. are confident thatThe system then identifies an itemized parts list, order number, and cost estimateautomatically—saving the company precious time and money. S2K, backed by our dedicated team, willUsing the Solution to Solve the Problem provide the ultimateS2K has provided a platform for BEGA to realize its goals—significant improvement in the platform for BEGA’scompany’s operating efficiency and streamlined data management in an integrated and “accessible solution. This top-down view frees management to view aggregate financial continued growth.records in real-time, finding problems before they occur. Concurrently, the instantaneous Pete Zimmerman,data retrieval capabilities make customer interactions easy and efficient. Sales employees Manufacturing Segment Manager, VAIcan check current stock levels before taking an order,allowing staff to predict production times accurately.Pete Zimmerman, VAI Manufacturing Segment Manager,said, “BEGA needed an updated ERP system with theflexibility to address the firm’s specific criteria. VAI ERP for Medium and Large Manufacturerscollaborated with BEGA to design a solution that was easyto use and fully integrated. We are confident that S2K,backed by our dedicated team, will provide the ultimateplatform for BEGA’s continued growth.”EvaluationResults and BenefitsThe implementation has been an outstanding success forBEGA. The company grew significantly in 2008, partiallyattributable to S2K. Production times have been reduceddramatically and customer satisfaction ratings have 89increased. BEGA saw a dramatic improvement in the
  • simplified sales order system, including reduced time for order entry and improved efficiency in the order process. The improvement in process flow, from order to shipment, was a paramount success, as were the impressive reductions in planning and purchasing time. BEGA, impressed with S2K for Manufacturing’s results, implemented VAI’s Capacity Requirement Planning (CRP) to eliminate a disparate production planning system. The company is now in the process of implementing VAI’s Warehouse Management System (WMS). Customer Quote According to Terri Gennaro, MIS Manager at BEGA, “BEGA experienced its largest growth ever last year, and having VAI’s S2K system helped our company absorb the growth easily. The Sales Tool that VAI created specifically for BEGA was an important upgrade for our engineering and sales staff, and the newly integrated ERP system was so efficient that despite our record growth, we didn’t have to bring on many new employees—significantly increasing company profits. VAI’s customer service, attention to detail, and willingness to customize modules puts VAI steps above the competition.” For More Information For more information about VAI products and services, call VAI at 1-800-824-7776, email sales@vai.net or visit www.vai.net. © 2009 VAI. All rights reserved. This case study is for informational purposes only. VAI MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT. 08/09ERP for Medium and Large Manufacturers 90
  • Product InsightsMicrosoft Dynamics AX 2012A New Generation in ERP Mike Ehrenberg, Technical Fellow, Microsoft Corporation, April 2011 Microsoft Dynamics® AX 2012 is not just the next release of a great product. It is, in fact, a generational shift in business software, delivering new levels of capability, unmatched agility, and a compelling and empowering user experience. At the same time, Microsoft Dynamics AX 2012 sets a new standard for simplicity. This paper does not pretend to capture every detail of the product, but instead highlights the key innovations that make Microsoft Dynamics AX 2012 powerful, agile, and simple. Powerful Many enterprise resource management (ERP) systems have never moved beyond managing the administrative dimension of your business, tracking general ledger, payroll, and HR, while the real operation of the business is managed elsewhere. Microsoft Dynamics AX 2012 is different, covering both the administrative and operational requirements. To do this, Microsoft Dynamics AX 2012 delivers rich, prebuilt, industry-operational functionality out of the box, with proven functionality for manufacturing (process, discrete, and lean), distribution, retail, public sector, and service industries. By delivering this capability, Microsoft Dynamics AX 2012 gives you ERP for Medium and Large Manufacturers more value faster, and establishes a strong platform for independent software vendors (ISVs) to more efficiently deliver the specialized vertical functionality unique to verticals within those industries. Stronger base functionality and a broad portfolio of specialized vertical solutions means a better fit for the needs of your business, more value, and more rapid time to value. For example, for the public sector Microsoft Dynamics AX 2012 incorporates fund accounting as required by public sector entities. Historically this critical capability needed to be addressed as customization or as part of the workload delivered by an ERP ISV focused on specific public sector vectors. Delivering this level of functionality out of the box, as part of the Microsoft Dynamics AX 2012 industry capabilities, empowers public-sector customers and dramatically simplifies the work of ISVs building for verticals 91
  • in that industry. However beyond public sector, many private sector companies look for increased accounting control and are adopting fund accounting techniques. Because these capabilities are part of Microsoft Dynamics AX 2012 and not the addition of an ISV focused on public sector, they are available to private sector customers as well. The ability to combine capabilities from multiple industries for one customer is increasingly important—manufacturers often manage their own distribution and sometimes operate their own direct retail operation, and large numbers of customers in all industries have segments of their business that operate with the project structure of service industries. Microsoft Dynamics AX 2012 industry capabilities make the power of this functionality available to all customers. Microsoft Dynamics AX 2012 is a truly global solution, designed to scale with your business. Simple enough to deploy for a single business unit in a single country, Microsoft Dynamics AX 2012 will support the unique requirements for business systems in 36 countries—all from a single-instance deployment of the software. Multiple currencies, multiple time zones, multiple languages, and compliance with multiple banking and reporting standards and legislative codes give you the global coverage that you require. And a layered architecture and installable language packs provide the flexibility for future growth to other markets, including options for agile, partner-led localization. Business software is powerful if it empowers users—increasing their productivity and providing strong insights that help them make better decisions. This is the heart of Microsoft Dynamics AX 2012, centered on the latest generation of its Microsoft Dynamics RoleTailored user experience.ERP for Medium and Large Manufacturers 92 Figure 1: Familiar RoleTailored User Experience
  • • The base of the RoleTailored user experience is familiarity—users comfortable with the Windows® operating system and Microsoft® Office are immediately at home in Microsoft Dynamics AX 2012. The Microsoft Outlook® messaging and collaboration client–styled navigation is enhanced with navigation concepts from Windows 7, the contextual access to relevant functionality from the Fluent™ user interface pioneered in Microsoft Office 2010, and the use of Search metaphors to find information throughout Microsoft Dynamics AX 2012.• The familiar experience extends even further to drive productivity—for analysts working with data from Microsoft Dynamics AX 2012, interoperability with Microsoft Excel® spreadsheet software and PowerPivot brings that data into those tools that analysts expect, with a native, natural experience enabling rapid, effective access to business system data.• Workflow automation, built on the .NET Workflow Foundation, brings user tasks to a central task pane, including tasks assigned to an individual, their role, or a specific functional queue. Tasks and input queues of documents are combined in the RoleTailored user experience of Microsoft Dynamics AX 2012 to help users quickly prioritize the work they should be doing. The system is not just there to record transactions when users finish their work; it is helping them follow consistent processes and focus on their most important tasks.• The value of a business system is not about putting transactions in; instead it is about turning those transactions into information—into business intelligence (BI)—to help users make faster, better decisions. To do this, business intelligence must be an embedded part of the application, not a separate tool that requires users to take extra steps and switch contexts. Rich, embedded BI is at the core of Microsoft Dynamics AX 2012 with: • More than 30 Role Centers shipped out of the box, to provide the right BI for each user’s job role • 11 SQL Analytics Server Cubes behind those Role Centers ERP for Medium and Large Manufacturers • Key performance indicators tailored to each process and role based on those cubes • Over 800 out-of-the-box reports, all delivered through SQL® Server Reporting Services • Rich interoperability with Microsoft Excel to surface report output and enable analysis • Standards-based data interoperability with PowerPivot for ad hoc slicing and dicing • InfoParts providing in-context BI fully embedded throughout the Microsoft Dynamics AX 2012 user experience 93
  • And of course these are all developed using tools that enable extensibility to rapidly add the unique requirements of ISV vertical solutions and individual business customers. Microsoft Dynamics AX 2012 further innovates to capture business intelligence about workflow and process together with transactional information to enable rich analytics about process effectiveness, with a focus on empowering business process optimization. Strong administrative ERP functionality, combined with industry-operational functionality, a scalable global system, and a familiar, empowering user experience with embedded BI to keep information in context, define Microsoft Dynamics AX 2012 as a truly powerful business application. Agile Excellence for a business application begins with two primary challenges: how well does the software model the real world, and how quickly can I make it fit my business in a rapidly changing world? If the fidelity between software model and reality is high, then implementation is straightforward and the software is able to provide strong insight, empowering efficient business execution. If it’s not, then implementation is filled with compromises and workarounds and using the software is filled with challenge and complexity. It’s that simple, and it’s the beginning of why Microsoft Dynamics AX 2012 is different. The heart of Microsoft Dynamics AX 2012 is a set of unified, natural models that let you see, measure, and change your business. In developing this release, every application concept involved in representing the business in software was reexamined. In each case,ERP for Medium and Large Manufacturers limitations that forced workarounds and compromises in older ERP products were lifted, and new capabilities were added to provide an even richer software representation of a business and its structure, processes, and policies. Unified, natural Microsoft Dynamics AX 2012 models make modeling simple businesses fast and easy and yet still provide the richness and flexibility to represent the most complex organizations. 94
  • Figure 2: Graphical Design of Declarative WorkflowsFundamental elements of the unified, natural models in Microsoft Dynamics AX2012 include:• Flexible business organization modeling, allowing you to capture the physical locations of your business, legal entity structure, and business reporting structure.• People, with separate modeling of the person, their reporting hierarchy, and their role.• Declarative representation of business workflow, policies, and dollar limits—and the ability to specialize that policy for different parts of the organization model, without writing code. For example, as a business analyst you have the ability to grant different purchase order approval rules to different legal entities within a graphical workflow editor, with no coding required.• Unlimited financial dimensions, allowing categorization and analysis of transactions ERP for Medium and Large Manufacturers across multiple axes.• Date effectivity for data and models at the framework level, with additional security control on future effective information, to streamline the definition of “to be” organizational structures, hierarchies, processes, and policies, and to enable before-and-after reporting across organizational changes.• Support for multiple hierarchies—for example, one based on HR reporting and another based on legal entity, with the ability to designate one hierarchy for one approval process and another for a different process—all without writing code.These same capabilities that drive the agility of the core of Microsoft Dynamics AX 2012have been implemented so that they can also be leveraged by ISVs building solutionsthat extend the core product. The result: richer solutions and consistent customer 95experiences spanning core product and partner extensions.
  • Natural models simplify system administration as well. Microsoft Dynamics AX 2012 manages security based on roles and tasks—users are mapped to roles and given access to the tasks that they are responsible for. The system knows which low-level technical assets are required to complete those tasks—administration happens at the level that the business naturally thinks about their people, roles, and responsibilities. Microsoft Dynamics AX 2012 is simpler to set up and simpler to change because the software reflects the real world in a natural way. Beyond the horizontal system, the investment in unified, natural models extends even further into the Microsoft Dynamics AX 2012 industry capabilities. For example, the system supports traditional discrete, process, and lean manufacturing modes. Historically most applications supported only one of these models. Companies, on the other hand, are often not purely one mode or another. A process manufacturing company often has some operations that are discrete, and in some cases, a single company may blend all three modes. This impedance mismatch between software and the real world forced users to either work with multiple applications or create awkward workarounds to use an application to represent a process that is outside its capabilities. Microsoft Dynamics AX 2012 breaks through this limitation—in a single instance it is possible to model production processes of each type. The software is able to represent the manufacturer’s real world with high fidelity, simplifying operation and improving results.ERP for Medium and Large Manufacturers Figure 3: Elements in Layered Model Store Enabling these unified, natural models, Microsoft Dynamics AX 2012 architecturally provides a model-driven layered architecture (MDLA) that makes company- 96 differentiating changes easy to execute. As more and more of the system is defined
  • through models, unique requirements can be addressed declaratively without writingcode. For example, Microsoft Dynamics AX 2012 enables list pages—an importantvehicle for accessing system data—to be defined completely declaratively, with a singlemodel covering delivery of those pages on both client and portal experiences. Beyondpages, models are used to define data, process, and policy—enabling business usersto directly express their requirements, reduce complex coding, and simplify upgrades.Layered models enable customer-specific requirements to build on top of vertical,local, and base system capabilities in an ordered structure. The combination drivesoverall system agility—speeding the process of fitting the software to the business atimplementation, and more importantly, enabling rapid system evolution in the face ofchanging business conditions and requirements.System deployment represents another critical dimension where businesses demandagility—growth, or even consolidation, will change a business’s needs. Evolvingtechnology may change the most effective way to meet those needs. Microsoft DynamicsAX 2012 enables flexible deployment alternatives that support your business todayand tomorrow. Microsoft Dynamics is committed to enabling deployment choice—that includes on-premise deployment and partner private cloud hosting today, anda roadmap to Microsoft cloud capability in the future—all with a single applicationsolution. Deployment of a model at a specific moment in time should not lock acustomer into an application that should be the heart of their business for a very longtime; customers can choose Microsoft Dynamics AX 2012 because it is the right solutionfor their business.SimpleAs business applications evolve, the natural tendency is for complexity to increase.Instead Microsoft Dynamics AX 2012 makes an intentional commitment to simplicity—focusing specifically on explicitly engineering to simplify every aspect of the system, ERP for Medium and Large Manufacturersfrom installation through deployment, implementation, customization, user experience,and upgrade. 97
  • Figure 4: Familiar User Experience Also in Microsoft SharePoint® • For users, simplicity begins with a familiar interface that makes the application simple to learn and intuitive to use, and continues with explicit work to streamline every step in high-velocity transaction processes like order entry. • Microsoft Dynamics AX 2012 also brings the power of software to more users in the business, adding rich functionality for supplier relationship management (SRM) and a rich set of employee self-service functionality for HR data, procurement, and travel expense management. • Through interoperation with Microsoft collaboration technologies from Microsoft SharePoint, Windows® Azure™, and Microsoft Lync™, Microsoft Dynamics AX 2012 brings collaboration directly into context through the application, making it simpler to connect employees, customers, suppliers, and partners. • For system administration, Microsoft Dynamics AX 2012 automates application lifecycle management, making the system simpler to deploy, manage, and upgrade for customers, implementers, and ISVs. For example, in MicrosoftERP for Medium and Large Manufacturers Dynamics AX 2012 every step of the product installation process was examined, and the entire process was overhauled to remove steps, eliminate opportunities for error, and streamline the interaction between IT and application roles, dramatically shortening and simplifying the process. Simplicity drives adoption and ensures that customers truly get the benefit of the system’s power and agility. 98
  • Microsoft Dynamics AX 2012—A Business Solution from MicrosoftThe anchor point for Microsoft Dynamics AX 2012 is that it is a business solution fromMicrosoft. That heritage brings with it an obligation and a commitment to bring the fullbreadth and depth of Microsoft research, development, and innovation investment tobusiness customers in a unified solution. This commitment manifests in four key pillarsfor Microsoft Dynamics AX 2012 customers and partners:• First Microsoft Dynamics AX 2012 is delivered on a platform of familiar, high-value, low−total cost of ownership (TCO) technology. Whether IT is managed directly by the customer or by their partner, Microsoft technology means access to a broad universe of people and resources that already understand the technology platform.• Next the Microsoft Dynamics AX 2012 solution delivers pervasive interoperability with Microsoft Office, SharePoint, and Lync, whether on-premises or in the cloud, to bring users the familiar, productive experiences they expect—empowered with access to Microsoft Dynamics AX data and functionality. For example, BI accessed naturally through Microsoft Excel, documents stored in SharePoint visualized in business context through Microsoft Dynamics AX, Microsoft Dynamics data available for seamless inclusion in Microsoft Word documents, and presence and click-to-communicate capability delivered through Lync interoperability.• In addition, Microsoft is committed to bringing the latest innovations across social, mobile, visualization, machine learning, and natural user experiences to business users, in context, today and tomorrow.• Perhaps most importantly, the commitment to bring Microsoft technology to business users is not a one-time event at a single point in time—it is a commitment to continuously renew that technology from generation to generation. Renewable technology, delivered through an upgradable application—power and productivity on-premises today, with Microsoft Dynamics AX 2012 evolving to include the cloud ERP for Medium and Large Manufacturers tomorrow with the next major Microsoft Dynamics AX release.In December 2010, Microsoft Dynamics AX was recognized as a leader for both visionand execution in ERP by Gartner. Microsoft Dynamics AX 2012 delivers the next step inthat vision—the beginning of a new generation of business application productivity.A core principle for Microsoft Dynamics products is a commitment to continuouscustomer care, ensuring a path forward to future product versions. Microsoft DynamicsAX 2012 is no exception, with tested, proven tools, capabilities, and processes to helpcustomers transition from earlier Microsoft Dynamics AX versions to Microsoft DynamicsAX 2012. The new version delivers revolutionary new capability in an evolutionary way. 99
  • Microsoft Dynamics AX 2012 is here. Welcome to the new generation of business application productivity. © 2011 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. Other names and brands may be claimed as the property of others. Microsoft Dynamics AX 2012 is a pre-release product under development. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. All pre-release product release dates and features specified are preliminary based on current expectations, and are subject to change without notice. Microsoft may make changes to specifications and product descriptions at any time, without notice. Sample code included in this presentation is made available AS IS. THE ENTIRE RISK OF THE USE OR THE RESULTS FROM THE USE OF THIS CODE REMAINS WITH THE USER. This content is provided “as-is”. Information and views expressed in this content, including URL and other Internet Web site references, may change without notice. Some examples depicted herein are provided for illustration only and are fictitious. No real association or connection is intended or should be inferred. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION. NO LICENSE, EXPRESS OR IMPLIED, BY ESTOPPEL OR OTHERWISE, TO ANY INTELLECTUAL PROPERTY RIGHTS IS GRANTED BY THIS PRESENTATION. Microsoft products are not intended for use in medical, lifesaving, or life sustaining applications.ERP for Medium and Large Manufacturers 100
  • Vendor Directory
  • Vendor Directory Headquarters Web site Toll-free Twitter Vendor E-mail address International-accessABAS Karlsruhe, www.abas-software.com @abasERP Germany Contact form available on Web site +49 721 96 72 30American Software Georgia, USA www.amsoftware.com 1-800-726-2946Inc askasi@amsoftware.com +1 404-264-5296Aplicor Florida, USA www.aplicor.com @aplicor Contact form available on Web site +1 561-347-0300CDC Software Georgia, USA www.cdcsoftware.com @CDC_Software info@cdcsoftware.com +1 770-351-9600Consona Indiana, USA www.consona.com 1-888-826-6766 @ConsonaCorp info@consona.com +1 317-249-1700Deacom Pennsylvania, USA www.deacom.net @deacominc Contact form available on Web site +1 610-971-2278Deltek Virginia, USA www.deltek.com 1-800-456-2009 @Deltek Contact form available on Web site  Epicor California, USA www.epicor.com 1-800-999-6995 @Epicor Contact form available on Web site +1 949-585-4000Exact Software Delft, www.exact.com @exactsoftware The Netherlands Contact form available on Web site +31 15 711 50 00FactoryMaster Virginia, USA www.factorymasterinc.com 1-888-446-3856  info@factorymasterinc.comGlobal Shop Texas, USA www.globalshopsolutions.com 1-800-364-5958 @globalshoperp Solutions Contact form available on Web siteGlovia (Fujitsu) California, USA www.glovia.com 1-800-223-3799 marketing@glovia.com +1 310-563-7000IBS Solna, Sweden www.ibs.net info@ibs.net +46 8 627 23 00IFS Linköping, www.ifsworld.com 1-888-437-4968 Sweden Contact form available on Web site +46 13 460 40 00Industrial Karlsruhe, www.canias.comApplication Software Germany vertrieb@iascon.de +49 721 9 64 160 Infor Georgia, USA www.infor.com 1-866-244-5479 @Infor sales@infor.com +1 678-319-8000IQMS California, USA www.iqms.com 1-866-367-3772 @IQMSERP info@iqms.com +1 805-227-1122Jeeves Information Stockholm, www.jeeves.se/en @JeevesERPUKSystems Sweden info@jeeves.se +46 8 587 099 00Junction Solutions Colorado, USA www.junctionsolutions.com @JunctionSol webinfo@junctionsolutions.com +1 303-327-8800Kingdee Shenzhen, China www.kingdee.com/en @kingdee asiapac@kingdee.com +86 755-2661 2299Lawson Minnesota, USA www.lawson.com 1-800-477-1357 @LawsonSoftware Contact form available on Web site +1 651-767-7000Microsoft Washington, USA www.microsoft.com/erp 1-888-477-7989 @MSFTDynamicsERP Contact form available on Web site
  • Vendor Directory Headquarters Web site Toll-free Twitter Vendor E-mail address International-accessNavigator Business Utah, USA www.nb1s.com @NavigatorSAPSolutions Contact form available on Web site +1 801-642-0123NetSuite California, USA www.netsuite.com 1-877-638-7848 @NetSuite info@netsuite.com +1 650-627-1000Openbravo Pamplona, Spain www.openbravo.com @Openbravo info@openbravo.com +34 948 287 507Oracle California, USA www.oracle.com 1-800-392-2999 @Oracle oraclesales_us@oracle.com +1 650-506-7000Plex Systems Michigan, USA www.plex.com 1-888-454-7539 @PlexSystems info@plex.com +1 248-391-8001ProcessPro Software Minnesota, USA www.processproerp.com 1-800-457-3548 @ProcessProERP info@processproerp.comProfitKey New Hampshire, www.profitkey.com 1-800-331-2754 @ProfitKey USA marketing@profitkey.comPronto Software Victoria, Australia www.pronto.com.au @ProntoSoftware info@pronto.com.au +61 3 9887 7770QAD California, USA www.qad.com/erp 1-888-641-4141 @qad_corp  info@qad.com +1 805-684-6614Ramco New Jersey, USA www.ramcoondemand.com 1-800-472-6261 @RamcoSystems info@rsc.ramco.com +1 609-620-4800Sage Newcastle Upon www.sageerpsolutions.com 1-866-530-7243 @SageERP Tyne, UK Contact form available on Web site +44 191 294 3000SAP Walldorf, Germany www.sap.com 1-800-872-1727 @SAP Contact form available on Web siteSolarsoft Business Ontario, Canada www.solarsoft.com 1-888-544-6315 @SolarsoftPkgSystems Contact form available on Web site +1 905-224-2222 Syspro California, USA www.syspro.com 1-800-369-8649 @SYSPRO_USA info@us.syspro.com +1 714-437-1000TGI Ohio, USA www.tgiltd.com 1-800-837-0028 @TGILTD info@tgiltd.com +1 419-841-0295TOTVS S/A São Paulo, Brazil www.totvs.com @TOTVS Contact form available on Web siteUnit4 Sliedrecht, www.unit4.com @UNIT4_NL The Netherlands Contact form available on Web site +33 184 44 44 44Verticent Florida, USA www.verticent.com 1-800-251-8449 info@verticent.com +1 813-226-2600Vormittag New York, USA www.vai.net 1-800-824-7776 @VAIsoftwareAssociates, Inc sales@vai.netxTuple Virginia, USA www.xtuple.com @xTuple Contact form available on Web site +1 757-461-3022
  • Technology Evaluation Centers (TEC) helps private- andpublic-sector organizations choose the best enterprisesoftware solutions for their unique business needs—quickly,impartially, and cost-effectively. TEC’s online EvaluationCenters, containing IT research and extensive knowledgebases that catalog vendors’ support for thousands ofenterprise software features and functions, are the leadingresource for IT decision makers around the world. Bycombining that information with a proven methodology,unique Web-based software selection platforms, and yearsof software selection expertise, TEC delivers an unmatchedrange of online software evaluation and selection servicesthat bridge the gap between enterprise decision makersand the vendor/value-added reseller (VAR) community.
  • Technology Evaluation CentersTechnology Evaluation Centers Inc.740 St. Maurice, 4th FloorMontreal, QuebecCanada, H3C 1L5Phone: +1 514-954-3665, ext. 254Toll-free: 1-800-496-1303Fax: +1 514-954-9739E-mail: buyersguide@technologyevaluation.comWeb site: www.technologyevaluation.comThe information included herein reflects the latest research conducted by TEC’sanalysts. Said information may have changed at the time of publication and doesnot constitute representations on behalf of present vendors for, without limitations,functionality, upgrades, delivery, or development. The reader should not rely solelyon the information herein for software selection related decisions. TEC makes noguarantees with respect to the accuracy of said information.TEC, TEC Advisor, and ERGO are trademarks of Technology Evaluation Centers Inc.All other company and product names may be trademarks of their respective owners.© Technology Evaluation Centers Inc. All rights reserved.ERP180511