Whether you’re exploring your options for new business platforms, or ready to get started, we are trusted business partners for some of the world’s most well-known brands. With over 25 years of experience with the Microsoft stack, we can help you understand all the capabilities Microsoft has to offer.
When moving to a single global erp instance for consumer goods companies
Managing multiple ERP instances is common for Consumer Packaged Goods (CPG) companies who inherit a system through business acquisition, or have customized legacy systems for each business unit, channel, location, and or department. As old technologies lose their effectiveness, customizations are made and patches are created to keep the systems working. This can lead to a growing mess.
Companies that are considering consolidating to a unified platform for ERP, CRM, and business intelligence know that the process will be time consuming and costly, but the benefits of global visibility and universal business processes throughout the organization will immediately show a ROI. For many, consolidating and moving to a single instance of a modern platform is key to their very survival and being able to support the solution for the long term and keep it up-to-date. (Want to dive deeper into the reasons? Check out the Top Benefits of Standardizing Global CPG Manufacturing with a Single Instance ERP Solution).
There are three critical success factors to consider when planning to move to a single ERP instance:
1. Infrastructure Plan and Management
With any ERP implementation, you need to assess your existing infrastructure and make sure you have good plan in place. This should be your starting point. What does your existing infrastructure look like? How will the organization be accessing the solution – in the cloud or from a datacenter? You will need to examine the full range of your IT architecture, including data network equipment, telecommunications, servers and storage, data center efficiency, end-user technology, physical security, and support strategy. Will your current network be able to support the additional demands of the new modern unified platform so that you get the security, reliability, and cost savings you expect? Is it time to consider a cloud strategy that will allow you to always stay fresh on the latest version without the management of infrastructure?
2. Master Data Consolidation and Management
The master data which is spread across various business information systems will need to be consolidated and moved into a single data management hub. Take a look at the entities and processes and create consistency in the way the master data is managed or what is called Global Master Data Management. For example, look at how the company is going to define products, customers, and vendors across the organization and standardize that data up front. You will need to make the global design decisions early in the process and stick to it throughout implementation, as well as after you are up and running. The quality of this data will be a critical driver to the success of the implementation.
3. Process Standardization
You can realize significant cost savings by standardizing processes across the entire global supply chain, whether you own it or not. The goal is to integrate your processes and standardize them as much as possible which will lead to common parameters for comparison, reduction in costs and a single internal view of the organization. Such process standardization is the foundation for enabling shared services across the enterprise. For example, you can standardize key global procurement processes, which can ultimately provide greater transparency, and increased procurement speed and efficiency along the supply chain, by consolidating and managing procurement resources spread around the world under a centrally shared procurement center.
Selecting an ERP application and implementing a global single instance can be challenging, but the benefits and return on investment can be considerable. Be sure to keep these factors in mind as you go through your evaluation process and work with an experienced partner familiar with your industry who can carefully walk you through your options and alternatives.
Whether you’re exploring your options for new business platforms, or ready to get started, we are trusted business partners for some of the world’s most well-known brands. With over 25 years of experience with the Microsoft stack, we can help you understand all the capabilities Microsoft has to offer.
Anyone who has ever visited the American South has probably encountered kudzu…how can you not? It’s EVERYWHERE.
If you aren’t familiar (lucky you), kudzu is a species of climbing vine native to Asia. Locally, it is known as “the vine that ate the South.” When it was first introduced to the United States in the late 1870s, it was considered a miracle plant with a wide variety of uses — as long as it was managed properly. However, decades of neglect have left the South engulfed in kudzu, which is estimated to spread at a rate of about 150,000 acres per year. On average, Southern communities spend about $6 million per year to combat this killer weed.
At this point, you may be thinking, “That’s fascinating, but has nothing to do with Dynamics AX or Dynamics 365.” Not true! Dynamics AX had its own problem with invasive activity in the form of overlaid code (which can impact the move to Dynamics 365). And like kudzu, it was initially viewed as a good thing.
Until the introduction of Dynamics 365, overlaying code was the only way partners and customers were able to offer customizations for industry requirements due to AX’s 3-tier infrastructure. By the sheer nature of the software, some invasive overwriting was bound to occur. However, the degree of invasiveness really boiled down to a fundamental split in philosophy about Dynamics AX.
Some partners (like Sunrise) celebrated what Microsoft Dynamics AX is at its core. Solutions offered by these types of partners offered additional functionality to the software while minimizing customizations to what came out-of-the-box (because the long term maintenance and upgradability was just as important as the added industry capabilities).
Other partners were not as satisfied with the core functionality of Dynamics AX and tried to force a different structure onto the software. These partners’ add-ons, while providing legitimate benefits, often overwrote key features standard to AX. The more customization that occurred, the more deeply these ‘roots’ become entwined with the source code. When it came time to upgrade, untangling everything became just like trying to get rid of kudzu — frustrating, time-consuming, and expensive.
With the introduction of Dynamics 365, developers are required to create extensions that interact with, but don’t alter, Dynamics 365’s source code. This way customers and partners can still incorporate industry-specific tweaks and still take advantage of the regular platform and application updates released by Microsoft. Another great benefit is that code extensions don’t break after you run an update. Dynamics 365 simply searches for the existing extension and picks up right where it left off.
(If you’re interested in the nitty-gritty details, this is a great article that dives into what overlays and extensions can and can’t do.)
So what does this mean for you? It depends. If you are new to Dynamics 365, this is great news because you can rest easy knowing that you can always take advantage of the latest and greatest in Dynamics 365 without having to worry about any customizations interfering with an update.
If you are planning to migrate or upgrade from an older version of Dynamics AX to Dynamics 365 you’ll need to plan to do a little homework. First, take a hard look at your customizations and see if you still need all of them, since new functionality is being added regularly. For those customizations you decide to keep, you need to check with the ISV developer to ensure that they have been converted to code extensions. If they have, make sure to ask how the ISV has adapted/plans to adapt to keep up with more frequent Microsoft releases. Also, depending on how invasive previously implemented customizations were, you may also need to allot additional time to untangle your data to prepare it for migration.
Unlike the South’s on going war with kudzu, Microsoft has managed to get to the “root” of invasive code overlays and has found a permanent solution to the problem. While legacy Dynamics customers may see the repercussions of code overlays for a few more years, the end is in sight!
Whether you’re exploring your options for new business platforms, or ready to get started, we are trusted business partners for some of the world’s most well-known brands. With over 25 years of experience with the Microsoft stack, we can help you understand all the capabilities Microsoft has to offer.
In day-to-day operations we focus on demand planning. We focus on supply planning. Then… we seem to lose focus. There is sometimes a sense of wishful thinking that the demand plan that was so diligently generated will magically appear in the supply plan the way we want and everything will work out perfectly!
Unfortunately, real life rarely works that way. It comes down to a fundamental difference in the ways that demand and supply plans are generated. Demand planning tends to be at a higher level—for example, at a style or style-color by week. Supply planning is at the most granular level—say, style-color-size by day. This difference in calculation is further complicated by actual orders coming in. How are they accounted for in the demand plan?
Ultimately it comes down to forecast netting. It can sometimes be tough to realize that netting logic has an impact on how the supply plan should be developed. This brings us back to the million-dollar question: is there a magic formula for how to best net demand? Short answer—not really. Some larger companies choose to run algorithms based on years of historical data, but not every company can access its data easily, or the company may be so new that folks are still figuring things out.
The right answer is depends on how aggressive or conservative your company wants to be when it comes to planning. Deciding whether to net demand at a high level then disaggregate it to lower levels, or vice versa, is an art and a science.
Just be aware that you should be prepared with a contingency plan if your actuals come in higher than your demand plan, or vice versa—but that’s a topic for another day.
Whether you’re exploring your options for new business platforms, or ready to get started, we are trusted business partners for some of the world’s most well-known brands. With over 25 years of experience with the Microsoft stack, we can help you understand all the capabilities Microsoft has to offer.
Don’t panic…your ERP solution will scale…probably.
Have you ever caught yourself lying in bed, staring at the ceiling and worrying about work? Or maybe the barista has asked for your coffee order three times but you haven’t noticed because you’re daydreaming about a new ERP solution. You need one that will support your company’s growth into new global markets, tear down the regional silos, and finally clean up the customization mess. You know there are always challenges with implementing a new system—so would a global ERP template help, or just compound that risk and the cost?
When you finally make the decision to change your overall ERP solution, there comes a point when you need to decide whether deploying a global ERP template across multiple sites, divisions, and regions is worth it or not. The answer to this question will ultimately drive the overall strategy of pretty much every design, development, and deployment decision to come. Not to mention the long-term support of the solution going forward.
You can see why it’s not a question to take lightly.
While defining a global ERP template can reduce implementation and operational costs, and harmonize processes across business units and regions, it certainly isn’t without its own risk or cost. Here are three of the many points to consider when deciding if a global template is right for your organization:
Organizational/Product Diversity
Is this your organization? If so, a global template may not be for you.
The first thing you can do may be the easiest or hardest thing to accomplish: evaluate your organization with as little bias as possible. Is getting everyone to agree on a topic like herding sheep, or is it more like wrangling cats? The more centralized the decision-making processes are, the better a fit your organization is for a global template. The more autonomous the management structure is across regions, the greater the challenges you will face trying to standardize these regions to fit the mold of a global template.
Also realize that such centralization may not be necessary for all business functions. Some internal facing workflows such as finance, may be more suitable for a global template, while external facing workflows, such as order to cash, may be less suitable.
One more point to consider—how similar are the products manufactured across the divisions of your business? If each division makes similar products, it will be easier to implement a global template, whereas a varying set of products might not lend itself as well to such a project.
Cost Justification
You will also want to consider the true return on investment for such an initiative. There needs to be a pretty compelling business case to support this kind of undertaking. Let’s be frank: implementing a global template is hard. It’s a consensus-driven design process that needs to be justified by a realistic ROI. Although a global system creates a consensus across diverse business units and regions, provides a more accurate and consistent view of the global business, and is less expensive to support and maintain, the actual implementation will be more costly and complex at the front end of the implementation. That investment needs to be weighed against the benefits of a global template.
Infrastructure
Finally, take stock of whether there is a global infrastructure in place to support such an endeavor. If you are truly running one global template from one instance of the database, users from all over the world will need access at various times of day. This means having reliable and reasonably fast connections for those remote users, as well as round-the-clock support for them if issues arise. You’ll need to consider peak user load times and whether your infrastructure can handle the volume at max capacity. Without such an infrastructure, the template may simply be an interesting yet unachievable idea.
These points aren’t meant to scare anyone away from implementing a global template. They are just three considerations to weigh before a final decision can be made. However, if you can honestly assess the state of your global infrastructure, the sheep-to-cat ratio of your brand, and can justify the upfront cost and effort, you’re well on your way to making an informed decision about what’s right for you. As for the rest of the things to consider—that’s where Sunrise Technologies comes in.
Whether you’re exploring your options for new business platforms, or ready to get started, we are trusted business partners for some of the world’s most well-known brands. With over 25 years of experience with the Microsoft stack, we can help you understand all the capabilities Microsoft has to offer.
Do you have a single source or are you getting your data from different places? It is not uncommon to see businesses allowing local decision making to box them into a situation where they have lots of data but very little information. Businesses need to think about if they have a strategy for understanding their data, both locally and globally.
When your product is sold around the world do you have the information that you need? Are you having to chase down that data and sort it out? Businesses need an explicit strategy of how they are going to operate in a global model. That data needs to be streamlined so useful information can be gathered making it easier to make the best business decisions quickly.
A good place for a business to start is with Microsoft Dynamics AX (now known as the cloud based ERP and CRM solution called Microsoft Dynamics 365) and making sure they have an implementation and consulting team that knows their business. Microsoft Dynamics AX is an enterprise system that has a single source of data, that’s easy to use and allows for flexibility in your operations. Combine that with an industry expert that has a Microsoft Gold ERP Competency and you’re on the right track to getting the data you need and turning it into information you can use to make great business decisions.
Whether you’re exploring your options for new business platforms, or ready to get started, we are trusted business partners for some of the world’s most well-known brands. With over 25 years of experience with the Microsoft stack, we can help you understand all the capabilities Microsoft has to offer.
The Role of ERP and the Evolution of the Manufacturing Supply Chain
Manufacturing supply chains have gone through a lot of changes over the years. Having worked with Apparel and Footwear manufacturers and Furniture manufacturers for nearly two decades, we’ve witnessed these changes and how manufacturers have especially been impacted due to increased globalization and consumer demands. While the market opportunities are enormous for manufacturers today, inevitably the environment in which they operate has become more complex. As a result, companies must be agile to be able to compete in this complex supply chain environment or be left behind.
Twenty years ago manufacturing companies executed most, if not all, of the supply chain parts and components by themselves using a vertical or centralized supply chain. The manufacturer would basically be in control of the entire supply chain process from stocking raw materials to distribution. Enterprise resource planning (ERP) software was still the go-to supply chain system for many larger companies and was adequate because most of the supply chain data was stored within a single enterprise.
There was a shift in the late 1990s when U.S. manufacturers began outsourcing their operations to lower-cost suppliers across the globe. This changed the way manufacturers manage their supply chains, adding much more complexity of decisions and data from various vendors and locations. Today, supply chains continue to grow in complexity and with fluctuating global conditions; manufacturers are forced to reconsider their supply chain strategies and the technology used to manage them.
Many of the furniture and apparel manufacturers we work with today were full vertical manufacturers. For instance, apparel manufacturers would have started from yarn, potentially owning the yarn manufacturing and continuing all the way up to a finished garment, finally distributing to a customer or wholesaler. For the furniture industry, you may have started from a raw wood substrate and fabric type that culminated into a finished product of a sofa. One company would manage all of the manufacturing steps that were attached to each of those subcomponents. So the company was purchasing all of the raw materials that it took to make that product and all of the subcomponents. Not that this was simple to model, but it certainly remained under one administration for management and decision making.
Today, that supply chain network has become segregated. The purchasing has become a more complex situation. You are buying sub components of your final product; you are buying fabric, cut parts, and maybe even just buying the finished good, and adding a final attribution to the product for your customer. You are the marketing entity, you are the selling entity, you are the merchandising entity, but you are most likely not manufacturing the product.
So from an ERP system perspective, how do you model that divided supply chain? A good example would be a production order. In a traditional sense, you created a production order for your own manufacturing facility. If there were five steps in the manufacturing facility, you simply had the subcomponents that matched the five steps in your supply chain; you went to step one, you made the subcomponent, you packaged that subcomponent, sent it to step two, and continued to the finished product.
When you get into the divided supply chain, you have to accept and depend on the vendor’s ability to produce that production order, including communication to that vendor as to what that production order needs to look like. Management becomes not only a planning issue within your company, but also a management issue, understand and have visibility of that subcomponent’s production in their facility and in the supply chain.
So our customers may ask, “Do I model the vendor’s capacity and the vendor’s execution of that production order? Because in the traditional sense, it was all mine, I managed it all, and I ran it though my system, but now it’s somebody else doing the work, it’s somebody else’s manufacturing location. How much control and how much visibility do I even get to what my vendor is doing?” They may have a vendor in China, a vendor in India, and/or a vendor in Mexico, in their planning process. They must consider which vendor is the most economical to work with on this particular product during a particular time of the year, and what is the capability of that vendor to even produce that product, even if they are the least expensive option? What is their capacity? What kind of relationship do they already have with the vendor? What kind of control do I have over this subcomponent? There are many different decisions that have to be made involving vendor control and the global aspect of those decisions toward the planning process to create a complete product.
We must have a system that will allow us to handle these challenges by modeling the supply chain in the relationships that I just described, being able to handle a production and purchasing arrangement between the company and their vendors. Microsoft Dynamics AX can model very nicely the finished SKU or finished good and all of the subcomponents of the finished good. We cannot only create our internal steps or production routing, but we can also create what is called a subcontractor work order or subcontractor relationship that resides within that supply chain network. For example, my process in the U.S. as a manufacturer is to screen print on an NBA jersey, but I purchase the blank jersey from someone in China. I have an exclusive relationship with that vendor in China, by which I can model their capacity and by which I can model a production order that is going through that vendor’s facility. The issue is that in order to invoke that relationship, I am actually purchasing a service from them, as well as purchasing the product itself. So you have to have the ability to have a purchase order and a production order so that you track the execution of the production but you can also execute the purchase from that vendor, and that’s the difference in the supply chain today.
Microsoft Dynamics AX allows you to engage with that vendor by modeling a work center at the vendor location; therefore, you can model the capacity, you can model a production work order going through that capacity, and you can purchase the service which is associated to that production. Transportation logistics can be modeled from a distribution perspective as well. You can model a warehouse location at that vendor and you can model the warehouse location at the back end of your supply chain, finally connecting them with a transportation operation between. This allows full visibility to when it is produced, when it leaves the vendor’s factory, when it’s on the water, when it arrives at the port, then arriving at your distribution center where you can complete your necessary activities of the supply chain process and distribute to the customer.
Microsoft Dynamics AX truly allows you to model that global sourcing supply network, and with the multi-site/multi-location capabilities of AX, you are able to model different countries in different ways for that product. Product with varying prices across countries, varying costs and BOMs, etc… but at the end of the day it is the same finished good item.
As manufacturers become more concerned about the need for technology that is capable of working across a network of trading partners, our customers look to Microsoft Dynamics AX as their go-to ERP software of choice which plays a vital role in centralizing transaction data and managing the global supply chain.
Let’s look at some ways Microsoft Dynamics AX can help meet these challenges for Consumer Packaged Goods manufacturers.
Manufacturers must embrace change if they want to make the improvements necessary to compete in this dynamic, increasingly complex industry. We’ve seen the companies which have successfully adapted and evolved their supply chain are now, not only the survivors in the industry, but have become the leaders in the market. While we are starting to see a shift that shows many companies’ manufacturing processes returning to the United States, and returning to a vertical manufacturing model, business will benefit from a system that is agile and powerful enough to work domestically and globally.
Whether you’re exploring your options for new business platforms, or ready to get started, we are trusted business partners for some of the world’s most well-known brands. With over 25 years of experience with the Microsoft stack, we can help you understand all the capabilities Microsoft has to offer.
