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Inventory Allocation

As the SVP of Global Business Development for Sunrise Technologies, Cem Item serves as a trusted advisor to C-level executives running large global enterprises. He conducts corporate business strategy engagements and digital transformation workshops around the world. With over 20 years of consulting experience, Cem specializes in the textile, apparel, footwear, home furnishings, consumer goods manufacturing, and retail industries.

If hard allocation is the hammer and nails of supply chain, soft allocation is like magnets and a whiteboard.

Defining soft and hard allocation

Allocation (the point where supply meets demand) is one of the most important pieces of the supply chain. So many critical business processes— customer service, inventory, sales — start hinge on smart allocation. Among supply chain professionals, software vendors, and other stakeholders, different words and terms get thrown around and people get confused. Here’s our point of view on hard and soft allocation, and challenges within each.

Very simply, hard allocation means the commitment between supply and demand cannot be changed. It’s been finalized, agreed upon, and now items are ready to go. Soft allocation, on the other hand, has a little wiggle room. Supply can shift as needed. Both practices play an important role in the supply chain, but typically we expect allocation to start out soft. Over time, as conditions change, allocation should get harder. During the planning process, hard and soft allocation can even be tied together.

Key differences between hard and soft allocation

Soft allocation

Supply is flexible, depending on changes to demand. It’s possible to shift quantities and orders as needed.
Usually, in the early stages of planning, soft allocation is the name of the game. Delivery is a long way off.
Deals with planned and firm entities alike.
More planning-oriented.

Hard allocation

Supply is committed to the demand, with no changes.
Delivery date is very soon…think days or weeks.
Only interested in firm entities.
More execution-oriented.

Challenges in the planning process

Planning usually starts with a forecast. Over time, orders are placed and users compare them to the forecast and adjust. The type of business can dictate how planning is handled. For example, wholesale businesses that gradually firm up demand over time may have semi-firm demand like a bulk or blanket sales order. For retail or eCommerce businesses, demand is never locked in until a customer places an order. Things get really complex for companies with multiple channels – retail, ecommerce, and wholesale, for example. Every channel requires different demand planning, from forecasting to bulk orders to placing actual orders.

Meanwhile, you also have planned purchase orders or production orders. Over time, these planned orders are scheduled, or goods are produced and delivered, and placed in inventory. All along the way, a company is juggling many types of supply (planned orders, in-progress orders, inventory, etc.) alongside many types of demand (the forecast, sales orders, standing bulk sales orders, etc.) And it’s the supply chain’s job to strike the delicate balance between the two.

How soft allocation helps you manage your supply chain

Let’s say you’ve just begun a new season, or otherwise in the beginning of the planning cycle. At this point, few orders are confirmed. You have a forecast, but products are still on order or in production, or something in between. This is the worst possible time to start hard allocating supply against the demand. You’ll encounter both inventory headaches from all the effort to re-organize and re-plan when orders are canceled or rescheduled, and you’ll have a bunch of customer service problems, too. This is the time when you should go with the flow. This is where soft allocation is your superstar.

If hard allocation is the hammer and nails of supply chain, soft allocation is like magnets and a whiteboard. While orders are being placed, you should be able to shift supply to demand as priorities change. Seeing the big picture — whether that’s by channel, customer, product, vendor, or other entities — is key to understanding and managing your supply chain for the best results.

Hard allocation comes into play when you’re ready to execute. At this point, you’re dealing with the firmest supply and demand (inventory and sales orders). Releasing the orders might be constrained by fulfillment rules, like no partial shipments, or at least fifty percent of line level is satisfied, or similar. Challenges at this stage are implementing these fulfillment rules while maximizing the amount of inventory that ships. The right allocation solution lets you set up and edit these constraints quickly and easily.

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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.

Continuous updates: stay current and avoid issues

Scott Hambright is Sunrise’s Director of Global Customer Support. Prior to joining the Global Support Team, Scott was a Senior Technical Architect for Sunrise, assisting clients on ERP implementations in the apparel, retail, consumer goods, and manufacturing industries.

The new ERP update model

The continuous update model has been one of the biggest shifts in modern ERP over the past few years. In the past, companies would spend millions of dollars and go through intensive upgrade projects to migrate to the newer version of whatever ERP they were using.

ERP upgrades used to be expensive and time-consuming, but no more. Instead, companies have replaced one anxiety for another – continuous updates. Dynamics 365, and cloud-based infrastructure, means software updates can be pushed automatically. But this makes people nervous. Since an ERP system handles so many functions within a business, users are wary to just accept the latest updates. But they’re essential for keeping your business humming along. So, you need a strategy for handling continuous updates in a way that maximizes their value and minimizes impact on your business.

Prioritize the most essential business functions

When it comes to updates to your ERP system, focus on maintaining business continuity. Before you start testing, define the most important processes — the ones that you have to get right to keep the lights on. Being able to get orders out the door is far more important than posting a fixed asset depreciation journal. Get your team together and make a list. Plus, it’s easier to define success when you have criteria to refer to.

Focus on testing customizations and extensions

There are generic ERP software functions, and then there are your functions — the customizations and extensions that make your business unique. Get your software vendor to handle testing the basics, like creating sales orders, receiving a purchase order, etc. And if your software vendor can’t or won’t do this for you, find a vendor who will. This testing phase is your opportunity to make up scenarios to ensure your customizations are good to go.

How to handle integration testing

Integrations are the most fragile part of your system, so spend the most time making sure those connections are solid. Luckily, you only have one aspect to test – your connection, not the external system. Here’s one way to do it:

For inbound messages: have a set of sample data prepped before you start
In your test environment: push the sample data through the system (with the new updates) and see what happens.
For outbound messages: export your data in XML format and use file comparison tools to see if anything changed from the new updates.

Use automation to keep up with updates

Most cloud solutions will come with tools to help you test updates. This is where automation comes in handy. You can save significant amounts of time by setting up automated functional and integration testing. There are a lot of options – you can build functional scripts to run through your customizations. You can take data snapshots for use in inbound and outbound integration testing. Obviously, you’ll need a separate software environment to test everything, and a human to oversee this testing process.

We recommend that you aim to make testing your software updates as fast and automated as possible (so if there is a problem, you can devote time to fixing problems, not boring rote work).

Checklist for testing ERP updates

Define the most important business processes and prioritize testing those first.
Create test scenarios for your system’s customizations and extensions. Leave the standard functionality testing to your vendor
Spend the most time on testing integrations – these are the areas that are most unique to your system footprint.
Consider automated testing for functional and integration updates.

See how Dynamics 365 handles inventory management

Are you interested in learning more inventory best practices? Would you like to a see a modern, streamlined allocation solution that gives you both flexibility and accuracy? Contact Sunrise today!

Season codes: what are you really tracking?

The importance of seasonal products for brands

Some brands live or die by seasons. We work with a lot of apparel and fashion brands, and seasonal inventory is very common for these companies. Winter coats, summer dresses, that sort of thing. While other types of businesses certainly have a seasonal element, there is tremendous pressure for brands to stay on top of the latest trends (or create trends themselves).

Optimize inventory with season codes

Season codes give you the ability to report on a product’s sales performance by season. This is a good thing. Especially for apparel and fashion brands, the styles of products change from year to year. A style may have one season to prove itself, and if it doesn’t sell well, it’s gone next year. Often, we find companies add the season code to a product’s style number — for example, say you make a dress and call it DressF20.

Embedded season codes in style numbers cause problems

At first glance, combining season codes and style numbers seems fine. It makes logical sense. But over time, keeping these two attributes together causes problems. Let’s examine a few:

Problem 1: If you decide to sell across seasons, you need to create new style numbers for the same product

The dress from Fall 2020 was a big hit. You want to carry it next year. Great! However, you’ll now have to make a DressF21 style and move the 2020 inventory to the new 2021 style number.

Problem 2: Carried-over styles need new color and size product variants

The original dress you sold that was so popular — you also have to make new color and size variants for the carried-over style.

Problem 3: You must complete inventory transfers for the new SKUs.

You’ve got your new style number, your new variants — now it’s time to transfer the leftover inventory from the old SKU to the new SKU. Now imagine doing all this work for 10, 20, 30 styles every season. Think about all the time and effort wasted — all because you’re tracking styles and the season code together.

Last season doesn’t really mean last season (for styles)

Ask yourself: what data are you really trying to capture with the season code? Are you trying to document:

When the product was designed?

When the product was manufactured?

The selling season for the product?

A better way to manage seasonal inventory

You may find a more logical attribute than season, or that there are actually multiple “seasons” that have nothing to do with whether it’s snowing outside or not. Maybe design seasons are the way to go. Another way to think about it is in terms of color. Colors lend themselves to seasonality more than style, so you could link a season code with a color rather than a product. The best way to generate season codes will differ for your business, but being thoughtful about what you really need that data for, and setting it up right the first time, can save time and money down the road (no more frantically keying in new product numbers and inventory transfers).

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What should your product numbers mean?

As a Senior Supply Chain Consultant for Sunrise Technologies, Melissa Welhelmi brings over 20 years of industry experience to the table and serves as a trusted advisor for apparel, footwear, and consumer goods companies that are in the midst of an ERP replacement.

Intelligent product numbers

Like we’ve discussed before, product is the heart of your brand. And since product structure is such an integral part of your business, how you number (or don’t number) those products matter. A lot.

Intelligent numbering is very common in the industries we work with. This is when a product’s number or ID contains meaningful information. For example, a fashion brand might have a jacket label WJF20S123-BLK-S. In the style name, “W” means Women, “J” means Jacket, F20 means Fall 2020 season, S123 means the sequential style number. “BLK” is the color black and “S” stands for small size. The style numbers can get really detailed.

At first, intelligent numbering makes a lot of sense, especially for quick analysis. At a glance, users can see the most important attributes. Especially with companies using legacy inventory management systems, users may rely on those product numbers packed with meaning for reporting and analytics.

Why smart numbering is no longer a best practice

Businesses change. Employees leave and take their institutional knowledge with them. New staff members have to learn and maintain the product numbering schema. Because humans maintain these numbers, mistakes happen. Eventually, you may find that no one understands what your company’s product numbers mean anymore, but you have to maintain it for the sake of not having a better alternative.

In many ways, intelligent numbering is an outdated practice that should be left behind with legacy systems. There are many downsides:

Someone needs to be well-trained and well-versed in the product numbering schema so they can correctly configure products. Mistakes cost time and money to fix.
Heavy reliance on insider knowledge — new staff members don’t know the meaning behind the intelligent numbers.
Hard to maintain — adding new product categories means you might have to rethink the whole data structure and add new, complicated logic.
Adding new products can be time-consuming, with a higher likelihood of manual entry and errors.

Intelligent numbering isn’t just a human problem, it’s a systems problem. Especially for consumer brands, once they start adding new product categories, additional information must be added to the product master data setup. The extra business logic that comes with this work adds another layer of complexity to something as simple as numbering products.

Trade smart numbers for a smarter system

We’ve discussed this in detail in some of our other blogs — there’s a better way!

Business applications today are built to handle multidimensional products without complex naming schemes. Data entities like dimensions, hierarchies, attributes, categories, and assortments can be used to create a new master data model for a company that is easy to maintain, without intelligent number schemes.

Legacy systems often lack this capability, so we understand why organizations struggle with intelligent product numbering.

Why you should ditch smart numbering in your product data management

Easier than intelligent numbering

Adding new products is quick and easy.

Users don’t have to remember extra information about meaning behind product numbers

They can use other dimensions in the ERP system for search and reporting.

No single point of failure (or bottlenecks)

Multiple users can work with products in the system, and they don’t have to ask someone what the numbers mean.

Easy to maintain

Has your brand expanded into dog beds, home furnishings, or hair products? No problem. Configuring new dimensions is easier and faster than rethinking your numbering schema for your entire product catalog.

Improve part or product lifecycle management

If product information changes, the number doesn’t have to.

Easier to merge new product catalogs

Product catalogs from different companies or acquisitions can be merged without losing information.

Ease of reporting

Advanced reporting like data mining, automated queries, and business analytics is easier to do with simple product IDs.

Other considerations for intelligent numbering and ERP systems

A new systems implementation is a complete paradigm shift for your business. Like we discuss in product attributes, an ERP project is an opportunity for you to cleanse your data and setup a new master data structure that works for you. Changing these data entities is a big deal and requires a solid change management strategy.

Virtual Warehouse

Warehouse data tells a story

Data tells a story about how a company runs its business. The warehouse table in particular — this core entity reveals so much about how a company manages its inventory. We’re fascinated by the creativity we see and how customers utilize their inventory data in so many ways.

A common setup: virtual warehouses

One way customers can manage inventory is by setting up virtual warehouses. This is when a warehouse that doesn’t exist in physical space is created in their inventory management system, and inventory is added. Virtual warehouses are a technique used to segment inventory. Think of it as “setting aside” a portion of your product for VIP customers or certain channels. Virtual warehouses aren’t necessarily a bad thing – if an important customer, region, or channel made an early commitment to your product, you definitely want to make sure that product is available to them. For single-channel brands or businesses with simple supply chains, virtual warehousing is a perfectly fine way to manage inventory, and a good business practice. But for omni-channel brands, or global organizations selling product in multiple countries, using virtual warehouses to segment inventory can cause problems.

How virtual warehouses cause problems in the supply chain

Problems start to happen when you set up dozens of virtual warehouses in the system to serve different channels, regions, and retail stores. Even though the warehouses are virtual, you still must deal with the same inventory management issues that crop up just like in a physical warehouse. There are overages and shortages. Demand fluctuates. Product that you “set aside” for your customers and channels changes, constantly, and now you must keep up with every warehouse you created. Different operational segments of the business may hide inventory from another, so they can ensure their fulfillment requests are met. It’s not uncommon for us to see a single warehouse storing product, yet the ERP system has four separate virtual locations. How can you fulfill orders from warehouses that don’t exist?

Fixes for virtual warehouses – that actually cause more problems

When businesses start to have these problems with virtual warehouses, they come up with a brilliant solution – virtual transfers! These cause their own sets of problems, though. When this happens, you’re moving too far away from the accurate, real-life understanding of your inventory. To fix this, companies ask their IT departments to write specific algorithms to automate these virtual transfers, which eats up more time and money. And all the while, the brand still must keep fulfilling orders and allocating product. What started out as a simple way to make every channel happy becomes a twisted nightmare of complex rules and business logic. There are also third-party solutions you can buy and implement to make virtual warehouse management easier. But at the end of the day, these solutions don’t fix the core problem: your virtual house inventory doesn’t match your physical inventory, and it’s hard for the business to make good decisions regarding fulfillment, allocation, and how to manage the supply chain.

The solution? Get rid of virtual warehouses

There is a solution for this virtual warehouse madness and prioritizing where inventory gets allocated. An intelligent soft allocation system can dramatically improve omni-channel inventory management. Soft allocation does this by pegging inventory to segments based on demand and supply from a single inventory point (aka a single warehouse). Instead of automating virtual transfers just to balance out inventory inaccuracies, soft allocation is configurable as demands change, with no complex rewriting or rules or algorithms. Users can prioritize inventory, while pulling from a single pool and maintaining global visibility across the entire system.

Frequently asked virtual warehouse questions

What's better, hard or soft allocation?

Soft allocation is the way to go. By keeping inventory transparent, you keep the supply chain moving quickly. Solutions can give you the flexibility to hard allocate once you’re ready to ship, but up until that point, you’ll want to be able to move orders around fast, without unnecessary data entry or manual processes.

If virtual warehouses are so problematic, is there still a case to use them?

We don’t consider virtual warehouses a best practice. For one thing, there is nothing fast about virtual warehouses. Once you start messing around with virtual transfers and virtual overages and shortages, you’ve moved too far away from reality, and your users are going to waste a lot of time trying to make your imaginary warehouse look right. At Sunrise, we advocate for having what’s in your system match your physical inventory, sticking as close to reality as possible.

Is this where negative inventory comes from?

Theoretically, yes, although it’s possible to put systems in place to prevent that. Even with extra business logic, though, solving one problem for virtual warehouses won’t fix everything that’s wrong with using them in the first place. Soft allocation prevents negative inventory from ever being an issue.

Why replace virtual warehouses with a soft allocation solution?

If your brand sells across multiple channels like retail, eCommerce, and wholesale, or they sell in multiple regions or countries, soft allocation is the way to go. The more complex an organization, the smarter it is to keep all the inventory in one big pool. It seems counterintuitive at first, but when done correctly, soft allocation ensures you can meet fulfillment demand and have an accurate, real-world view of your inventory across all your channels.

See how Dynamics 365 handles inventory management

Are you interested in learning more inventory best practices? Would you like to a see a modern, streamlined allocation solution that gives you both flexibility and accuracy? Contact Sunrise today!

Product attributes: best practices for product management in a new ERP deployment

So, you’re embarking on a new ERP implementation. It’s a new beginning, a chance to reevaluate, reorganize, and revitalize your business processes. And for consumer brands and retailers, product management is the most important piece of the ERP puzzle.

When starting a new ERP implementation, it’s absolutely critical that you think about how you’ll handle product attribution in your new system. For many companies, it’s a mistake to bring over the old product data structure.

Instead, take this as an opportunity to clean up messy, disorganized data and define a product hierarchy that frees your team from unnecessary and confusing product management.

Product attributes: the lifeblood of your brand

Product is the heart of a brand. Whether you sell jackets or handbags or table lamps (or all these things and more), you must define the type, colors, sizes, and many other dimensions for each product. A company’s product data structure is one of the most complex parts of an ERP system. Almost every area of your business will bring their own data and business logic to the product management party. It’s essential that you maintain clean and accurate data for your products to keep them moving through the system efficiently.

What are product attributes?

For those who don’t know: product attributes describe your brand’s, well, products. For those who are all too familiar: managing product attributes can be a pain, especially in a legacy system. Every time a brand debuts a new collection or starts selling a new category of goods, new attributes must be added to the ERP system.

What’s the best way to manage product attributes?

During a new ERP implementation, you have a rare opportunity to clean up your messy data and streamline your product management. Whatever data structure you decide on, you’ll have to live with for the next several years (or decades). Here’s the process we recommend for cleaning up your product hierarchy:

Step one: define your hard attributes

Hard attributes are characteristics that span your entire organization – examples are Brand, Gender, and Product Type. These are used by the business to sort and filter products. Hard attributes show up in the main forms and reports of a business. You will end up with a few of them.

Step two: define soft attributes

Soft attributes, on the other hand, are where you really slice and dice your product data. These are details that are specific to your product categories — think flammability for clothes, finish for furniture, material for handbags, etc.

Examples of hard attributes

Brand
Gender
Product type

…there will only be a few of these

Examples of soft attributes

Color
Finish
Flammability

…there will be a lot of these

The biggest mistake companies make in their product master data

We see this a lot with legacy systems: ALL the soft attributes, across every product category, are visible for every product. Business users then get confused — why is Finish showing up for a jacket? Why is Flammability listed in the Footwear section? Am I supposed to maintain the water-resistance attribute for my furnishings products? It gets confusing and messy, fast.

Product hierarchies: an opportunity to clean house

It’s usually not a company’s fault that their product masters get so jumbled. Legacy ERP systems don’t handle multiple product categories very well, and people develop customizations and workarounds to get the info they need. Plus, the retail and consumer brands landscape has changed so much – an apparel company that implemented an ERP system in 1999 couldn’t predict that someday, that same company would evolve into a lifestyle brand selling handbags, shoes, accessories, and home décor. Or that a company may acquire another brand that sells a completely different product, like furnishings, or cosmetics.

That’s where a modern, cloud-based ERP comes in: you need a system for handling many different categories, while minimizing confusion and extra work for product management. Adding a new product category should NOT require customizations to your ERP system.

ERP deployment considerations for product master data and attributes

The right ERP system can give you the correct product hierarchy to efficiently manage all your products. Microsoft Dynamics 365 makes it easy to define parent-child product relationships within categories. New soft attributes can be added quickly and attached to the relevant products in your hierarchy. Your users only see what they need to see, and their work is no longer crowded with irrelevant product data.

See how Dynamics 365 handles multidimensional inventory

Are you ready to simplify your product data structure? Want to learn more about how Dynamics 365 can efficiently manage your supply chain and revitalize your company? Get in touch with us today!

Sunrise 365 certified for fashion: TEC report highlights

Providing Enhanced Retail and Supply Chain Solutions for D365

We already knew Dynamics 365 and Sunrise 365^® is a killer combo for brands and retailers. But we wanted a second opinion. Technology Evaluation Centers (TEC), a leading independent ERP software analyst firm, evaluated our Sunrise 365^® Supply Chain and Retail Replenishment solutions and compared against their comprehensive model of ERP for Fashion and Retail. The verdict?

Sunrise 365 for Supply Chain and Retail Replenishment provides essential industry extensions for fashion and consumer goods brands. Here are the key highlights of TEC’s report if you are considering Sunrise 365 for Dynamics 365 and your business is in fashion, apparel, or footwear.

How Sunrise 365® works with Dynamics 365

Sunrise Technologies is the developer of application extensions for Microsoft Dynamics 365 for Finance and Operations (D365) that have been built to manage the unique needs of manufacturers, distributors, and retailers of apparel, footwear, textiles, home furnishings, and similar consumer products.

The Sunrise 365^® Supply Chain and Sunrise 365^® Retail Replenishment products bring enhanced capabilities to D365 that are especially important to these industries. These capabilities include fully integrating the product variations, multichannel management, and automated processing and control of complex allocation schemes across the entire Enterprise Resource Planning (ERP) application suite.

The Sunrise solutions extend the core Dynamics 365 application. Sunrise’s applications are seamlessly integrated into D365, so that users don’t have to know whether they are working in D365 or in the Sunrise applications.

Product extensions

Sunrise 365^® adds scale management, global trade item number (GTIN) reuse automation, season management, stock-keeping unit (SKU) lifecycle, and the product lifecycle management (PLM) integration framework to D365.

Scale management: supports dual sizing and NRF color and size codes, making it easier to manage products across multiple markets
GTIN: automation and reusability tools save time and money
Season management: tools to manage styles, colors, and delivery restrictions for seasons
Hard attributes: additional attributes like brand, category, and class allow for more specific sorting, filtering, and reporting
SKU lifecycle: item statuses allow for greater inventory control and specificity across the entire system
PLM integration framework: Sunrise’s framework greatly reduces the time and cost of integrating D365 with a PLM system

Sales extensions

The Sunrise 365^® Supply Chain extensions in sales include mark-for addresses, sales restrictions, sales cancellation log, sales order categories, sales order enhancements, bulk order management, and an automated order release. These extensions come with interactive, analytical dashboards that give users more insight into how products are flowing through the system.

Ship-to and mark-for addresses: allow orders to be earmarked for specific store
Sales restrictions: thresholds that restrict when an order can be released for shipment.
Sales cancellations: allow users to know more about why an order was cancelled.
Bulk order management: tracks orders and compares against a blanket or master order for all products over the course of a year or season.

Supply chain: where it all comes together

The supply chain extensions are where everything comes together. The tools in this area include support for forecasting, forecast netting, soft allocation, and supply chain analysis. Forecasts can be built that clearly define demand channels (e.g., web, wholesale, or retail). A planning workbench is not only a part of this extension but also a forecast integration framework for those who wish to work with other tools. Supply chain analysis adds other insights to business challenges such as channel rebalancing, scarce goods allocation, projected excess product inventory, unmet product demand, product supply suggestions, and product inventory projections.

One of the most impactful capabilities in Sunrise 365^® Supply Chain is the ability to manage what Sunrise calls “soft allocation” on inventory. Soft allocations let a user determine how to flexibly balance demand sequences to supply sequences and ensure that the demand will be appropriately supplied.

This is different from the “hard” allocation process, which occurs natively within Dynamics 365 and is not as flexible at meeting the more fluid requirements of Sunrise’s customers.

Sunrise 365® Retail Replenishment

Retailers need to stock the right products in the right stores at the right time. Sunrise 365^® Retail Replenishment is a relatively new product created by Sunrise to meet the demand of its customers, who were coming to them and asking whether they could help them manage retail replenishment without the steep prices associated with a third-party solution. Most of the solutions on the market are very expensive on their own. On top of the software costs, the costs to integrate these solutions with D365 are very steep.

The Sunrise retail replenishment tool brings together the retail store replenishment settings and rules and the actual inventory levels from the POS locations, and then it produces the appropriate retail plans.

In conclusion...

Sunrise 365^® brings great value, lowers the overall cost of ERP purchase and implementation, and brings faster deployment to its customers because of its tools and experience in these industries. Marquee customers such as Fila, Bioworld, and others rely on Sunrise to run their business. Anyone looking to purchase or upgrade their ERP system for these fluid consumer industries owes it to themselves to see what Sunrise can deliver for them.

Access the Fashion & Apparel Certification Report

Ready to take a deep dive into Sunrise 365? TEC’s full report shows you how Sunrise 365 stacks up against their comprehensive model for apparel and fashion ERP. If you want all the nitty-gritty details, check out the full report from TEC!

PLM integration

As a Senior Technical Architect and Project Manager with Sunrise, Mason Whitaker works closely with consumer brands and retailers organizations to ensure smooth Dynamics 365 implementations. Mason has experience working with global organizations in several industries, from e-commerce based mountain bike retail to high-end textiles and fashion.

The Need for Both Systems

Consumer brands and discrete manufacturers often need both PLM (Product Lifecycle Management) and ERP (Enterprise Resource Planning) software.

Since these consumer goods companies are designing and sourcing or manufacturing products, they require both solutions to handle their business operations.

And when shopping for a new ERP system, some companies hope to find them combined together in a single, all-in-one solution…but should you?

Here’s what we are going to dive into:

PLM vs ERP | Combining PLM and ERP | Boundaries between ERP and PLM | PLM and ERP Frequently Asked Questions | PLM Integration Framework

PLM vs ERP

Let’s start with a few definitions.

PLM: Flexible software that is used to manage the design process, configure and track design milestones, and facilitate team collaboration to plan and design new products to introduce to market.
ERP: Fully integrated financial and supply chain systems which handle high volumes of transactional, structured data, supporting the day-to-day business processes of sourcing and selling those products once introduced to market.

In the real world, the systems must pass product information back and forth…which can be done as an integration between two standalone systems or by adding PLM functionality to an ERP.

And while it is attractive to combine the two systems into a single solution, with a joint backend database, our recommendation may surprise you.

Should PLM and ERP be combined?

By trying to combine the two worlds into one product, companies often see a loss of features in either the PLM or the ERP. Attempts to combine the flexibility of PLM with the structure of ERP often fail — sacrificing unique characteristics of each that made them work in the hopes of finding a single solution.

Therefore, we recommend keeping PLM and ERP separate as a best practice.. In terms of application architecture, these two software solutions are complete opposites.

By allowing the two systems to operate separately from each other, both can function at their best to deliver the results you wanted from your investment in the first place. Product data for design, and product data for manufacture and sales transaction are very different.

The real need is for appropriate integration points so the two separate applications can pass product information back and forth, like attributes, variants, etc.

Where do you draw the boundaries between ERP and PLM?

Here are four general rules of thumb as you consider your product offerings across all channels and global regions.

Not all products need to live in the PLM. Only the ones that your consumer goods company designs in house need to start their product lifecycle in the PLM. The products that are designed by third parties can skip the PLM cycle and be entered straight into the ERP.
You must determine which system will provide the master for each product, and it should always be the master system going forward. This will help you avoid conflicts and duplications — which is critically important to avoid dual-sided, complex integrations.
Planning an interface between ERP and PLM needs to take into account more than just the product data. For example, you need to first plan the foundation for how product data will flow across the applications without friction, including reference data for units of measure, seasons, currencies, and vendors.
And finally, in addition to reference data and product data, more complex data integrations need to consider the flow of data for BOMs, POs, routes, etc.

If this sounds like a lot to consider when planning your PLM and ERP integration, or if you’re considering Microsoft Dynamics 365 for your ERP, then good news! We’ve already created a framework for you.

Frequently asked PLM and ERP questions

Where do we create a new style with multiple colors for our brand?

Create it in your PLM and push that product data to your ERP.

What happens when we need to change a color offering later?

If you are going to drop a color, extend a color across seasons, or introduce a new color, you should make those changes in your PLM first and then push the data to your ERP.

Should all product data be maintained in one system?

No, these rules of thumb don’t necessarily require that all product data like assortments, hierarchies, attributes, etc., need to be maintained in one system.

Does eCommerce product attribution need to be maintained in the PLM?

No, as a similar case to above. An intelligent integration design will keep a single system as the master application, while letting other third-party systems append additional data elements, such as attributes, as needed.

PLM Integration Framework for Microsoft Dynamics 365

Because thinking through intelligent PLM integration frameworks is complicated…and because we’ve done it a lot, we include this as part of our industry solution, so you don’t have to start from scratch.

In fact, most of our customers require a best-of-breed PLM system to manage the design of new products, and that’s why we include a PLM integration framework as part of our Sunrise 365^® Supply Chain extension for Microsoft Dynamics 365. It has everything you might need to configure, manage, and process the integration with your preferred PLM software – and has been built to be customized and extended to meet the needs of any implementation.

It utilizes a set of message entities to send and receive data to and from any third-party PLM system of your choice. The integration framework includes a set of out of the box entities for reference and product master data, and the solution can also be extended by creating additional entities or extending existing entities for your unique requirements (for example, add message entities for Bills of Materials).

In case you weren’t familiar, our supply chain solution extends Microsoft Dynamics 365 for Finance and Operations with a ton of advanced functionality that any consumer brand, apparel, footwear, or fashion company would need to make it a perfect fit. The PLM Integration framework is just one tiny piece of it, but you should also note, it also includes integration frameworks for your 3PLs and eCommerce platform too!

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7 factors for success: Everything you need for a successful ERP implementation

Your guide for accelerating your cloud ERP deployment

People often ask us what they can do to ensure a successful ERP implementation. The thing is, ERP implementation strategies and best practices have evolved since the introduction of cloud ERP. To achieve a successful go-live, it’s important to refine and evolve your methodology as industries change. In this blog, we’re sharing some of our secrets for how to pull off a successful ERP implementation.

Over the last 30 years (and 300+ implementations), we’ve encountered every roadblock you can think of. So, we started to wonder: how can we counter those roadblocks? Is there a way to keep everyone on track and accountable while providing quantifiable metrics for a project’s progress? The answer is yes! We built a tool—Sunrise Quick Start 365^®—to help smooth the path and ensure implementation success.

You already know that successful ERP implementations don’t just happen. It takes hard work from a lot of dedicated people to get a new system up and running. You might have noticed that we haven’t mentioned software yet. That’s because we understand ERP projects aren’t just about implementing software, they’re about people, and how those people embrace or reject a company’s new ERP system can be the difference between success and failure.

There are several ways to approach the implementation of a new ERP system like Microsoft Dynamics 365, and some approaches work better than others. At Sunrise Technologies, we’ve implemented hundreds of ERP solutions powered by Microsoft for our customers in the apparel, footwear, home furnishings, retail, and manufacturing industries. Along the way, we discovered certain methods and best practices for implementing ERP in these industries. If you’re looking for a guide to making your ERP implementation as painless as possible, you’ve come to the right place.

Based on 30 years of experience, we’ve identified seven critical success factors that influence the outcome of a project:

Executive support

It’s vital that your executive team is on board with your ERP project. We know from experience that projects succeed when everyone is working from a single set of facts, which is why Quick Start data resides in a single database, giving both Sunrise and customers an identical view of a project’s status. Power BI dashboards with almost real-time updates give everyone a bird’s-eye view of the implementation and keep people on the same page. Embedding Power BI into Quick Start has been the biggest game-changer since we launched the tool in 2013. Users have a quantitative view of how a project is progressing, and project managers can spot bottlenecks quickly.

Employee involvement

Your ERP implementation team should be composed of the best employees from across your organization. These are your rock stars, the people who know your current processes inside and out. These internal resources should exhibit the ability to understand the overall needs of the company and be entrusted with critical decision-making responsibility and authority.

Quick Start comes with a library of top-notch workflow processes for your industry which helps take care of the repetitive work so consultants can get down to business. Our methodology combines agile and waterfall methodologies, and sprint-based work so our consultants shadow, interview, design, and leave behind a beautiful set of processes and documents.

Clearly defined project scope

Having a well-defined and written scope of work can mean the difference between a failed project with disastrous results and a highly successful project with huge benefits. Your project scope is the basis for the requirements of the project and the resources that need to be deployed. Don’t skimp on scoping. It pays to spend the time upfront making sure EVERYTHING is documented; plus defining clear expectations and establishing overall goals.

Quick Start is more than a task manager. Our dashboards provide a fact-based, quantitative view of your project’s status. Track progress, see how far you’ve come, compare against budget, and see what’s left to do. Implementations, at their heart, are just thousands of tasks (okay, maybe tens of thousands of tasks. To some of you, it probably feels like hundreds of thousands of tasks.) The idea is simple: have a single location where ALL the project tasks are tracked and make it visible to both the client and project teams.

Plan to optimize business processes

One of the most expensive aspects of an implementation is customization. We’ve heard horror stories of thousands of hours sunken into customizing an ERP system that, in the end, still didn’t work for the customer.

Quick Start saves valuable implementation time by providing standardized processes for the repetitive stuff we encounter in every implementation, and a set of best practices:

Datasets pre-configured for apparel, footwear, CPG, and retail companies
Abstract process flow guides aligned with best industry practices
Visibility into timeline and budgets
Tools to facilitate easier instance copying for testing, validation, and migration

We also gave the tool a makeover – now with a modern and simple UI, Quick Start stores everything in the cloud, so users can view a project’s status anywhere, anytime.

Proactive change management

ERP implementations change the way people do their jobs, and no one likes change. It’s important to build in enough time to train people on new systems and processes. After all, you bought a new ERP system to make work easier! Don’t let end users feel like they just swapped an old, clunky headache for a newer, shinier headache.

To make end user training successful, training should start early, preferably before the implementation begins, especially for skills that will help users better implement and utilize the solution. Executives often underestimate the level of education and training necessary to implement an ERP system as well as the associated costs. Top management must be fully committed to incorporating the training cost as part of the ERP budget.

For a successful implementation, you need structured project management, full transparency, and buy-in from users at every level of the organization. We created Sunrise 365^® Quick Start to streamline Dynamics 365 projects, by combining methodology, best practices, and quantifiable progress metrics into a single solution. You can get to go-live faster and experience your company’s digital transformation sooner.

Project management tools

Why would we build a specific tool for ERP project management, when we could pull one off the shelf? Because ERP implementations fail for so many reasons: miscommunications, mismatched expectations, an inability to spot problems before they snowball…the list goes on and on. We set out to create a system that minimizes risk and gives everyone a task-oriented, fact-based view of the implementation in real time. Quick Start is tailored to Sunrise’s sprint-driven methodology. We cover this in much more detail in our methodology blog post, but the bottom line is that it works. By leveraging the knowledge we’ve gained from 30 years of experience and over 300 go-lives, Quick Start provides a structured path to success.

A partner that knows your industry

ERP deployments, especially for consumer brand companies, have many moving parts that impact every aspect of an organization. To help monitor and guide your project’s success, we recommend working with a partner who knows your industry as well as they know the software.

Since the original release, we’ve reconfigured the solution to optimize it for Dynamics 365 implementations. Every feature of Quick Start has been included because we encountered it in real ERP projects. We built this tool from the ground up, and we continue to refine and update Quick Start as our industries change, Microsoft’s software roadmap changes, and new customers go live.

Quick Start: our secret sauce for successful implementations

In 2013 we debuted Quick Start, our Dynamics 365 implementation and project management tool. Since then, Quick Start has become indispensable to our customers and consultants alike. What began as a set of best practices, tips, mappings, datasets, and checklists has evolved into a full-blown, cloud-based project management application, specifically designed for Dynamics 365 implementations. Our customers love Quick Start so much, we wanted to share an updated overview of how Quick Start helps clients save time and money during implementations.

Quick Start saves time and money by packaging our Sunrise implementation methodology with a project management application and embedded Power BI dashboards to track progress. Originally developed for Microsoft Dynamics AX 2012 R3, today Quick Start is built specifically for Dynamics 365 and runs on Microsoft Azure. Power Platform tools like Flow pull data from a single database and Power BI dashboards show project status at a glance.

How to have it all: a blueprint for a successful ERP deployment

There is a solution – we’ve designed Quick Start to ensure your Dynamics 365 implementation is a success. Quick Start is the ultimate blueprint for following the best practices in this blog. And Quick Start is included FREE with every implementation when you partner with Sunrise Technologies.

Ready to See More?

Schedule a personal demo and we’ll show you the ins and outs…the secret sauce…that helps us take clients live on Dynamics 365. You’ll see how Power BI helps monitor project progress, and get the inside scoop on our successful project methodology.

ERP implementation cost calculator

A lot has changed in the few years since cloud computing has become the norm. Very often, we talk to people who are thinking about moving to the cloud, or a new ERP project, but they just can’t wrap their heads around the cost and potential for business disruption. And that’s understandable – an ERP project is a huge undertaking.

But what we wish more people would consider is that the costs of maintaining legacy systems or using outdated business processes is often much higher than an ERP implementation. It’s just tougher to spot these costs. They’re usually so embedded in a company’s way of doing things, that they show up as lost time, lost productivity, and frustrating processes due to outdated technology.

You know your business – but have you quantified all the ways doing nothing is costing your business?

Why Do Organizations Delay Digital Transformation?

Some decision-makers delay digital transformation or spend too much time weighing the pros and cons of cloud computing, thinking their current systems can last for a few more years. But what people may not realize is that the cost of doing nothing – and staying on legacy or on-premise systems – is much riskier in our new world of cloud-based business applications. You could be exposing your business to losses in revenue, security flaws, and system failures.

It may seem like doing nothing is the safest option, but that way of thinking is counterproductive in this new reality of cloud-based infrastructure. Moving to the cloud (and using a cloud-based ERP system) means a company can quickly modify their business models or processes to adapt to changing conditions in their industry. More and more businesses are pursuing growth through acquisition, and folding in newly acquired companies to ancient accounting and supply chain systems can end up costing millions of dollars.

We’re living through a cloud computing renaissance, and companies that don’t adapt are failing. For retail, apparel and fashion companies, the landscape is littered with organizations that have gone out of business, been acquired, or are shadows of their former selves.

All too often, these businesses failed because they couldn’t adapt their business models to serve their customers. And their IT and supply chain systems play a huge role in those failures. Outdated, on-premise, expensive systems that take years of time and millions of dollars to reconfigure to match the new reality – and then the reality changes again. Instead, you could be using a system that is always modern and updated, and ready for whatever twists and turns your industry takes.

Have you thought about the following issues, and considered whether your aging systems are partly to blame?

Losing customers | Losing time | Losing staff | Losing visibility | Losing security

Let’s dig into those 5 areas of your business where the costs of doing nothing might be much higher than you think.

1. Losing customers

If you’re a consumer brand, and you make it hard for consumers to buy your products, they will drop you like a hot potato.

According to Microsoft’s Global State of the Customer report, 66% of US consumers polled ranked customer service as “very important” in their choice of a brand and brand loyalty. But since we know legacy systems don’t easily communicate with CRM and other customer service applications, companies using outdated systems often run into problems.

Everything – from your e-commerce platform to your POS system to your customer service center, right down to your fulfillment center – should create a seamless experience for your customers to buy, exchange, and return products. Look at these warning signs of degrading customer service:

• Complaints about promotional pricing issues

• Complaints about the shopping experience, whether it’s in the store, online, or over the phone

• Delivery issues and shipping delays

• Increase in returns and chargebacks

• Increase in shipping costs

• Purchase histories are spread out across multiple databases

• Your customer service reps’ response time is slowing down; they use multiple systems to answer customer questions.

• Your systems are holding you back from testing new channels like pop-up stores, tradeshows, or wholesale orders online – it’s a huge project just figuring out how you’re going to make those orders work in your system

If you think of every bullet point as an opportunity for lost sales…well, that’s a lot of lost sales.

2. Losing Time

Cliché but true: time is the most valuable resource. And if you are constantly dealing with workarounds and fixes for your outdated ERP system, that’s time you could have spent on revenue-generating projects. On an intellectual level, you know this. In day-to-day operations, though, it’s difficult to quantify lost time. But if your organization is guilty of the following, you’ve got problems:

• Your team members spend more than half the month trying to close out the previous month

• People must ask for reports days or weeks in advance (because it takes days or weeks to create reports)

• People worry about the accuracy of the data they receive, so they hesitate to make decisions

• People are frustrated with the current system, and they come up with their own lengthy workarounds and processes just to avoid using it

• IT is tasked with finding solutions, but not enough budget, and end up buying the equivalent of a box of Band-Aids

Forrester’s Total Economic Impact study for Microsoft Dynamics 365 found that companies who implemented D365 improved operations efficiency by $39 million. When you add in automation, better user experience, reduced rework, and enhanced forecasting, employee productivity increased by $20.6 million.

Look, you can tell yourself it’s fine, or it’s not that bad. But you’re falling behind your competitors. The hours you spend maintaining legacy systems and hardware are hours you could have spent growing the business. Ask your team what projects they would pursue if they didn’t have to maintain whatever dinosaur of a system is back there. How much money are you losing because your employees aren’t innovating, they’re stagnating? Which brings us to….

3. Losing Staff

One of our customers had an interesting problem – their legacy ERP system was still chugging along, but it was getting harder to find IT staff to manage it!

Their system had been around since the early 90s, and several employees were getting ready to retire. All the young, smart IT professionals that this company wanted to hire either had no experience with this green-screen behemoth, or they weren’t interested in working for an organization where their skills would go towards maintaining a dying system.

If your best employees are being lured away to work on new and exciting technology projects, or at the very least, work someplace with technology that isn’t older than they are, it’s way past time for you to think about your long-term strategy. No one wants to jump on a sinking ship.

Not to mention, it’s getting harder for technology vendors to survive. Smaller software vendors are getting gobbled up and on-premise systems are being sunset.

4. Losing Visibility

You can’t trim costs, correct issues, or grow revenue, without control and visibility. But the biggest problem with legacy infrastructure is an inability to control the weakest links of the supply chain. Ask yourself:

• Are inventory and supply chain movements disconnected from the financials, making it impossible to get a real-time view of the business?

• Is one channel hoarding inventory from another channel, leaving excess inventory in one area and shortages in another?

• Do you have trouble completing orders on time and are you unable to provide available-to-promise estimates?

• Are your POS, CRM, and ERP systems already in the cloud, but different clouds with separate vendors and billing cycles that is costing you way more than if they were consolidated on a single platform?

• Do you lack real-time information to make the best decisions quickly because data is locked in silos?

5. Losing Peace of Mind (Because of Security Risks)

Security risks are frightening. And while it’s true that any business can fall victim to a cyberattack, some setups are more vulnerable than others. Think about what would happen to your brand’s reputation if your company was hacked. Can you quantify (or do you even want to think about) the total dollar amount of lost sales from a security incident? Think of each of these points as a crack in your IT’s foundation, exposing you to cybersecurity risks:

• How much time, effort, and money does it take to maintain your current infrastructure, custom code, and integrations?

• Have you cobbled together a bunch of third-party products to make your processes flow the way you want and have trouble reporting and keeping the system up to date?

• How much capital and resources are sunk into maintaining hardware?

The Hidden Costs of Maintaining the Status Quo

Some people think the cost of doing nothing is…free.

Frankly, those people are wrong.

The money you think you’re saving by putting off an ERP or digital transformation project could be slipping away. If your supply chain and underlying technology infrastructure can’t adapt to meet your company’s growth initiatives or customer demand, then your company’s survival in this new, cloud- centric world is at risk. We won’t dive deep into all the advantages of the cloud here. There’s simply too many for this blog post, and that’s why we wrote this cloud eBook.

Ready to See More?

The new landscape of business applications is exciting. It’s possible to get the cloud ERP system of your dreams at a tremendous value, with the industry-specific extensions you need, and without expensive customizations.

If you’ve realized it’s too costly to wait any longer on updating your systems, let’s schedule a digital transformation workshop.

Soft and hard allocation: understanding the difference

If hard allocation is the hammer and nails of supply chain, soft allocation is like magnets and a whiteboard.

Defining soft and hard allocation

Key differences between hard and soft allocation

Soft allocation

Hard allocation

Challenges in the planning process

How soft allocation helps you manage your supply chain

Further Reading

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Don't be afraid of continuous updates

The new ERP update model

Prioritize the most essential business functions

Focus on testing customizations and extensions

How to handle integration testing

For inbound messages: have a set of sample data prepped before you start

In your test environment: push the sample data through the system (with the new updates) and see what happens.

For outbound messages: export your data in XML format and use file comparison tools to see if anything changed from the new updates.

Use automation to keep up with updates

Checklist for testing ERP updates

Further Reading

See how Dynamics 365 handles inventory management

Remove season codes from style numbers for better inventory management

The importance of seasonal products for brands

Optimize inventory with season codes

Embedded season codes in style numbers cause problems

Problem 1: If you decide to sell across seasons, you need to create new style numbers for the same product

Problem 2: Carried-over styles need new color and size product variants

Problem 3: You must complete inventory transfers for the new SKUs.

Last season doesn’t really mean last season (for styles)

When the product was designed?

When the product was manufactured?

The selling season for the product?

A better way to manage seasonal inventory

Further Reading

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What should your product numbers mean?

Intelligent product numbers

Why smart numbering is no longer a best practice

Trade smart numbers for a smarter system

Why you should ditch smart numbering in your product data management

Other considerations for intelligent numbering and ERP systems

Virtual Warehouses Best Practices

Warehouse data tells a story

A common setup: virtual warehouses

How virtual warehouses cause problems in the supply chain

Fixes for virtual warehouses – that actually cause more problems

The solution? Get rid of virtual warehouses

Frequently asked virtual warehouse questions

Further Reading

See how Dynamics 365 handles inventory management

Product Attributes a Mess in Your Old ERP?

Product attributes: the lifeblood of your brand

What are product attributes?

What’s the best way to manage product attributes?

Step one: define your hard attributes

Step two: define soft attributes

Examples of hard attributes

Examples of soft attributes

The biggest mistake companies make in their product master data

Product hierarchies: an opportunity to clean house

ERP deployment considerations for product master data and attributes

Further Reading

See how Dynamics 365 handles multidimensional inventory

Fashion Extension Certified for Microsoft Dynamics 365

Providing Enhanced Retail and Supply Chain Solutions for D365

How Sunrise 365® works with Dynamics 365

Product extensions

Sales extensions

Supply chain: where it all comes together

Sunrise 365® Retail Replenishment

In conclusion...

Access the Fashion & Apparel Certification Report

PLM Vs ERP

The Need for Both Systems

PLM vs ERP

Should PLM and ERP be combined?

Where do you draw the boundaries between ERP and PLM?

Frequently asked PLM and ERP questions

PLM Integration Framework for Microsoft Dynamics 365

What should
your product numbers mean?