APICS logoWe reprised APICS writer David Turbide’s comments regarding the evolution of ERP from his recent APICS Magazine article in our first of this two-post series here.  Today we’ll see what he and APICS have to say about today’s systems and choices.

Turbide notes that topping the list of tools modern ERP suppliers now include in their product suites is enhanced analytics capability.  Dashboard indicators, business intelligence (BI) tools and deep drill-downs are becoming the norm today.  This encourages executives to have more interaction with their systems personally than in years past.  Data analysis tools – often involving Microsoft Excel at some point – are being enhanced with more powerful data visualization capabilities, a trend expected only to evolve further.  It makes decision makers more connected to the pulse of their organizations.

User interfaces (UIs) are likewise evolving.  We see this today in things like Microsoft Dynamics’ recent innovations in the area of the role-tailored client, which lets users focus only on what’s important to them, instead of seeing screens cluttered with other (and often irrelevant) menu options.  For a long time systems increasingly came to look like Microsoft Windows and in particular Office tools like Excel.  That’s still true, but it’s equally true now that they are starting to look more like websites.  Both design approaches serve the greater functionality of the user, with both built in to today’s UIs.

That UI is now moving into mobile as well.  (Here too, Microsoft recently announced availability for its Dynamics NAV product on tablets including iPad and Android devices, moving beyond pure Windows devices.)

And best of all, users will say, is the ability to search within an enterprise system for just about any piece of information they need, from just about any functional area or module.  Once again, UIs are delivering greater value to the user.

Turbide goes on to point out how today’s systems have evolved from a dozen or so modules to as many as 50 or 100 “apps” that can be stacked like blocks to form a tailored ERP solution for specific industries.  These (often third-party) adds-ins serve to further extend the functionality of today’s ERP offerings.  Meanwhile, the lines between ERP, supply chain and manufacturing execution systems (MES) are becoming fuzzy and less meaningful.  Overlaps occur between scheduling and quality as ERP encroaches into the MES domain by offering direct connection to machines and sensors.  Similarly, ERP has been gradually improving in other areas outside its traditional domain, like demand-planning ability, distribution and warehouse management bundled functionality.

In short, ERP continues to evolve, grow and spread its influence into more and more areas of the enterprise, encompassing an ever-greater share of the firm’s database of business intelligence.  That trend will only continue.  The benefit is that today’s buyer has greater choice in the tools and solutions available to them for managing the enterprise than ever before.  As Turbide concludes, “Today’s ERP is far and away more functional, flexible and capable than ever before.”  But if you look closely, you can still see the long heritage of providing the tools and automation that manufacturers need to run their business.  ERP evolves to keep pace with the changes in manufacturing that today’s global business demands.  Plus, as the article notes, there will always be the upstarts stoking the competitive fires as well.  All this bodes well for the continued innovation, integration and growth of business management and planning systems for the growing manufacturer.  And in so doing, will advance the entire industry.



david turbideIn the current issue of APICS Magazine (Sep/Oct 2014) consultant and writer Dave Turbide (also an APICS state chapter president and CPIM master instructor, and pictured at left) has penned a few thoughts worth repeating on the evolution of ERP systems, their heritage and some of the challenges they face today.  We’ll devote our last two posts this month to Dave’s thoughts.

As Turbide points out, ERP planning is not what it was ten years ago, or even two years ago.  In fact, it’s merely “the current incarnation of a long line of offerings that date back to inventory management and bill of material software programs” first developed over 50 years ago.  Material requirements planning (MRP) begat manufacturing resource planning, eventually evolving into today’s Enterprise (ERP) systems.

Companies that adopted these systems in the 70s and 80s still use them today in many cases, but utilize new versions with added functionality and modules added along the way.  Occasionally, a major update occurs which can run from full code rewrites to new data tools, interfaces and connectivity options.  Today, new deployment methods are evolving, like cloud and proliferation of the new mobile technologies.

Software is typically released with enough functionality to distinguish it from competitive offerings, notes Turbide.  Eventually, the “feature-function rivalries” begin.  This quest to stay ahead is always good news for users, as ERP gets broader and deeper.

Meanwhile, the history of the ERP market itself is one of acquisitions.  Startups emerge and eventually get consumed by larger companies.   (Our own reselling firm has seen this in dramatic sweeps – only one product we sell today (out of four) is conveyed by its original publisher; large publishers like Infor, Sage and Microsoft predominate in the SMB space today, proffering products invented long ago, by others.)  Sometimes products are combined; sometimes features are borrowed; sometimes a “super ERP” becomes a logical upgrade path from many or all of the acquired products.  In the end, this evolution has led ERP to become the “preferred information management backbone for companies worldwide,” Turbide points out.

The article notes the adoption of software-as-a-service or cloud computing as yet another stage in ERP evolution, whereby technology resources like computers and servers are outsourced, since these aren’t typically within a manufacturer’s core competency.  The licensing method reduces up-front capital costs and the hardware can be scaled quickly to user requirements.

However, manufacturing as a whole has been reluctant to adopt cloud services.  That’s because many manufacturers already have IT infrastructure in place, and the “unwillingness among risk-averse executives” to trust the firm’s vital information to “a remote custodian and long-distance telecommunications link.”  Thus, Turbide notes that only about one-fourth of companies looking at a system purchase opt for that approach.

In our next post, we’ll take a look at what APICS’s Dave Turbide has to say about tools, technology and building a system.  Stay tuned…

OLYMPUS DIGITAL CAMERAAn excellent article in the Sep/Oct 2014 issue of APICS Magazine points out how companies using a “purchased-parts supermarket” for master inventory control (often known in the field as kanban) can help cut overall safety stock nearly in half.  This can translate into a considerable inventory cost savings.  In this article, we’ll try to present the article’s key points as simply as possible (still, it gets a bit geeky).  For the full rendering you have to go straight to the source (APICS), which requires APICS membership (a most worthwhile investment, we might add).

In the article, entitled “Portion Control” by Chris Harris (an Assoc. Prof. of Supply Chain Mgmt. at the Univ. of Indianapolis School of Business, pictured at left) and Thomas Parker, the authors remind us that “controlling the quantity and availability of inventory within a production system is one of the greatest challenges faced by supply chain and operations professionals.”  They go on to point out that a centralized storage location for manufacturing components (the ‘supermarket’) is effective in releasing material to the production area in just in time fashion, minimizing production floor space for raw materials without jeopardizing manufacturing.

The idea is to set a maximum inventory level for each component, and then effectively communicate via an “informational loop” when material should be withdrawn and replenished.  These max levels are based on things like frequency of supplier deliveries, component use and safety stock required to avoid outages.  One of the “information loops” regulates the flow of material from supplier to your market, while the other controls material flow from your market to the floor – thus, kanban.  The pull signals must be right-sized to ensure adequate quantities of material and components are available to the floor.

The key, note the article’s authors, is to determine the number of supplier-to-market pull (or kanban) signals.  So, here’s where it gets geeky, although the formula is really pretty simple:

No. of Signals = ADU x (PTR + TT + RP + PPB) divided by PQ


ADU = average daily use

PTR = partner’s time to replenish

TT = transit time

RP = reorder period

PPB = purchased parts buffer

PQ = pull quantity

As the article states: “The equation allows a manufacturer to determine the size of the pull loop between the purchased-parts supermarket and the suppler.”  For example: with an average daily use of 200, partner’s time to replenish of 1, transit time of 1, reorder period of 1, purchased-parts buffer of 1 and pull quantity of 200, the result is a need for 4 pull signals per component:

200 x (1 + 1 + 1 + 1)

                200                         =  4 Signals

Thus, on an average day, this production environment would experience one pull signal at the supplier, one in transit, one in the purchased-parts supermarket, and one from production control.  These signals move regularly between the supplier and the customer to ensure that the purchased-parts supermarket is stocked with the appropriate level of inventory.

Our space is too limited here to parse out the remaining details, but the article ultimately describes the idea of ‘risk pooling’ across various locations, and how firms can reduce safety stock with this methodology by up to 46% compared to traditional methods.

To learn more about this and many more ideas for improving inventory control, look into APICS here for yourself or your team.  Every manufacturing company would benefit from their knowledge.  To see the full text of this article and a library of this and other APICS articles from current and past issues, become a member, then start here.



The Forklift Upgrade?

forkliftAn interesting article by Andy Kessler, author and former hedge fund manager, published October 7th in the Wall Street Journal suggests that we may be in line for a big uptick in business productivity soon.  It will be the result of what he terms a Forklift Upgrade in modern business computing.

In his article, Kessler posits that we are now embarking on the fourth major era of computing.  He counts mainframes of course as the first, which “automated back offices and transactions, bringing efficiencies and lower costs.”

The second era was marked by the desktop era of the 1980s and, in particular, the 90s.  Essentially, a lower cost option to do many of the same tasks mainframes did (with, we might add, the added benefit of vastly enhanced personal productivity gains: think spreadsheets).  The third era was the Internet era, with the web allowing us to buy goods and services “through the magical Internet.”

Now we’re moving into the mobile era, or stage four.  There are now more mobile users out there than desktop users, including nearly two billion people using the web on their phones.  It’s a computer in your pocket, always there when you need it.

In the business world, companies are rethinking their entire infrastructures.  We see it all around us.  Microsoft recently at its Microsoft Dynamics NAV “Directions” conference touted – heavily – its new catchphrase “Mobile first.  Cloud first.”  Companies are moving some functions already to the cloud.  Mobile is everywhere (including ERP solutions now bringing their supply chain capabilities to pads and phones).  Companies running on infrastructure built in the 80s, 90s and 00s, are now “figuring out that they need a mobile and cloud platform to save money and offer a better service.”

This is where the “forklift upgrade” phrase comes into play, according to Kessler: “Companies lift and remove the existing system and drop the new in place.”

As the author points out, this takes much planning.  In our own dealings with clients, we’re finding that process analysis, process reengineering, education and workflow improvements – all ultimately aimed at leaning the firm out – are at the foundation of all this change.  The challenge then becomes to find appropriate systems, software, technology and new processes to supplant the old, reduce the redundancies and the separate silos of information — in turn making companies more competitive and able to offer goods “better, cheaper, faster.”

Kessler points out that while these well-thought-out changes have resulted in a temporary lull in in capital spending, that’s about to change.  These changes are difficult, expensive and “too important to mess up.”  The technology must be made to fit the business purpose (always!).

But as it does occur (and it will and, in many cases, already is…), companies will start growing faster “as lower costs work their way through the enterprise.”  As profits increase, companies reinvest.  They use their cheaper technology to hire and gain market share.  And the cycle feeds on itself.

Given the (several trillion dollar) size and scope of the tech changes rising today, in the transition to a mobile and often cloud-based world, the global economy will head right there in stride.

avalara_picIf you sell or have nexus in multiple states, then you know how complex filing taxes and maintaining exemption certificates has become, and this post if for you.  Our friends at Avalara, the online sales tax experts, have produced a white paper in which they outline five key things a business should do to ensure they are in compliance with all the various state requirements for exemption certificates.  Here are a few of the things that most commonly go awry:

» Missing a signature or does not include a signature of an accepted signer

» Missing an issue date

» Incorrect claim type or any certificate not accepted

» Document not recognized by the state authority

» Includes name or address other than the direct buyer and seller

» Showing State ID applicable to the wrong state

Avalara lists five “survival tactics” for increasing efficiency, avoiding waste and lowering the risk of the all too common audit fines and penalties (and if you’ve been through an audit, you know what they’re talking about):

Survival Tactic #1 —Understand the nature of the exemption – Sales can be exempt for many reasons based on the nature of the use, the goods or services, or the buyer.  The more products sold, the more risk and difficulty.  To dos include:

» Create systems to track changing rules regarding the tax-exempt nature of each transaction.

» Track sales tax holidays, product and service related exemptions, and exemptions based on use.

Survival tactic #2 —Determine validity of exemption certificates.  Which form?  What jurisdiction?  What needs to be on the form?  To dos:

» Review exemption certificates submitted and ensure they contain key elements including type of exemption, names & addresses, descriptions of goods, tax number, signature.

» If the state you’re dealing with is one of the 23 SST (Streamlined Sales Tax initiative) states, use the recommended forms.

Survival tactic #3—Know the rules.  Tracking tax-exempt transactions based on use, tax holidays, and source of the transaction requires super human strength and agility.  To dos:

» The Sales Tax Institute publishes a list of sales tax holidays by state.

» Know whether to collect a resale or exemption certificate and whether one form can be used for both.

Survival tactic #4—Determine product and service-related exemptions.  Tax rules change constantly as states seek more sources of revenue.  Over and under charging sales tax can result in a higher audit risk.

» Review taxability matrices available on many departments of revenue websites here.

Survival tactic #5—Automate.  Manual tracking of exemptions and sales taxes is not only time-consuming and cumbersome, it also raises the risk of audit.  Something as simple as automatically tying each exemption certificate to each transaction can save hours of time and reduce risk of fines and penalties. Other advantages of automation include:

» Automates collection

» Tracks the progress of collecting certificates

» Helps to ensure the completeness of certificates

» Eliminates lost certificates

» Tracks certificate expirations

» Improves the exempt customer experience

This, of course, is Avalara’s specialty (why else write a whiter paper?).  You can find them at www.avalara.com.  We work with them, so we’ll be happy to introduce you, or forward you a copy of their white paper.  Just ask.




directions 2014PSSI recently returned from the annual “NAV Directions” conference in San Diego, where Microsoft and its many partners provided sneak peeks of the latest version of NAV, dubbed simply “NAV 2015”.  As NAV 2015 is released this week, we thought we’d share a few highlights from the NEW version…

  • NEW: Dynamics NAV for tablets – A new user interface redesigned for touch on tablets.  Elegant and fast, it puts content first.  It’s NAV, but with the look and feel of Microsoft Office.  Role tailored.  Available on App Store, Google Play and iOS App stores.
  • NEW user experience enhancements, like Enhanced Cues including customizable color (or ‘sentiment’) codes (Red for hot, Green for okay, or whatever you choose) and other controllable format options, like custom values, or almost any computed value in NAV.
  • NEW Office 365 integration – Sign into the Windows NAV client using your Office 365 account.  Drill down, analyze, share.
  • NEW: page simplification – Show only what’s needed, swiftly and cleanly.  A more modern Office 365-style design.  Fewer pages needing fewer clicks.  Simplified setup from role centers.

    - Chart up to 8 KPIs on “master data cards” in the role center.

    - Create mandatory fields, totals on sales and purchase documents and auto-filled number fields.

    - Simplification is a foundation for building solutions with a simpler user experience (UX) with focus on basic sales and purchase scenarios for small business solutions.

  • NEW: Use Microsoft Word 2013 as a layout editing option for document reports (like invoices, POs, etc.).  Customize document reports.  Change fonts, insert a holiday greeting, or add images in a WYSIWYG environment.

 – Also, report scheduling

  • Enhanced cash management features and improved bank management integration; new bank file conversion tools (from AMC).
  • Improved upgrading tools (Yay from a reseller!).  New merge utilities to simplify code upgrades and data upgrades for moving from older NAV to new, thanks to a new object called the upgrade codeunit.

For your convenience, we’ve attached a PDF of these changes below.

new in nav 2015

cloud_economistA recent article in The Economist (Aug 30, 2014) reminds us again that companies are embracing the cloud much more slowly than its proponents had expected.

According to research firm IDC, businesses will spend about $100 billion on cloud computing this year.  That sounds like a lot, until you put it up against the roughly $2 trillion that companies will spent overall on I.T.  That’s about 5% of computing budgets, including large companies, going to the cloud.  A bit underwhelming, considering all the press and the hype of the past few years.

To overcome this reluctance, the big cloud storage providers – like Amazon, Google and Microsoft – are slashing cloud storage prices radically.  Prices are likely to fall even further.  The article quotes marketing firm IPG Mediabrands CIO Samuel Chesterman, saying “Every cloud provider will bend over backwards to match rivals’ prices.”

The cloud promises and indeed probably presages a Cheap Revolution.  It should make storage cheaper and cheaper, while bringing down the cost of managing applications.  And indeed, for things like file storage and archiving, email and a host of web services it has.

But in other areas, inroads have been modest at best.  In one of our previous (March 27th) posts, we noted Panorama Consulting’s recent survey that indicated that cloud usage in the ERP space had suffered a severe decline (of nearly 50%) in the past year.

Meanwhile, security foibles are certainly not helping cloud’s reputation.  The recent and much ballyhooed scare over hacked celebrity photos from Apple’s iCloud, along with recent Internet outages at places like Facebook are not helping.

But in the long run, these are merely speed bumps.  I’ve long held the view that the cloud is inevitable.  More tangibly, the cloud will be to the 21st century what the grid was to the 20th: always on, ubiquitous, everywhere.  It’s just a matter of time.

And in the short run?  Probably, a hybrid-cloud solution makes the most sense.  You utilize the cloud for the uses for which it’s optimized.  Again, storage… backup… email… and an unending library of applications.

But for the business world, some things are just too valuable – and the cloud still immature and insecure – to risk it all.  For these applications – and our specialty, ERP for manufacturers, surely fits this bill – local hosting still makes sense.  If I’m a small business owner, I want to be able to walk down that hall, pat that server on its proverbial head, and know that my data and applications are right there where I can see them.  With sufficient backup and power precautions, I know I’ll rarely be down for long, and I know my data can be kept safely where it is.

To be sure, precautions are necessary.  I.T. providers exist for a reason you know.  But at the end of the day, with my business on the line, I want my data secure, my applications local, and my business away from the eyes of snoops, hacks, even the government (nowadays).

Give cloud its due.  Hybrid too.  And local hosting.  For everything there is a season.

In the meantime, try to keep your nude selfies to a minimum.


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