Tuesday, March 1, 2016

When should you go to the cloud? Vicinity Manufacturing's story.

There are a a number of arguments to be made about transitioning to "the cloud." I wanted to share our story on how we went to the cloud to help give some perspective on what the cloud is an why it is an option to consider.

I was trying to remember when we went to the cloud.  Was it when we moved GP into the cloud in 2014 or when we changed our phones from an on premise PBX to the cloud in 2013?  Maybe it was when we moved our Microsoft Dynamics CRM from our server in the office to the Microsoft Cloud in 2012 and got rid of our Exchange Server for Office 365 around the same time?  No, I would argue it was at inception when we put our web site in the cloud in 2001 and have been refining it ever since.

You see going to the cloud is not a moment in time.  It happens when it makes sense as a solution.

For us I never even thought to host our web site in our offices.  I could have. It just did not make sense.  We rely on GoDaddy for our hosting and have been satisfied.  It is has gone through many server upgrades as well as redesigns.  Some of that we were involved with and some of it we were not.  In the end it has grown and changed with us over the years.

I remember a time where our users were having trouble getting their email from our in-house Exchange Server.  If I re-booted the server they were fine.  But 24 hours or so later they would be kicked off.  Instead of sitting down and figuring out the problem I would set an alarm every morning and reboot the server remotely.  Sounds crazy today but that is what I did for a few months.  Eventually I decided to end the non-sense and looked into Office 365.  We transitioned all our email over the weekend and our email issues were solved.  A month later I destroyed the Exchange Server and sent it for recycling.

Similarly an upgrade of our on premise CRM required that we change our CRM server hardware.  Faced with a $5,000 or more expense I took the opportunity to move it to the Microsoft Cloud.  We were able to upgrade immediately and have never looked back.  A side benefit is that we are now able add bolt on solutions for CRM in a snap.  We don’t have to worry about being on the most recent version or if our hardware can support it.

We went through a CRM upgrade a couple months ago and have another one scheduled for a couple months from now.  Our users will not know that it happens and all we had to do was approve the upgrade.  That cannot be more simplistic.

One day our phones went down.  We rebooted the PBX and things were fine for a while.  They went down again.  We have a service person come out and look at the box.  The PBX had not been touched in a few years and it was old and out of date.  The technician was not able to resolve the issue beyond what we already did.  Frustrated I contacted the developers of our existing PBX.  They had a cloud offering.  In about an hour we had all users back up using phones and our clients never missed a beat.  Today our PBX is in the cloud and I cannot tell you the last time I accessed it – nor cared about it.

Finally, when we decided to move Dynamics GP to the cloud it allowed for a great test environment.  We setup GP on the new version we desired.  We used that process to test the migration and allow users to play with the integration.  I happened so fast that we decided to just stay on the cloud as our live environment and never looked back.  The original plan was to perform the migration again when we were ready.  But we were ready immediately – so we just stayed in the cloud.

So for us going to the cloud happened when events made the decision really easy.  The transition is still ongoing. But to this day we do not own a server.  

We work with interconnected hosted solutions and we spend more of our time helping clients, solving problems and making the best software we can.  We do not spend time configuring, upgrading and disposing of servers.

For us it has been great.  I hope this help and we look forward to seeing you in the cloud.

Wednesday, February 3, 2016

To Yield or not to Yield?

Formula manufacturers need to keep a keen eye on the yields they experience by formula. It is easy to be lulled into sleep by average yields and not realize a potential for significant profits or significant losses.

If a company typically experiences a high yield when measuring raw material input vs finished goods output it is hard to see that certain products may be achieving far less than standard. These differences can be masked by total production averages - total usage vs total production.

Identifying yields by formula over time provides the following benefits:
  • Efficient use of R&D - allows a an R&D department to focus on those few formulas that experience an lower than normal yield on a regular basis
  • Reduce Inventory - permits the reduction in finished goods inventory by reducing the likelihood of finished good shortages because the scheduler is not being caught off guard by not achieving expected results - many companies hold excess finished goods inventory to buffer from these variations
  • Improve Costing Accuracy - provides accurate costing data to calculate finished goods selling prices - if a formula yield drops from 90% to 80% that has the effect of reducing the selling price up to 10%
The address this issue a formula manufacturer should routinely compare actual production yield (raw material input vs finished goods produced) at a batch level. If the company is running a manual batch management system this can be done on a sample basis.

Newer manufacturing systems can notify specified users when any formula experiences a lower than anticipated yield. This allows immediate action to be taken if necessary.

In summary, potential profits are easily masked by neglecting to observe yields at a formula level. By relying on total production yield calculations the details are lost in the averages.

Take a look today at some of your highest moving formulas. Is the yield what you expect? Could the yield be better? The time spent may have a dramatic impact on your bottom line.

Editor’s Note: This post was originally published in November 2011 and has been updated for freshness, accuracy, and comprehensiveness.
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