Replacing formula manufacturing systems – when it is time to change? – Part 2 Obsolete Software

While on a trip back from visiting clients in Barbados I was listening to some newly downloaded tunes on my trusty 5-year old iPod. I was blissfully content with my eclectic mix of Bob Marley, Rolling Stones, Katy Perry and Rhianna. Little did I realize the "kid" sitting next to me was doing the same on his brand new iPhone. The difference was that he had all these really great applications on his iPhone that I did not realize existed.
Not to be outdone with multi-tasking I pulled out my notebook computer to get some work done while I listened to my music mix. My new friend continued to read downloaded new stories, queue up emails to deliver when we land, update a white paper he was working on as well as sort through hundreds of photos stored on his phone. He was a busy fellow.
As a self-proclaimed "geek" I was amazed at how far behind I had fallen with my poor single purpose iPod.
For me it was a wakeup call that the world had moved on. Instead of multiple large devices this kid was running circles around me and loving every minute of the experience.
That got me to thinking about my clients and potential clients. How much has changed in technology that we are not taking advantage? What am I doing to help these realize the potential that can assist them today? That brings me to the second installment of "Replacing formula manufacturing systems".
Many formula manufacturers are running on systems purchased and implemented in the 1990's. Many of these were selected as a reaction to the Y2K issues in 1999 and 2000.
Since that time much has changed in the formula manufacturing industry.
Technology

• SQL Server has become the default database
• .Net Framework for easy integration with other systems
• Virtual servers or hosted environments

Work environment

• Teleworking
• Toll Manufacturing / Outsourcing
• Mobile access to data (smartphones/iPod)

Compliance

• Country of Origin Labeling
• Allergen disclosure
• MSDS / Nutritional Analysis

Customer/Vendor interaction

• Relationship tracking with CRM
• Electronic Funds Transfer
• Web based access to data (MSDS, COA)

The challenge for many companies is to look internally and see what their old legacy systems are offering and what have they just learned to live with. Has the world passed you by? Is your system living in the 1990's while your customers are living in the present?
I good way to get a reasonable assessment of your current system is to ask your colleagues. I would suggest asking your existing suppliers about their systems. What features do they have that might assist your company? How are they addressing similar business issues and can you get that out of your legacy system? If not – it might be time for a change.
In working with our clients or new prospects a couple common reasons emerge.

• Hardware is obsolete but the company is concerned that the software will not be supported by the new hardware
• Sales is requesting more information about customer demand
• Compliance officer is addressing issues with outside applications such as excel
• Scheduling is performed manually or with limited system assistance
• Communication with customers/vendors is manual and not tracked

The fact is that the world has changed. Software has really stepped up to the plate for formula manufacturers over the past 10 years and it is not uncommon for new systems to pay for themselves within 12 months. That is a quick return on investment and is progress that pays dividends for years moving forward.
So how do you go from the 1990's into the 2000's without breaking the bank? How do you pick from qualified manufacturing systems?
Here are some key points to remember if you feel you have room for improvement

• There are a few large ERP players in the market right now – look at them first (Microsoft, Sage, SAP, Infor)
• Eliminate all discrete/assembly/BOM manufacturing applications from consideration – there are plenty formula manufacturing applications out there
• Be careful of the "boutique" message that "all-in-one" solutions is the only path – a small company writing all the software running your business is very dangerous and often falls short as times change and the small company can't keep up with the changes
• Select a new application to solve key business issues not just features – take some time to look at what you could do that would bring cash into your company and find an application that delivers on that vision
• Ask vendors, trusted customers, advisors and search the various web sources to find candidates to replace the legacy system – if the application does not speak about your industry on the first page of their web site - move on
• Forget the RFP process. If you cannot tell that an ERP system is written for your industry then you need to move on. When you come across one that focuses on your industry you will know it. There is no reason to pay a consultant that knows little to nothing about your industry to help you find potential solutions. The software developers have done a great job making them known. Instead search the web using words key to your industry, review trade show exhibitor guides, ask the major ERP suppliers how they handle formula manufacturing and ask anyone who knows your industry.

The truth is that most companies review their ERP solutions at least every 5 years and most change system or significantly upgrade systems every 10 years. How old is your system and is it time for a review or a replacement? The odds are you have unsupported business issues that can be solved by an updated application. The odds are also good that the new system can be paid for within 12 months. So what are you waiting for?
For me – I am going to start looking at alternative systems to my trusty Blackberry and iPod. I am ready to do more with my single handheld device and do more with my time when I am ready to do the work. That is where technology has progressed and I need to get on board.
So check back in the future and monitor my progress. Also if you find your systems are less than ideal and are looking to change feel free to contact me. Also check out Vicinity Manufacturing at www.vicinitymanfucturing.com to see what a formula manufacturing solution can do for you today.
Up next? We will talk about replacing the custom written software. See you then.