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Webinar: Tips for Surviving the Changing Digital Landscape

June 11th, 2014 Brianne Schaer No comments

As digital technologies continue to transform the way consumers shop, businesses in the retail and consumer packaged goods industries must be able to keep up in order to remain competitive. Enterprise resource planning software is becoming more common to perform operations and manage inventory. Regardless of the tools available, there is a shift among the businesses that acknowledge digital disruption and those with a solid, attainable digital strategy.

A recent Forrester Research report titled “The State of Digital Business in 2014” found that while 74 percent of today’s business executives say their company has a digital strategy, only 15 percent believe that their company has the skills and capabilities to execute that strategy. The report reveals the reality of digital business in 2014 by examining digital business strategy, responsibilities, and organization structures.

Ignify’s new webinar titled “Digital Disruption: Threats and Opportunities for Retail and CPG Leaders” provides cutting-edge advice and tactics to build a successful technology strategy. Guest presenter George Lawrie of Forrester Research discusses new industry trends, how those trends are impacting the way retailers and consumer packaged goods companies do business, and how business applications allow companies to meet both threats and opportunities head-on.

Digital technology

Source: newretailblog.com

Consumers expect to find an in-store item on their smart phone at the tap of the screen. View our webinar to learn more about how digital technology has changed the way retailers do business.

The webinar features three main sections aimed at making leaders successful in the changing digital landscape. It culminates with a conclusion highlighting what these major points mean for a business developing a digital strategy as well as potential next steps.

Changing Consumer Behavior

Lawrie discusses how digital disruption can generate better ideas faster, as there is more competition between retailers online as opposed to just brick and mortar stores. Additionally, buyers are completing much more research before purchasing an item, and expect the retailer to provide a seamless experience across channels. With the Internet, consumers expect retailers to provide facts, data, and comparisons to paint accurate portrayals of their products.

Supply Chain Proliferation

Digital disruption has ushered in an increase of value-added services and precise tracking of items. Merchandise must be personalized to varying audiences; businesses must be able to supply goods for different demographics with varying demands.

Application Strategy for the Age of the Customers

In order to remain competitive in the digital age, businesses must provide useful, usable, and enjoyable experiences. These experiences will have to be transmitted across all channels, as more consumers will be turning to computing trends, such as mobile devices and wearables, to research their purchases. Lawrie discusses fascinating new data regarding this “mobile mind shift” during the webinar.

The full webinar is available here and may be viewed after completing a short registration form. For more information regarding Ignify’s ERP solutions, please email dynamics@ignify.com.

Crucial Webinar Insights:

  • New Forrester data on customers' and employees' changing expectations.
  • How changing expectations impact retailers' and CPG manufacturers' enterprise applications, such as supply chain.
  • How applications enable companies to evolve with these shifts and provide customers the service they demand.

Brianne Schaer is a Product Marketing Specialist at Ignify. Ignify is a technology provider of ERP, CRM, eCommerce, and Point of Sale software solutions to organizations. Ignify is winner/finalist of the worldwide Microsoft Partner of the Year Award in 2014, 2013, 2012 and 2011. Ignify has been included as the fastest growing businesses in North America for seven years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine from 2007 to 2013.

Optimizing your Supply Chain and Warehousing with Microsoft Dynamics AX

April 19th, 2011 Eric Shuss No comments

Last week Ignify had presented a paper at the Dynamics Academic Alliance proceeding in the Microsoft Convergence conference. This blog is a summary of the paper. Microsoft Dynamics AX presents the most powerful ERP product as validated by Gartner and other analyst firms. It provides enterprise coverage for the business but especially shines in optimization of supply chain, MRP, warehousing, and inventory management.

The traditional model of produce/ buy, stock and sell has been turned on its head. Just because you are able to make enough of an item and stock it – it doesn’t mean you are going to be able to sell it. The supply chain has to be very nimble and responsive to the shifting demand patterns. Demand is not only different by items, assortments and item categories but also can be very different by channel, geography and customer type. For example one of our customers sells to big box retailers with EDI orders as the sales channel, sells direct to consumer through its ecommerce sites and then to academia through a network of sales professionals and inside customer service team members. The big box retailers hit their peak in September and October when they stock up for the holiday season while the ecommerce site hit its peak in November and December and the schools typically buy in June and July before the schools open. While there is overlap in what each customer buyer segment buys there are differences too. So the customer has the challenge of aggregating the demand across all the different channels and customer types and combining into an overall business demand forecast and ensuring the supply chain stays in tune with the demand pattern as there are always changes due to a multitude of factors.

The Traditional Linear Supply Chain is becoming more Demand Driven. Microsoft Dynamics AX provides native functionality for a demand driven supply chain with MRP, Production planning, Purchase Planning and Vendor Portals

Figure. The Traditional Linear Supply Chain is becoming more Demand Driven. Microsoft Dynamics AX provides native functionality for a demand driven supply chain with MRP, Production planning, Purchase Planning and Vendor Portals

Microsoft Dynamics AX offers rich functionality for helping Improve Customer Service, Lower Inventory Carrying Costs, and Increase Visibility through the supply chain.:

  1. Powerful MRP and Master Planning functionality: Dynamics AX has the ability to take in a sale or demand forecast (or multiple forecasts for different geographies, customer groups, item groups/ item categories) and automatically create recommended purchase orders with purchases dates and recommended production orders for manufacturers. Master Planning automates purchasing and production planning.
  2. Safety Stock Recommendation: A tool that automatically recommends safety stock for items based on past sales order volume and desired fill rate.
  3. Vendor Portal: For vendors to be able to login and see their purchase orders and if you desire also your inventory so you can move to a Vendor Managed Inventory (VMI) model.
  4. Supplier collaboration tools: A services oriented architecture with the Application Integration Framework (AIF) that makes integrating with suppliers and customers straight-forward with the use of web services.
  5. Operational dashboards and Native BI: While most systems provide management dashboards – Dynamics AX provides operational dashboards and role centers that improve insight at the guts of the organization. For example out of the box role centers exist for Warehouse Managers, Accounts Payable Clerk, Controller in addition to the Executive dashboards for a CEO, CFO and other CxO roles. This helps ensure that users at all levels are empowered with the correct information to make intelligent and informed decisions. Most importantly Dynamics AX can be a single integrated system that captures all important data and provides a single version of truth for users across the organization.

Microsoft Dynamics AX provides information at all levels in the organization with operational, tactical and executive dashboards thus allowing for informed decision making across the organization

Figure. Microsoft Dynamics AX provides information at all levels in the organization with operational, tactical and executive dashboards thus allowing for informed decision making across the organization.

As an example, Ellison had seen a significant shift in its business model from a manufacturing company to a distribution business. It had also morphed from a single channel to a multi-channel business. It also needed to optimize its supply chain to be able to more tightly integrate its supply with its demand and reduce on-hand inventory with automated planned purchasing. Ellison implemented Microsoft Dynamics AX 2009 that helped it

  1. Automate the warehouse with RF using native Dynamics AX integration though AIF to the RF hardware. Dynamics AX provided the ability to do directed pick and directed put-away using the location control in Microsoft Dynamics AX
  2. Used Master planning to automate the purchasing process and reduce inventory carrying costs.
  3. Integrate natively to customers to receive orders via EDI and process ASNs thus increasing visibility to demand and lowering order processing costs

Ram Kanagala, Director – IT at Ellison susms this up well "This project is a showcase example of a client-partner relationship at the highest quality, delivering the project on time and on budget, with improved business processes and seamless information flow across systems, resulting in operational cost efficiencies and improved sales forecasts." If you need more information on optimizing your supply chain email us at dynamics@ignify.com

Eric Shuss is the President of the ERP Division of Ignify. Ignify is a technology provider of ERP, POS , CRM , and eCommerce software solutions to mid-market and enterprise businesses and public sector organizations. Ignify is a Top-tier Microsoft Gold Certified partner ranked in the Microsoft Partner of the Year for Retail in 2010 and both the Microsoft Dynamics Inner Circle and the Microsoft Dynamics Presidents Club in 2009. Ignify has been included as the fastest growing business in North America for 4 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine. Ignify has employees in Los Angeles, Silicon Valley, Phoenix, Nashville, Chicago, Toronto, Manila, Pune and Bangalore.

Landed Cost in Microsoft Dynamics GP

April 21st, 2010 Raja.SLN No comments

What is meant by Landed Cost?? In general any cost incurred in addition to value paid to vendor to procure the item is a landed cost. Examples are shipping and handling, customs and excise.

The What of Landed Cost

Landed cost is not that big an issue while dealing with vendors who charge a consolidated value to leave the goods at your door. Life would be too easy if it were that simple, wouldn’t it? We ask vendors to charge our account with carrier while shipping because we have better negotiated rates with the freight carrier. Vendor does not have control over import duties such as customs, excise. So we need to find handling agencies that take care of paper work and get the goods out of the yard. Or we pay to government and handle it ourselves.

The Why of Landed Cost

Guess what, all these are additional costs paid on top of the bill paid to vendor for the item. We need to add all these up to get the true cost of inventory. So you get to know the real margin. Some businesses simply expense out the cost because they don’t have the facility in their system and it is too much overhead for them to track it manually. Well, Dynamics GP customers can use the  Landed Cost module to track landed cost at ease.

Dynamics GP provides true ability to handle third party landed costs

So if your Vendor charged your UPS account for the freight, log an approximate value of freight in landed cost are of the purchase receipt. When you receive the freight bill from UPS

  • Match the UPS invoice to the landed cost recorded on shipment from Vendor. The variance between the approximate value and this actual value can be applied to inventory or recorded to a Purchase Price Variance account.
  • So GP provides ability to record the third party vendor landed cost invoice, match it landed cost, updated variance to inventory or to a variance account.

Oh, what did you say, the UPS invoice has several lines each pointing to shipments for multiple items or multiple shipments for the same item. Don’t worry, Dynamics GP provides ability to record a third party vendor invoice and match each line to different shipments.

Other real time applications of landed cost are adding the freight cost when moving items between warehouses.

Have you ever had to move goods from one warehouse to another? What happened to the cost incurred in moving stuff from one warehouse to other? Use the landed cost feature the ‘In Transit Transfer’ window. This is a very useful feature, especially when you want to obtain the true cost for an item in the warehouse.

Nice to haves:

It would be nice to get a feature similar to landed cost in SOP module. So we can record an approximate freight charge. When we get a real invoice from a carrier, we can either charge the excess or return the balance by way of a credit memo or debit memo.

This post is written by Raja S L N. Raja is a Manager in the Microsoft Dynamics GP Practice at Ignify. Ignify is a Global Microsoft Dynamics Inner Circle Partner specializing in Microsoft Dynamics ERP for RetailDistribution, Manufacturing and Chemicals verticals. For help on Microsoft Dynamics ERP email us at dynamics@ignify.com

Fast ROI for manufacturing companies and distributors from your ERP

February 17th, 2010 Sandeep Walia No comments

I was recently interviewed by a reporter from Search Manufacturing ERP on how manufacturers can get quick ROI in today's market. I've worked with quite a few manufacturing companies both in my past life at Deloitte and at Ignify. ERP, in general, is not a fast ROI project I believe there are certainly some things that a manufacturer can do to get Quick ROI.

First of all, the manufacturing paradigm in North America has changed. With a few exceptions, Manufacturers in North America are no longer doing heavy manufacturing. Most of the manufacturing work is now done with subcontract vendors in China, SE Asia etc. So the manufacturing challenge is less about managing the shop floor but more about managing the supply chain and optimizing inventory either in the warehouse, with the vendor, on the water. This is, in fact, really important because the new paradigm means that lead times have shifted and become longer with a 60- 90 day lead time to get product not uncommon. That requires better forecasting, demand planning, purchase planning and better tracking of critical inventory items.

Not surprisingly, manufacturers have not yet made that paradigm shift completely. When I do a site visit at a manufacturing site I find the focus still very much production planning and shop floor control even though now the manufacturer is just doing warehousing and light manufacturing at best. There is very little focus on the planning, forecasting, warehouse management and supply chain management aspects which burden the cost significantly. As an example of a cost burden, I surveyed a manufacturer that builds heavy engineering product often finding themselves with gating parts – i.e. parts that are not available and hold up the completion of the item. The net effect was about 6 weeks added to the production cycle. Doesn't seem expensive? Check out the math below.

Average sales price of item: $2 million (this is a complex end product)

Cost of capital to manufacturer: 10%

Cost of 6 weeks of capital: $23,000 (2 million * 6 weeks/ 52 weeks * 10%)

Cost of delay on 100 shipments: $2,300,000

$2.3 million dollars in cost of gating parts! Now this is a $200 million manufacturer that has a net profit of $2.5 million (which by the way is a pretty good number for most manufacturers). The net impact of eliminating the gating with better inventory optimization would be to double the manufacturer's net profit. Before you say – this is not me because you don't do $2 million type products – change the numbers a bit. It could be 10,000 shipments of $20,000 type product going out or 100,000 shipments of $2,000 type product etc and you'd still have the same cost of capital of $2+ million dollars. Even if you can only shave off a couple weeks and not 6 weeks and if your volume is lower remember that you are still talking at least hundreds of thousands of dollars if not millions in savings by optimizing your inventory and supply chain with better planning. No small change by any standards.

The reality for manufacturers is that the management now has to be on the supply chain and inventory optimization and not just production planning and shop floor control. So how can you do this? Fortunately most of the newer generation ERPs provide functionality to do this out of the box. I'm going to take the example of Microsoft Dynamics AX – a next generation ERP from Microsoft – as a solution to this and show some quick and easy things to enable functionality that can help you get there.

One of the more important things to do in getting to a stable replenishment mode is to use automated replenishment to the extent possible: Dynamics AX has the ability to automatically spit out planned purchase orders by looking at a variety of things

  • Safety Stock levels
  • Forecast
  • Sales Orders
  • Purchase Order
  • Inventory that is Available to Promise
  • Vendor Lead times

For a human being, to take into account all of these parameters and provide a planned purchase forecast manually is just impossible – even if you just have under 200 Finished good SKUs. If anyone tells you otherwise they are kidding you or pulling wool over your eyes. No individual buyer or group of buyers is going to be able to do a multi-parametric calculation that involves six parameters and create a planned timeline for all your SKUs for each vendor without doing some rough (and dirty) ballparks. You need a fairly sophisticated automated process to do this right. And why shouldn't you – you will cut labor costs, you will reduce your inventory stocks outs as well as lower your cost of carrying inventory. And you should leverage the ERP to do that.

How do you do a forecast – for that you can use a demand forecasting system if you have a complex web of customers with changing patterns or you can get quite basic and track it in excel as a starting point and improve from there on. Dynamics AX provides you the ability to load forecasts by customers, customer group or at a total level.

Dynamics AX Sales Forecast by Item by Customer or Customer Group

The above figure for example shows the forecast in Dynamics AX by different customer groups. For example, the first line shows the forecast of 5000 units for all major customers and 6,000 units for a particular item for Retail customers. Dynamics AX splits them out based on an Item allocation key based on month (or any other time period relevant to you). By defining such item allocation keys you can take into account seasonality or business cycles.

Loading a forecast is however, optional. You can run planning just based on current open transactions including sales orders, purchase orders and inventory. The figure below shows planned purchase orders and planned production orders created using the MRP functionality for multiple release dates for multiple items with the quantity to be ordered and the desired delivery date. The delivery date ties to your need of the product and the order date factors in the vendor lead time.

Planned Purchase Orders with Dynamics AX Master Planning

The end result is a stable automated planned cycle that happens every day, week or month depending on the frequency of inventory churn and volume of orders in your business.

Now should you do this for every single SKU in your item master or just for some SKUs. My answer is your top % of SKUs by some measure. This measure could be sales quantity, Sales $, and most typically for manufacturers inventory carrying cost (which is determined by inventory value). Typically you would classify your items as ABCs and plan for the As and Bs and just ensure the Cs are always there and typically overstocked since they have a low inventory carrying cost. The ideal way to do it is again to have the ERP actually calculate the ABC classification for you. For example, in the example shown below I asked Dynamics AX to rank the top 25% of items by revenue as an A, Next 30% as a B and the rest as Cs. I may choose to do now do weekly planning on my As, monthly on my Bs and do no planning and use an auto-fill mechanism on my Cs.

ABC Classification of Items done automatically in Dynamics AX

This is simplifying it a bit but the point is that I don't need to go through a lot of grunt work to get this done. The system will do 90% of my work of loading forecasts, generating purchased orders and even deciding which items get planned for with the appropriate configuration. The end-result you've saved yourself a boat load of work and enough dollars to make this a high and fast ROI project.

Want more – email us at dynamics@ignify.com to get on our email list for valuable tips or to ask us any questions in general.

Sandeep Walia is the President & CEO of Ignify. Ignify is a technology provider of ERP, CRM, and eCommerce software solutions to businesses and public sector organizations. Ignify is a Microsoft Dynamics Inner Circle Partner and ranked in the top 18 Microsoft Dynamics partners. Ignify has been included as the fastest growing business in North America for 3 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine.