ERP Extensions

Microsoft Dynamics AX and ERP Strategy

By Jack Burnett

I had the privilege of listening to Microsoft's Kees Hertogh, Director Product Development for MS Dynamics AX at the iSight 2010 Conference.  I was impressed with Microsoft's product strategy for competing in the $50B ERP software market. 

Here are some highlights from the presentation:

The Dynamics AX strategy includes:

• Invest in industry relevance for rich vertical ecosystem
• Focus on Global Market capabilities: multi-site, -legislation and - language; n-site central deployment
• Enable 2 Tier ERP deployment
• Continual productivity increases for ERP users
• Target organizations with 200-7,500 employees

An example of a 2 Tier ERP deployments is Dell, who uses Oracle for their financials and is using Dynamics AX at their 6 manufacturing plants.

Microsoft sees the future of enterprise software satisfying 2 sets of interlocking requirements:

1. Design for People requirements - a person's workplace, dynamic nature of that workplace and information presented in context of the workplace
2. Build for Change Requirements - the application enables the right work process changes, it evolves with pace of business change and can adapt to the changes, and preserve the integrity of business processes during change.

They are tailoring Dynamics AX to handle the transaction oriented processing of ERP systems and also be process oriented, a driver and enabler for process change and adaptable workflows for processing.

Mr. Hertogh pointed out that Gartner in July 2009 considered Microsoft Dynamics AX a 'Leader' in the Midmarket and Tier 2-Oriented ERP Magic Quadrant.  Gartner defines the Tier 2 ERP market as products with a global presence and specifically tailored to for product centric midmarket companies with roughly 100-1000 employees.

In the last quarters of 2010 and first half of 2011 Microsoft has the following updates planned:

• Industry Capabilities - Dynamics AX for Retail
• Horizontal Capabilities - Connectors for Dynamics CRM and SAP, Payroll
• Technology Capabilities -  Oracle2SQL data Migration Assistant, Azure capabilities and the Intelligent Data Management Framework.

The Intelligent Data Migration framework is a new tool to help analyze data storage and assist in removing or archiving redundant and historical data for better database performance and to reduce storage costs.

ERP Extension for Manufacturers

By Jack Burnett

What is ERP extension? ERP extension is simply leveraging the information in your ERP system with a custom software solution to do more for less.  The result is a fully integrated business solution that enables manufacturers to share information transparently to constituents across the value chain - to be more effective, agile and connected.

When talking about ERP extension, we also include MRP and CRM extension. Integrating ERP, MRP and CRM products with your company's business systems and with partners' external systems can extend functionality such as:

• Determining real-time, production schedules for the shop floor
• Creating BOMs from CAD systems
• Connecting your eCommerce website to your ERP
• Handling service requests on the Web
• Empowering dealers to submit and track orders on the Web
• Automating communications with your partners

In short, ERP/MRP/CRM extension improves the visibility of information across your value chain. Extensions are needed to support unique manufacturing processes, provide custom reporting, custom user interfaces and processes to update the ERP/MRP/CRM database, or real-time integration of transactions with other manufacturing, financial or eCommerce software.The most common reasons why an ERP extension is the right fit at the best value are:

• the ERP/MRP/CRM software product doesn't perform the function,
• the cost to customize the off-the-shelf product is prohibitive,
• custom access to the ERP data is needed to support the shop floor or remote users,
• your manufacturing process relies, in part, on ERP/MRP/CRM data.

TwinEngines consultants have spent the past 14 years working with manufacturers and working with and extending the capabilities of ERP, MRP, and CRM systems. Commercial, off-the-shelf software with which TwinEngines has worked include:

• SAP
• BAAN
• Salesforce.com
• Microsoft Dynamics AX, GP and NAV (Navision)
• Microsoft CRM
• Macola
• Epicor Vantage
• Infor
• Sage's MAS
• Visual
• SysPro
• SyteLine
• QuickBooks
• Act! and Goldmine

At TwinEngines, we know manufacturing and how these systems operate, what they are best suited to do, how data is organized, and when an extension is the right choice for your unique manufacturing process.  We have found that manufacturers confronted with the option to buy a newer, bigger, better ERP system, can instead implement a more cost-effective, custom solution to exend the investment in the current ERP system.

There are two main types of custom extension solutions. The first are custom manufacturing operations management systems that stand beside the ERP, MRP and/or CRM system. They pull data from the ERP/MRP/CRM databases, and update information via access at the database level or through service-oriented architecture (SOA) functions.  An example is a production scheduling system that the front office and shop floor use to manage operations, and that customers use to enter and track orders.  Often times they provide touch screen access on the shop floor and mobile access in the warehouse.

The second type of extension solutions are standalone, custom applications that plug into the ERP/MRP/CRM system adding specific functionality to support operations or eCommerce. An example is plugging in a custom order entry tool into the CRM system so CSRs can utilize CRM customer information and the web eCommerce platform - a tool that is also integrated to financials for accounting.

TwinEngines utilizes both web development software and database application development tools to build extension solutions. Internal database applications that integrate to the underlying ERP/MRP/CRM system and also provide Internet access for customers, vendors and partners enable manufacturers to operate more effectively and streamline sales, customer service and their value chain.

ERP/MRP/CRM software products provide a broad range of functionality trying to cover a diverse group of businesses. They do a great job supporting the common, core business functions. However, almost all implementations require additional, custom functionality that does not come "out-of-the-box". Why? Because successful manufacturers have unique business processes that make them competitive - processes that the ERP system do not effectively address. TwinEngines builds well designed extensions to ERP systems extending their value and economic shelf-life, providing a more complete solution for manufacturers.

ERP Software for Manufacturing

By Jack Burnett

ERP (enterprise resource planning) software is a complex software system which integrates a manufacturer's business resources and functions, and can be used by manufacturing businesses with multiple manufacturing plants, processing functions and product configurations. An ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources.

ERP systems can merge each of these key business operations; however, often times a mid-market manufacturer utilizes only a portion of the ERP software functions because of unique business processes.  In these cases a custom software application can extend the ERP system to manage the uniqueness and complexity of the shop-floor.  These software applications are ERP Extensions, and TwinEngines is a leading provider of manufacturing operation management solutions integrated to ERP systems.

ERP software for manufacturing can be classified into the following categories: process manufacturing software, discrete manufacturing software, or mixed-mode manufacturing software. The right ERP business system depends upon whether the manufacturer's production environment is continuous process, contract manufacturing, job shop, batch processing, repair and maintenance, repetitive, or work order based.

Comprehensive end-to-end ERP solutions for job shops and smaller manufacturers are also offered through the Software as a Service (SaaS) model. ERP SaaS solutions reduce IT complexity and capital investment, enables them to get up and running quickly, and decreases ongoing operational costs.

ERP Software Selection Resource

By Jack Burnett

At TwinEngines, I help companies participating in the manufacturing value chain solve issues with manufacturing technology based solutions. For small and mid-market manufacturers, the ERP system may be the most costly technology investment in the company.  If your company uses 75% of the functionality of an ERP system, then I consider that a success.  As far as the remaining 25% to manage your unique processes, custom ERP extensions built on a flexible framework that integrates to ERP are often times the most efficient and effective answer.  Those ERP extensions are one of the solutions TwinEngines has been delivering the past 15 years.

Our industry experience enables us to integrate many of the leading ERP/MRP/Financial systems for small, mid market organizations.  Products like Microsoft Dynamics, Macola, Infor Visual, SyteLine, SysPro, Ross Systems, Epicor Vantage, Glovia, BAAN, Sage's MAS products, Intuit's QuickBooks, and more. 

One of the key value propositions at TwinEngines is our ability to help companies determine if they need an ERP system or if they should leverage custom and best of breed applications. If ERP is the answer we bring in our partners and other organizations to help.

Top10ERP.org is a great resource for manfuacturers to get an unbiased picture of the ERP landscape for manufacturing.  While we work primarily with discrete manufacturers, Top10ERP.org categorizes ERP systems for most modes of manufacturing including: process, mixed-mode, engineer-to-order, make-to-order, light assembly, shop floor/job shop and distribution.  It also sorts by industry and has whitepapers and case studies to help you understand ERP.

A resource like Top10ERP.org coupled with TwinEngines' strategic manufacturing technology consulting leads to manufacturing technology solutions that are the right fit and the best value for your company.

Extending Epicor ERP to the Shop Floor

By Jack Burnett

I am working with a Georgia manufacturer that builds process air filtration and recycling systems - helping them implement a new ERP system with ERP extensions.  After manufacturing, assembly and quality control tests, the manufacturer disassembles portions of the system and crates the parts for shipment to customers around the world.  When the system is assembled at the customer site, missing parts are a very expensive problem.

In order to ensure that all the correct assemblies and sub-assemblies, and all the manufactured and purchased parts are in the crates, the shipping department needs to know what was suppose to be in the crates and compare to what they packed.  The Epicor Vantage ERP system didn't provide a cost-effective method that matched their unique manufacturing processes, but a custom manufacturing operations system housing ERP extensions did.

Built on a technology platform that integrates to Vantage at the database level and through the Service Connect function, the custom ERP extensions allow the manufacturer to keep their engineering and shipping processes and not change them to match the off-the-shelf ERP system.

Engineering drawings files are imported into the custom manufacturing operations system and bill of materials are created in the ERP system automatically.  This data is accessed by the custom manufacturine operations system later in the process to create engineering ship lists that match their current reporting format.  When the shipping department packs the crates, they scan the parts with their existing bar code scanners. The manufacturing operations system saves the information, and allows shipping to override the engineering ship list to match realities on the shop floor.

When the shipping department is ready to send the crates to the customer location, the shipping manager uses a comparison feature in the manufacturing operations system to verify that what is in the crates matches what is on the ship list created by engineering.  Packing lists and cover sheets are automatically created in the format they have been using for years - the format they found worked best for them and their customers.

While the new ERP system meets the demand for the common tasks found at manufacturing businesses, the ERP extensions provide the flexibility required on the shop floor. With the custom manufacturing operations system on the shop floor, the manufacturer is able to extend the ERP system to meet the unique manufacturing processes that make them competitive.

Extending ERP to Your Value Chains

By Jack Burnett

When extending ERP systems, at TwinEngines we believe the Right Fit at the Best Value is the critical evaluation.

We focus on what is important when integrating business systems, and that is: What are you trying to accomplish.  We have helped companies with the following ERP Extensions and integrations to synchronize information flow in manufacturing value chains: 

• Create BOMs from AutoCAD drawings
• Pulling a Job's AutoCAD drawings for the production team
• Integrate customer and dealer master information so portal users can login and see their account status information.
• Parse Work Orders to provide production scheduling and dynamics routing for the shop-floor and customer service
• Allocate jobs to work teams and resources, handling rush orders
• Track crate contents, matching shipping lists to engineering ship lists
• Push labor and material information for product costing
• Collect information requests and registrations on corporate websites and insert into CRM for lead tracking
• Push web orders into financial systems from eCommerce websites seamlessly
• Provide credit hold information from a financial system to validate a website ecommerce purchase
• Send eCommerce orders to shipping systems for cost-effective fulfillment
• Match customs inspection reports to items, orders, shipments and customers in SharePoint for easy access and tracking
• Track and manage sales commissions

Aberdeens' ERP in Manufacturing Benchmark Report summarizes the three most important factors to consider when comparing ERP systems vs. pure play solutions:

1. functionality
2. integration
3. ability to upgrade. 

We all know that matching up the features and functions to the business processes is a necessary step.  However, the report found, that on average, companies use only 43% of the available functionality in their ERP system.  That tells me that when considering an ERP system, there is a fourth dimension - The Right Fit.

After settling in with an ERP system or 'Best of Breed' solution, often times small and mid-market companies begin considering extending ERP functionality to their supply chains and value chains.  The report states two important factors for ERP extensions:

1. Complexity of integration
2. Implications on system upgrades

When extending ERP, what the report does not mention is a third equally important factor: that is COST.

When extending ERP systems, at TwinEngines we believe the Right Fit at the Best Value is a critical evaluation. For 14 years we have been working with small and mid-market manufacturers and distributors to increase competitiveness and profits with focused solutions automating their unique business processes. 

When we extend the ERP, MRP or financial system, we implement a Service Oriented Architecture (SOA) technology - an enterprise foundation allowing the synchronization of information throughout the business and with vendors, partners and customers.  We utilize the latest technology to simply connect to ERP system databases, minimizing the impact of ERP upgrades and even a move to an entirely new ERP system.

TwinEngines' key differentiator and value proposition is the focus and passion we have for delivering value to our customers. We start with a strategy to create the roadmap to implement the right size ERP extensions that can scale with our customers success and growth. We implement functionality that is focused on solving the unique business processes at a company.

Contact us for a demonstration or consulation on tackling your unique business operations and processes by extending your ERP, MRP or financial systems to the shop-floor, to your supply chains and your value chains.  We love to walk your plant floor or tour your website, discussing opportunities to increase sales and competitiveness.

Most Manufacturers Customize ERP Systems

By Jack Burnett

When it comes to working with ERP systems, our 14 years of experience with small and mid-market manufacturers includes systems from many Tier II and smaller ERP vendors, like Epicor, Infor, QAD, Microsoft, Sage, Macola to name a few. Our focus is providing custom ERP extensions to these systems to meet unique business needs.  Often times our custom solution, built on an enterprise technology platform, makes the most economical sense for small and mid-market manufacturers. 

A recent study by the Panorama Consulting Group, another independent firm in the ERP space like TwinEngines, found that SAP is the leading supplier of ERP software, followed by Oracle.  However, the study also shows that the Tier II ERP vendors can also meet the complex requirements found at manufacturing and distribution companies.

The study was based on online polling data and focus group interviews involving 670 individuals from manufacturing and distribution companies that have implemented ERP within the past three years. 

It is interesting that the study showed that only 18% of manufacturers and distributors implement ERP using a 'plain vanilla approach':

• That is, 82% of the time a manufacturer or distributor had to pay for additional customizations as part of the ERP implementation. 
• 47% had some customization involved and 35% had 'heavy' customization during implementation. 
• Customizations for manufacturers and distributors is higher than other industries due to the higher degree of specialization and complexity found in many manufacturing operations.

It is important that you understand your own requirements for selecting an ERP system. Focus on the business process and the business needs, not just the look and feel of the ERP software. Chances are that the ERP system you select is not going to solve 100% of your requirements and needs.  So when you look at the required customizations, consider whether a low-cost, custom ERP extension is the better, quicker alternative.  One that is focused on the specific business issue.

An implementation plan following these major phases has yielded the most effective use of ERP software based upon our experience with small and mid-market manufacturers and distributors:

1. Document requirements, processes and business needs
2. Select the ERP system and identify areas requiring customization
3. Implement the ERP system without major custom work
4. Follow a phased approach to add ERP extensions to meet your unique requirements, processes and needs.

When the ERP extensions reside in an enterprise platform that integrates to not only the ERP system, but to other front-office and shop-floor systems, information is visible and synchronized for the entire company.   This increases efficiencies and leads to a competitive advantage.