COVID-19: ERP/MRP systems top priority for supply chains
COVID-19 has accentuated problems and accelerated change in a global supply chain environment already under stress. Supply disruptions are no longer a once in a generation act of god; they have become routine. Demand is increasingly fragmented and unpredictable. The risks of Just in Time begin to outweigh the benefits; large, long term commitments to low cost suppliers half a world away no longer look so attractive.
In theory, the uncertainty and complexity rule presents an opportunity for smaller manufacturers and suppliers who are closer to market and that are agile and responsive enough to change in a way that challenges larger organisations. But complexity is costly.
A number of countermeasures can be taken along the supply chain. Retailers may rationalise the variety of merchandise they stock. OEMs can reduce the degree of customisation they offer.
These measures could see the niches for products and services offered by smaller firms disappear as companies limit complexity, uncertainty and cost by reducing their supplier base. With major procurements now having to be constantly monitored and actively managed, companies don’t feel they have the bandwidth to interact with the myriad small suppliers. SMEs risk being squeezed out of the ecosystem. There is a similar dynamic upstream in the supply chain – suppliers with their hands full dealing with major accounts, changing their requirements on a daily basis, are less eager to service small, intermittent orders, or to prioritise smaller customers in times of shortage.
Small manufacturers have to make themselves ‘preferred suppliers’ or indeed, ‘preferred customers’. This goes beyond technical and quality standards, competitive pricing, service levels and financial checks. It is about making the SME as easy and hassle-free to trade with as the larger companies – if not, more so. ‘Seamless’ is the word: the customer’s procurement, operations and finance people should be essentially unaware of the boundary between their own company and their SME supplier.
Recent developments in business systems automation, delivered through SaaS, mean that even SME suppliers can come close to this supply chain nirvana. An appropriate MRP system is at the core of delivering such a system.
Now, the small manufacturer may reasonably say that they don’t really need sophisticated manufacturing resource planning – the issues are well understood and can be accommodated on a couple of simple spreadsheets. But look at this from the corporate customers’ point of view – what do they want, expect, and increasingly demand? In three words, simplicity, visibility and confidence.
Can the SME provide, very quickly, a quotation that accurately reflects real production costs, and offer guaranteed, achievable delivery times? Can the SME dynamically reschedule production and delivery as customers’ requirements vary? How robust and well documented is batch and serial number tracing? Can the SME raise orders on its own suppliers quickly and easily? How timely and effective is the commissioning of carrier and courier requirements? How easy is it to generate dispatch advice and delivery notes? How accurate are the SMEs invoices?
Crucially, how much of this activity can be done electronically and automatically, machine to machine, without phone calls, emails and costly, time-consuming and error-prone rekeying of data? Is the firm set up for e-commerce? E-invoicing, at the very least, is often now an entry-level requirement for trading with major corporates, and indeed with the public sector. Corporates expect that if with one key-stroke they send a revised order/delivery schedule, everything else will happen from their point of view, automatically.
While commercial customers expect to purchase through portals and websites, many small manufacturers are also building Direct to Consumer e-commerce channels, partly due to the Covid-19 lockdown.
Take small brewers for example. The Covid-19 lockdown has been devastating for the industry. While the big brands were able to supply grocery chains in volume, smaller independent brewers who sold mainly through pubs, bars and restaurants have been hit hard and need to adapt. According to a survey of small brewers across the UK, conducted in April 2020 by the Society of Independent Brewers (SIBA), 70% of breweries are offering new delivery or takeaway services in order to help supply their local communities with independent craft beer. 61% of those breweries now offer free delivery to local communities. The survey also found a 55% increase in online orders.
As with other small manufacturers, this raises the need for, amongst other things, dynamic real-time rescheduling, and public visibility of stocks and delivery times.
Customers, no matter where they are in the supply chain, demand visibility and confidence. They need the certainty that the goods are in stock, or an order has completed a key manufacturing process, or that it will arrive in the booked docking slot. They want the assurance that, if problems do arise, the SME has the systems to pick them up, act on them, and if necessary advise the customer. They may require real time access to and visibility of progress reports.
This can’t be achieved sensibly by phone calls, emails and huddling over a brief-case full of spreadsheets, even when that is allowed again. It needs systems and, although not all these applications are core MRP functions, MRP provides the backbone from which they all depend.
Building an MRP backbone is no longer a long term, big ticket, consultant-intensive project. Systems from MRPeasy are highly graphical and intuitive, easy to use, with low training requirements. They can be readily tailored to the business practices of the individual firm – usually by the users themselves. As a Cloud-based software offering, initial investment is low and on-costs are determined by the features used and the level of usage, which is highly scalable, without long-term contract commitment. Updates and patches can be installed automatically from the Cloud, as can new features developed from the shared experience of the wider user community.
In these troubled times, an agile MRP system could make all the difference between being a ‘preferred supplier’ and an ‘also run’. An MRPeasy system can give small manufacturers the look and feel of major suppliers, without compromising, indeed enhancing, their agility, flexibility and responsiveness.
How changing your company's software code can prevent bias
Two-third of tech professionals believe organizations aren’t doing enough to address racial inequality. After all, many companies will just hire a DEI consultant, have a few training sessions and call it a day.
Wanting to take a unique yet impactful approach to DEI, Deltek, the leading global provider of software and solutions for project-based businesses, took a look at and removed all exclusive terminology in their software code. By removing terms such as ‘master’ and ‘blacklist’ from company coding, Deltek is working to ensure that diversity and inclusion are woven into every aspect of their organization.
Business Chief North America talks to Lisa Roberts, Senior Director of HR and Leader of Diversity & Inclusion at Deltek to find out more.
Why should businesses today care about removing company bias within their software code?
We know that words can have a profound impact on people and leave a lasting impression. Many of the words that have been used in a technology environment were created many years ago, and today those words can be harmful to our customers and employees. Businesses should use words that will leave a positive impact and help create a more inclusive culture in their organization
What impact can exclusive terms have on employees?
Exclusive terms can have a significant impact on employees. It starts with the words we use in our job postings to describe the responsibilities in the position and of course, we also see this in our software code and other areas of the business. Exclusive terminology can be hurtful, and even make employees feel unwelcome. That can impact a person’s desire to join the team, stay at a company, or ultimately decide to leave. All of these critical actions impact the bottom line to the organization.
Please explain how Deltek has removed bias terminology from its software code
Deltek’s engineering team has removed biased terminology from our products, as well as from our documentation. The terms we focused on first that were easy to identify include blacklist, whitelist, and master/slave relationships in data architecture. We have also made some progress in removing gendered language, such as changing he and she to they in some documentation, as well as heteronormative language. We see this most commonly in pick lists that ask to identify someone as your husband or wife. The work is not done, but we are proud of how far we’ve come with this exercise!
What steps is Deltek taking to ensure biased terminology doesn’t end up in its code in the future?
What we are doing at Deltek, and what other organizations can do, is to put accountability on employees to recognize when this is happening – if you see something, say something! We also listen to feedback our customers give us and have heard their feedback on this topic. Those are both very reactive things of course, but we are also proactive. We have created guidance that identifies words that are more inclusive and also just good practice for communicating in a way that includes and respects others.
What advice would you give to other HR leaders who are looking to enhance DEI efforts within company technology?
My simple advice is to start with what makes sense to your organization and culture. Doing nothing is worse than doing something. And one of the best places to start is by acknowledging this is not just an HR initiative. Every employee owns the success of D&I efforts, and employees want to help the organization be better. For example, removing bias terminology was an action initiated by our Engineering and Product Strategy teams at Deltek, not HR. You can solicit the voices of employees by asking for feedback in engagement surveys, focus groups, and town halls. We hear great recommendations from employees and take those opportunities to improve.