PETproject

Published: September 26th, 2005

J.E. Mondou Ltée – a Montreal-based pet food and accessory chain with retail, distribution, wholesale and light manufacturing operations – had been relying on an outdated Unix-based system where front and back office staff wasted hours generating giant paper-hungry reports to make routine decisions. But the company, which has 220 employees and 35 stores in Quebec, initially struggled to find a better approach.“The problem is that we are a retailer but we are also a wholesaler,” says J.E. Mondou controller Pierre Bazinet. “We could find good retail ERP software and good wholesale solutions but not one system that did both.” Assessing between 25 and 30 available options, his team locked on a combination of Microsoft’s Retail Management System and its Great Plains solution, believing the two would work easily together. But it wasn’t that simple.
“Even though they were both MS products, they were not so integrated. The process was a lot more complicated than we anticipated,” says Bazinet. “This made it a massive HR challenge that required a lot of staff training. People were reluctant to change their habits, so it was vital to get everyone on board and involved in the transition.” Once the obstacles were overcome, though, the benefits quickly became clear. “We can now make system changes easily and cheaply and it’s a package that requires a lot less maintenance than our old solution,” says Bazinet.
It’s not just staff and software that can require an overhaul when a new ERP solution is considered. When Laura Ryall joined Schukra, a Windsor-based manufacturer of car seat lumbar supports, in April 2001, the company had old Hewlett-Packard equipment running a Unix operating system and database software from Oracle. The package, according to Ryall, was way past its prime. “Let’s just say I walked into an area that had a lot of opportunities for improvement,” says the company’s director of management information services.
Introducing a combined hardware and software upgrade — Ryall opted for IBM iSeries equipment and a BPCS 8.2 ERP package from SSA Global Technologies — took time but delivered swift and appreciable benefits. The new system increased invoicing, manufacturing scheduling, package tracking and billing procedure speeds by up to 90 per cent. The company’s cost roll, which used to take six hours, now takes two and the cheque run, previously a one-hour chore, is now complete in around five minutes. These critical time savings go right to Schukra’s bottom line, says Ryall. “The automotive industry is very competitive right now. Our executives are telling us that we need to make savings at all levels and this is how we can do it. With this system, we’ve become a faster, more accurate and more effective organization,” she adds.
These are the kind of benefits that any good ERP system should deliver. Despite this, many businesses — especially in the retail sector — can be slow to recognize the need for investing in new ERP systems. Garth Dean, director of MS Business Solutions at Microsoft Canada, says companies should make a commitment to understanding what business benefit a new solution can offer.
“If it’s doing its job right, a system should create effective time management and data collection. The goal is to make employees work smarter and the company more intelligent,” says Dean.
“First, they need to decide what they need a new system to do. They need to see the value of what it can deliver and understand that this requires an investment, especially since the benefits of an effective ERP solution are often not clear for several years,” he says.
“Companies know they need to be thinking about this — they know where their constraints are. Once they’ve figured out their pain points, they can begin contacting providers to see what we can do for them.”
At IBM Canada, Websphere software executive John Donaldson agrees that this initial period of self-analysis is the key to laying the right foundation for a successful ERP strategy.
“Many businesses don’t even know how their processes are run and it can be an eye-opener to have their existing systems analyzed,” he says.
“Often, companies don’t have seamless integration of their systems and their employees can be entering the same data many times.”
A successful system, though, can completely change the culture of an operation. Instead of always looking over their shoulders or scrambling to react to other companies, says Donaldson, a business can move onto a more forward-thinking footing.
“Mid-sized and larger companies are often opened up in their thinking,” he says. “By mastering their data, they can learn from previous projects and solutions and deal effectively with the future instead of always trying to reinvent the wheel every time a new challenge comes along.”
It’s this successful management and manipulation of data that’s becoming increasingly important in enabling companies to outperform their rivals, according to Augustin Manchon, partner in charge of retail strategy at Accenture Canada. He sees a growing tension between the need to create operational efficiencies and the inability of maxed-out ERP legacy systems to deliver anything more than fragmentation and inefficiency.
“Retailers need to honestly assess the true cost of maintaining an old system and compare this to the cost of what else is now available. In recent years, the cost of maintaining older systems has increased while the cost of new ERP solutions has gone down,” says Manchon.
“For retailers — who have lower margins than many businesses — this cost-assessment can be critically important,” he says.
Manchon has noticed that retail businesses in particular are among the most reluctant to understand the value of ERP investment.
“Too many retailers are examining piecemeal solutions when they should be looking at the big picture,” he says. “Budgets need to go a little higher in ROI and companies need to realize that while initial costs can be high, so are the benefits.”
Even if they’re not yet ready to invest the money, all businesses need to start investing some time in ERP issues, advises Manchon.
“Do your homework and get to know what you don’t know and you’ll soon realize that effective ERP is the solution to the razor-sharp margins retailers face today,” he says.
“Put that at the forefront of your decision-making and be sure to choose a solutions partner who knows what you’ll need two or three years down the line.”

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