Recently we began working with a $100 million consumer products company.
The company manufactures and distributes products that are sold to retail chains and distributors in the sporting goods and hardware industries.
Over the last decade their business model has shifted from solely manufacturing to a combination of manufacturing and distribution. In fact, a majority of their business is now distribution.
This business shift led company leaders to explore a change management process.
ERP and Change Management
The change in business models has brought significant growth. Over the last four years, while most manufacturing companies were fighting to stay alive, our client achieved an impressive 35% growth in sales.
Our client implemented their current ERP system, related hardware, and supporting procedures in 1995. While many modifications have been made to their system and procedures since then, the related hardware has not significantly changed and cannot be updated. The risk of obsolescence and complete breakdown of the current system related hardware is very real.
The Need for ERP
The factors below were some of the strong indications to our client that a change was needed:
- Age and vulnerability of the existing system. The system is outdated and unable to appropriately service both internal and external customers. Current systems are unable to scale to handle increase in business and personnel.
- Paper based system. Many processes rely on the movement of paper that can lead to errors, inefficiencies and delays. Many processes are manual and redundant, contributing to inefficiencies in productivity and communication.
- The lack of access to information. The company produces a lot of data but very little information. Dozens of reports with data are produced, but are of little use without hours of review and preparation of manual Excel reports. Currently users do not have quick, flexible access to information in order to make good business decisions. The use of multiple systems complicates reporting, reducing key data visibility and compromising data integrity.
- Business Change. When the company acquired its current information system it was exclusively a manufacturer. Over the last decade much of the manufacturing has moved off shore. Our client is pursuing a modern comprehensive distribution software system with built in capabilities for planning and reporting.
Challenge to Opportunity
While the risks inherent in running on an antiquated system initiated the research of a modern ERP system, our client also realized an opportunity to evaluate their current business processes.
A commitment from management to pull together a team of their top resources and a capital budget allocation lead to a one year plan to transform business processes and integrate a supporting and modern ERP system.
These commitments, including educating employees and implementing industry best practices, are geared to help drive business performance improvements that will allow a company that was already prospering during a very difficult period in manufacturing, to grow at a greater rate and generate more profit.
If you’d like to bring about positive change in your organization, we can help. Business process improvement is an integral part of our ERP selection and implementation projects.