The consumer packaged goods (CPG) manufacturer is wise to seek out ERP consultants that have a clear understanding of the issues faced by the sector.
Industry-specific knowledge is critical for manufacturers to implement best practices, tools and technology specifically proven to help CPG producers meet their specific business challenges.
As we’ve noted in the past, the consumer goods industry is driven to meet the requirements of retail customers.
Retailers demand goods manufactured to their unique requirements, delivered within aggressive lead times and shipped to highly variable forecasts. Retailers demand competitive pricing and consistently high quality goods. The CPG industry is also impacted by increasingly complex customer and regulatory mandates related to reporting, labels and other areas.
If the manufacturer can’t meet these demands, they lose business. That’s why the ERP selection process these companies undergo plays a critical role in their ability to compete and thrive.
About the CPG Company
Throughout 2012, Ultra has been working with a $200 million consumer packaged goods company that produces luxury personal care products.
The CPG manufacturer develops, produces, and distributes their products to sell to consumers and distributors in a competitive global marketplace. They currently work through multiple distribution models ranging from B2C retail and ecommerce to international affiliates.
Limited by Legacy Systems
In more than thirty years of growth, our client has continually built-out their proprietary business systems.
Over time, the company has found that their homegrown systems no longer support the needs of a global operation. The multiple systems are difficult to maintain, and place a high burden on the company’s IT resources.
It’s amazing to consider that our client implemented its current information system in 1985. It’s no surprise that management has come to believe it is time to change.
Noted here are two main factors that contributed to their need for change, prompting them to make the decision to begin ERP selection:
- Aging Technology – The client’s business system has been developed over thirty years. In many cases, the resources that developed system modules are no longer with the firm. The system languages are old and it is increasingly difficult to find resources familiar with the languages. It is also difficult to support and maintain such legacy systems
- Paper Based Systems – Many of their processes rely on the movement of paper. This means staff can’t attend to more meaningful tasks, and instead are burdened with the creation and storage of volumes of paper files. In addition the users keep an extensive paper trail of information. Collecting and synthesizing data is difficult and disparate systems result in multiple views of the “truth.”
Based on these issues and others, our team helped the company conduct a thorough evaluation of current state processes and systems.
The focus was on business process improvement and an equally important phase of business process education, for the company to understand what is possible with today’s ERP implementation and how ERP systems have evolved.
The next post in this series will share further factors that drove the ERP selection process.