Integrated DNA Technologies (IDT) is a leader in life sciences manufacturing and developing products for the research and diagnostic market. It serves the areas of academic research, biotechnology, clinical diagnostics and pharmaceutical development. IDT synthesizes and ships an average of 36,000 custom products per day and serves more than 86,000 customers worldwide.

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With the challenges of double-digit growth; expanding into several new product markets and fulfilling FDA traceability requirements, IDT knew it needed a new business system.  Ultimately IDT selected Microsoft Dynamics AX ERP 2012 and implementation partner Edgewater Fullscope.

According to Aaron Warner, CIO, “From an integration perspective, IDT has easily combined Dynamics AX ERP with existing custom software used in our complex manufacturing environment. The consistency of interface design and familiarity of other Microsoft products greatly simplified the training requirements. Ultimately, we found the total cost of ownership to be lower than our projections.”

Watch this short video and learn more …

The fascination with data continues to proliferate, just like data itself. “Big data” used to be considered a collection of data sets so large and complex that it was difficult to process using on-hand database management tools or traditional data processing . Now it is seen less as something to grapple with and more as a source of tremendous power that can maximize value, identify new revenue streams, and ensure advantages in an increasingly competitive global marketplace. While this may be true, and the growing concern with big data understandable, there’s a more manageable and often underutilized source right in the heart of most enterprises: ERP data.

According to Aberdeen, Enterprise Resource Planning (ERP) solutions are an integrated suite of modules that form the operational and transactional system of record upon which any business is based. “As such, ERP systems contain large amounts of data that can be used to gain visibility into business operations and underpin informed management decisions,” says the introduction to a recent study by the analyst. “Often there is difficulty in finding the data needed and analyzing it to gain insight. Data may be siloed or inaccessible to business users, preventing these organizations from gaining the full return on investment (ROI) from their ERP implementations.”1

One of the major reasons many ERP implementations have not lived up to expectations is that they were employed as a software project per se, rather than as a business improvement tool.2 Failure to fully understand the value of ERP data may be a part of this misapplication. “Information is the lifeblood of the organization, and the primary goal of ERP is to provide decision makers with the information that they need in order to make properly informed decisions; to provide a solid foundation of truth,” notes Sean Culey, a member of the Supply Chain Council’s European Leadership Team. “Accurate and timely data can enable rapid, incisive decision making, whilst poor and inaccurate data slows down everything, [creating] excess management, duplication, and indecision. Many businesses use tools like ERP as transactional recording devices to capture what they have done, rather than pour their intelligence into the system so it can plan what they should do.”3 As a result, many users say that ERP presents information they disagree with, constraining the flexibility of their supply chains.

In contrast, those who are leveraging their ERP data, integrating it with other enterprise systems, and delivering it in a timely and understandable manner to decision makers are seeing significant benefits in operations. “It comes down to getting the data stream right, and that data stream comes from our ERP, CRM, and other enterprise systems,” says Doug Sheffield, vice president of information technology for Dallas, Texas-based Heritage Bag Company, the largest manufacturer of industrial trash bags in the United States. “We’re able to take that data stream, whether it’s customer, sales, production or manufacturing data, and make it available throughout our organization. By consolidating the data, we get a holistic view of where we are as a company; then we can see the different areas in which we can work, improve, and become more efficient.”

According to Sheffield, ERP provides a single trustworthy data source. Without that, companies struggle to:

  • Close out the month properly.
  • Meet compliance requirements.
  • Plan production accurately and effectively.
  • Understand what has shipped versus what has been billed.
  • Communicate across multiple facilities, be they plants or corporate offices.
  • Establish communications for visibility into all areas of the business from all areas of the business.
  • Make well-informed decisions.

To facilitate these essential activities, ERP solutions have evolved different ways of delivering data. Analysts note ERP’s expanding footprint, indicating its value will grow as long it continues to evolve to meet customer needs, and that those customers realize the value of this data.  These goals can get lost when these users become fixated on what they run day-to-day.4

Up Next: ERP Data Part 2:  Four Manufacturers Who Get It:   Or Download the Entire White Paper Now:  http://bit.ly/fs_erpdata

  1. “ERP Plus BI: Maximizing the Return on Your ERP Investment,” Aberdeen, 2012.
  2. Cutley, Sean, “Ensuring the ROI from ERP Has a Bigger ‘R’ than ‘I,’” The European Business Review, October 2012.
  3. Ibid.
  4. Goulart, Karen, “Other IT Systems May Get the Buzz, But the Value of ERP Remains,” TechTarget.com,  February 29, 2012.

Curious about the top IT challenges facing food manufacturers?  Edgewater Fullscope, Sunrise Technologies and Microsoft have sponsored a new video featuring Gartner that discusses the impact of data, social media, consumer demand, global supply chains and more on food manufacturers and other consumer product goods (CPG) companies.

The segment, “CPG Talk in 2013:  Conversations CPG Companies Need to Have Now to Compete and Survive,” features Gartner analyst Nigel Montgomery and provides new considerations for executives at consumer goods companies on technology strategies needed to stay competitive in a global economy, including growing or maintaining market share.

For food and beverage manufacturers, by-products are the unfortunate leftovers of producing valuable products and co-products. By definition, by-products are the manufacturing outputs that can’t be resold, repurposed or reused. They’re refuse.  By-products don’t add anything to production except effort and cost. It’s tempting to just ignore them and simply write them off as the cost of doing business.

But we all know by-products don’t just go away, and in most cases food and beverage manufacturers understand they ignore by-products and their costs at their own peril. There’s a price to pay. In some cases, the costs of not dealing with by-products properly are regulatory, environmental or safety problems and penalties. In other cases, the costs are less onerous, usually not knowing the true costs of production or misstating your real margins on products and co-products. Most food and beverage manufacturers must deal with both the internal and external impacts of producing by-products.

Fortunately, Microsoft Dynamics AX 2012 for the food and beverage industry makes identifying, tracking and accounting for by-products a straightforward, well — by-product, of planning and managing production. With a little preparation and forethought, Dynamics AX will help you capture critical by-products information during manufacturing and use that information to calculate the costs of by-products and handle any required regulatory reporting.

To effectively manage by-products in Microsoft Dynamics AX, you need to follow a three-stage process:

  1. Identify by-products resulting from the manufacture of a product, gather the data that describes them and define these by-products in Dynamics AX;
  2. Systematically capture production data as you manufacture products and co-products and produce the by-products; and
  3. Pass the collected data to the appropriate Dynamics AX functions, evaluate it and incorporate it into internal analyses and external reporting.

While these steps over-simplify things a bit, it’s basically the same process you follow in defining and using any set of data within Dynamics AX. Each of these steps includes a number of subsidiary tasks and involves decisions and potential mistakes that could affect the quality of the resulting information and external reports. Fortunately, none of the tasks or decisions is very difficult once you understand your data, your requirements and the steps you need to follow. Read the rest of this entry »

It’s been a mixed year for chemical manufacturers.  While end-use markets have recovered to their pre-recession levels, growth beyond that level has been slow.  For many North American firms, exports have been especially weak as markets in Europe have all but disappeared.  There are bright spots, such as the surge in demand for ethylene-based products, driven by burgeoning natural gas capacity.  Still, it’s been a year of eking out profitability wherever it can be found.  One of the strategies many chemical manufacturers are using to improve margins is a renewed focus on business basics, the industry best practices that separate market leaders from the rest of the pack.

Common strategies in emphasizing best practices include process intensification (the merging of two or more production processes), a search for greater supply chain efficiency and a renewed drive to pare overhead even more.  While every business process can yield some additional waste and performance improvement, producers often overlook the benefits to be gained from more effective vendor management and purchasing.

Procurement leaders differ on some of the details of what constitutes purchasing excellence, but several themes recur in almost every vendor management or purchasing excellence initiative.  We’ll discuss some of these initiatives shortly.  The common foundations of purchasing excellence initiatives are better communication, more accurate data at all levels and a focus on enforceable, repeatable processes.  Finding a way to achieve these objectives can be a challenge.  Microsoft Dynamics AX ERP for chemical manufacturers provides these foundations, as well as other tools required to implement best-in-class processes that can give you the competitive advantage you need to sustain and grow margins in an already competitive business.

First we’ll discuss some of the tactics you can use to improve purchasing performance and contribute to stronger margins.  Then we’ll look at how Microsoft Dynamics AX ERP can help you, as a chemical manufacturer, to effectively implement some or all of these approaches in your company.  Read the rest of this entry »

Businesses of all sizes, including more than 90 percent of Fortune 100 companies, rely on Enterprise Resource Planning (ERP) systems. ERP is an integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connection to the supply chain. Built on a centralized database and normally using a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise-wide system environment.

We are now more than 20 years into a business world driven, in good part, by ERP systems and the efficacies they enable. (The term “Enterprise Resource Planning” was first employed by the research and analysis firm Gartner Group in 1990 as an extension of MRP—first, Material Requirements Planning;  later, Manufacturing Resource Planning—and Computer Integrated Manufacturing. While not supplanting these terms, ERP has come to represent a larger whole.)

A recent survey of CIOs indicated that ERPs were “essential to the core of their businesses, and that they could not live without them.” They also acknowledge that many of these systems are out of date technologically, or, in the case of those that have newer systems, troublingly expensive with customization and maintenance costs. It is time to consider the questions: is your business running as well as it should be? If not, why not? Your current ERP system may be the dynamo it was intended to be, but if it has become outdated or outrageously expensive to operate—a dinosaur or a devil in the making—chances are it is doing more harm than good in today’s increasingly contested global competition. Regardless of your business or industry, the time has come to examine your ERP system dispassionately.

• Should you continue with your current system?
• Is it time to upgrade?
• Is it time to change?

These are not easy questions to answer. In part one of a multi-part post, this article is designed to give you an overview of what needs to be considered as you go through this interrogative—and potentially invigorating—process.

Why Consider Change?

To survive and thrive in today’s marketplace, companies must improve and streamline their operations and business processes to increase productivity, drive down costs, and foster innovation. These were principal motivating factors in the original implementation of ERP systems. Even as those systems have changed and evolved, ERP’s importance to business vitality has increased as competition has expanded. In a period of upheaval, such as the one we are living in, change is the norm and should not be postponed but rather embraced.

While ERP systems were designed to improve business processes, they sometimes impose bad ones. As you gauge the effectiveness of your current ERP system, do so in light of your core business processes. Is the system facilitating efficiencies and greater productivity, or is it forcing action based on its own structure?

Initial ERP systems were often inflexible, forcing organizations to bend their business processes to the needs of the software rather than the needs of the business. Or the software required significant, expensive, and time-consuming customization to gain a little flexibility. When business processes evolve and software remains static, a chasm emerges between the original implementation and the changing requirements of the business. This may continue over time to the point where the ERP system becomes an impediment rather than an enabler—in other words, dysfunctional.

Many companies with older ERP systems have augmented them with other software to gain functionality that was lacking in the initial ERP System implementation but subsequently deemed necessary. The data from these newer systems must integrate into the existing ERP System, and in numerous instances this has proved costly, problematic, or both.

Integrating data to ERP systems from these reactionary systems can be challenging, as even before their addition, data migration to ERP was often given inadequate atttention due to its typical position in the production phase of implementations.

As ERP systems evolved, the problem of integration has been addressed by the expansion of functionality. The idea is to replace standalone systems—and eliminate siloes of information—with the capabilities inherent in the new ERP System. Independent software vendors have also developed industry-specific modules that are tightly integrated to the core ERP application. As companies have persisted in their need for third-party applications outside of core ERP, ERP vendors have developed application interface tools (APIs) designed to ease integration challenges.

Access to both resources and support personnel is also an issue that demands consideration. As you assess the technology of your ERP system, consider where the vendor will be ten years from now, and what kind of support will be available at that time. Ongoing support must be a given if you are to stay with your current ERP system technology, just as your own organization’s ability to change must be considered if new technology is to be implemented.

Remember that when you purchase an ERP system, that purchase is not static but dynamic: the product, the vendor, and their relationship with your organization must develop and support your goals through the years to come.

Your ERP system’s ability to provide the reports and information is another important aspect to consider in evaluating current system status:

  • Are you getting the reports and information you need to run your business effectively?
  • Can users run their own reports queries or do they need to turn to IT for support?
  • If so, what are those costs in terms of time and labor to develop these custom reports and inquires?
  • How easily can you access reports and inquires?
  • How easily can you export them to desktop applications like MS Excel?
  • Is the information you’re getting real-time, actionable, and easy to understand?

Often a company will experience pain, or even failure, because during its planning, reporting tools and inquiries were not considered as important as other system components.

Many companies have no idea what the total costs are to operate their ERP system because only a handful of the costs are quantifiable. Hard costs (e.g., license fees, maintenance fees) can be easily expressed and are readily available, but soft costs are more difficult to grasp, and can be very costly in terms of labor, productivity, and time. In fact, if you were to just look at hard costs, a new ERP system will almost always appear to be a more expensive option than staying with the current one. But when total cost of ownership is evaluated, accounting for both hard and soft costs, a new system may be warranted because of the productivity gains, time savings, and increased revenue opportunities that a new system brings.

Weighing the costs and benefits of retaining an existing ERP system against the costs and benefits of changing to a new one is something that companies will do sooner or later. If your current business environment has you thinking sooner is the better of these options, then there is a methodology to follow that will inform the decision you must make—a decision that will have a shaping, and perhaps decisive, influence on the future course of your business.

Next Time/Part 2: The Process of Examination:  Detailed Steps To Determine if You Should Keep Or Replace Your Existing Solution

Microsoft Dynamics AX 2012 Is Coming on September 8 … Be the First to See It.

The world is risky enough—if your company is considering a new ERP system, consider the safest bet on the market: Microsoft Dynamics AX 2012.

Join us live on September 8 and see the new safe and powerful ERP system for discrete and process manufacturing and distribution companies in one of these cities:  Minneapolis, Dallas, Irvine, Portland, Charlotte, Grand Rapids or Cincinnati.  We’ll also hold launch events in Atlanta on September 29 and Boston on October 4.

Each launch event will be held at the local Microsoft office in each city, and will feature Dynamics AX 2012 highlights from Microsoft CEO Steve Ballmer, insights from Gartner Group ERP Analyst Nigel Montgomery, plus the opportunity to see AX 2012 in action from both a high level and industry-specific perspective.

All attendees will be able to take advantage of special Dynamics AX 2012 offers from event sponsors Sunrise Consulting and Edgewater Fullscope. Each attendee will also be registered to win free Xbox Kinect system.

If you have any business manufacturing processes that are causing you enough pain to consider looking a new enterprise resource planning system within the next two years, come see what is in Microsoft Dynamics AX 2012 and how it may be able to help make your job easier and your company more profitable.

Visit http://bit.ly/axlaunch to learn more or register.