The business disruptions created by the pandemic touch all parts of manufacturing, spanning the way people work, the way products are made and priced, and how items are delivered. In reaction to new market demands, manufacturers are turning to automation to add more flexibility into the production lines. But enterprise resource planning (ERP) software, which typically handles planning, procurement, reporting and finance, is in demand as well—with some new requirements. Specifically, ERP has to address e-commerce and the supply chain.
According to Scott Deakins, COO of Deacom, a provider of ERP software specifically for global manufacturers, four new trends have emerged over the past year that are driving demand for additional ERP functionality.
· The move toward real-time supply chain data.
· A big e-commerce push.
· Increases in freight costs that require manufacturers to do more 3PL rate shopping.
· The need for flexibility in product pricing, which changes due to raw material and labor costs.
“Customers are asking different questions during the [ERP] sales process about how fast we can react to supply chain changes,” Deakins said. “They all lived this nightmare [the past year] and it’s on the forefront of their minds and driving the discussions.”
One such customer is Baumer Foods, a family-owned business that was overwhelmed by consumer demand in 2020 and trapped in a heavily customized ERP system that required employees to perform workarounds manually. “When demand spiked, getting our product to customers was a nightmare. We had a number of systems to manage and they often didn’t work well together,” said Michelle McDaniel, Baumer Foods’ vice president of sales. “Deacom helped us get hyper-tight process control, and we’re finally in the position to keep up with consumer interest and take on more SKUs and private label customers.”
Deacom differentiates its ERP suite by bundling more functionality into a single system. “We have all of the data in one place to help customers react and change fast,” Deakins said. “Customers are looking for the ability to quickly change their pricing to adapt to changes in costing, and we have everything from formulation to production scheduling to labor management to get visibility to costing changes faster and utilize pricing changes across all sales channels faster.”
In addition, Deacom has supply chain planning capabilities from dock scheduling to material requirements planning to production capacity planning, as well as warehousing capabilities. Last year, the company introduced 286 new product enhancements to its ERP portfolio. “But I would say the system that had the most changes was e-commerce due to changing customer needs,” Deakins said.
Part of that relates to shipping, which has become an issue for companies committed to one carrier, like FedEx or UPS, and that experienced major shipping delays, price increases, and shipping limits during the pandemic. As a result, they needed a way to work with multiple carriers and do price comparisons.
Deacom has its own e-commerce platform and has recently built-out shipping functionality that handles rate shopping and real-time delivery updates. In 2019, Deacom formed a partnership with shipping software supplier EasyPost, using an API to add EasyPost to the Deacom ERP so that the system can find the cheapest shipping rates as well as create labels.
“Also on the e-commerce site we are able to provide real-time delivery dates to customers based on which shipping method is selected. We can e-mail customers to notify them the product shipped and the expected delivery because with EasyPost integrated we have that feedback,” Deakins said.
In addition, when it comes to solving the need for real-time feedback in the supply chain, Deacom has electronic data interchange (EDI) native to the system vs. a bolt-on middleware package, which helps to get information on shortages and changes to sales forecasts to adapt quickly.
While Deacom recognized early on the need to extend ERP beyond the enterprise, it will be a trend in the industry moving forward, Deakins said. “Yes, there is an ERP fence in terms of functionality that ERP can support. Areas like rate shopping for carriers falls outside the ERP space, but we are seeing more ERP companies forming relationships or acquiring these solutions to make sure it is handled seamlessly through the [system].”
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