Logistics & Materials Handling speaks with David Taylor, Director at BusinessHub to find out why an ERP system is a crucial part of growth.
“Typically, we meet a lot of businesses who are expanding, they want to move into the next phase of their business. But they recognise that they have issues with inventory,” David says.
If a business starts to struggle with managing increased invoicing and inventory, it can run the risk of missing orders, losing customers and reversing that growth.
“Usually when businesses are growing, they start to realise they are running into problems. They often miss out on orders because they don’t have the stock. Or the opposite problem is that they are holding too much stock which holds up cash flow,” David says.
Many organisations run into problems when they fail to accurately forecast sales. According to David they often end up with old and outdated stock which may never sell. “The first step is to start with foreword forecasting. Businesses need to work out what they should be ordering and when they should be making these orders.”
Optimising supply chain and inventory management could mean the difference between your business thriving or folding. One issue is that usually organisations buy by container or pallet load but then they sell in boxes. “An ERP system can work out all of those formulas with ease so you can have a higher accuracy of the movement of your stock,” David says.
As a business develops, they may open new distribution centres or locations to accommodate stock requirements, but this can lead to more issues. “A company may be based in Melbourne but they ship to Adelaide, Sydney or Brisbane. When an ERP system is implemented, organisations have total transparency over where the stock is. If an organisation is low in stock in Newcastle but have stock of the same product in Brisbane it might not be the smartest move to order more stock,” David says.
Having the ability to check live stock levels across all locations allows organisations to exercise economies of scale. “Consolidation of spending can offer great competitive advantages,” David says.
For many organisations, live visibility and traceability of stock is a necessity. “In the medical industry, they have to ensure certain stock is sanitised, or even in the food industry there is a lot of sensitive batch stock with expiring ingredients – so the stakes are very high if you get the forecasting wrong,” David says.
Similarly, in high value organisations, such as the automotive industry, ordering parts that may never sell can cause serious financial risk.
For David, MYOB Advanced becomes the core part of the business and organisations can then attach any other solutions they use to the software. “An organisation may use a container fill optimiser or schedule solutions provider, whatever they need they can extract data from MYOB Advanced to feed these other platforms and make them work smarter,” he says.
Additionally, for organisations operating in the e-commerce area, the MYOB platform can be fully connected to their chosen platform and provide live stock information so that orders can be accurately fulfilled.
“We see our clients pick up the platform very quickly. It takes about two to three months for them to get entirely up to speed and then in about six months they are really confident with the product,” David says.
BusinessHub’s main aim is to empower their clients to optimise their processes and the MYOB Advanced product enables this. “We enable our customers to get familiar with the platform, and for them to drive its application. We want our customers to be confident in the product and to know that it does the core solutions very well,” David says.
“It really is the heartbeat of a business and I would urge any organisation that is growing and recognises they have an issue with inventory management now, or further down the road to look into the benefits of the MYOB Advanced cloud-based solution,” David says.
Enterprise Resource Planning (ERP) systems are becoming more and more common. A study from Queensland University of Technology found that more than 60 per cent of Fortune 500 companies had adopted an ERP system as early as 2000.
The MYOB Advanced platform is a complete solution, featuring inventory and order management, profits and pricing models, customer management and offers customers full control over their logistics cycle.