When you’re forecasting potential needs for your business, there are many factors involved. Inventory, sales order.jpg)
processing, raw materials costs, required labor and compliance (just to name a few) can all affect your bottom line.
That’s where Enterprise Resource Planning (or ERP) systems, more generally known as business management software, can come into play. By organizing your data through the algorithms used in ERP systems, you can get a more accurate, mathematical reading of how to give your vendors and customers what they need, when they need it.
“It’s not just accounting. It’s not just sales order entry. It’s something that manages the entire business,” says Greg Lafferty, senior account manager for Practical Software in Concord, North Carolina.
Here’s how it works:
- The ERP system divides data from all those elements into three measurable groups: customers, vendors and internal resources.
- It breaks down those elements by category, such as Web portals and online shopping carts, manufacturing time and purchase requirements, and human resources and difference of revenue and cost, to help make its calculations.
Improving customer relations and service
Customer data could also include physically going and looking at your business system and pulling out data from store scans and store-level inventory, which can help the system make a prediction of when you should be shipping products to help with numbers inside the store, Lafferty says. It even extends to customer relationship management, like prospecting for new customers, marketing and point-of-sale data from both brick-and-mortar and online sales.
“The customer-facing side of the business isn’t only about gaining those new customers, but then to retain them and make them what we call ‘sticky.’ It should be easy to work with you, it should be easy to do business with you,” Lafferty says. “When they think about ordering a truckload of product out of your greenhouse, they should think about your business supplying that to them, and no one else.”
Making the most of vendor’s data
Your vendor’s data can also be used to make those calculations. If you need to order something, like pots from China, the system can churn through the requirements necessary to streamline that process.
For example, if you need pots from China, the ERP system will determine the days it takes to ship the pots, how many thousands of petunias need to be potted that week, and then factor in that product’s grow time and two days to set up the equipment. The ERP will then determine the specific day that you should place your order with the vendor.
“When you're dealing with your vendors, the easier it is for a vendor to do business with you, the better pricing you'll receive, the better customer service you'll receive,” Lafferty says. “And so as much heads-up as you can give a vendor to future requirements, the more likely it will be that you will receive your product on time and as specified.”
And when it comes to company data, the ERP system is able to determine factors like workload scheduling and the labor you’ll need, in addition to keeping track of vendors and customers. Traditional manufacturers can arrange a third shift, or something similar, to get an order completed and out in time, but in many cases, that doesn’t work for your plants, as they have to grow weeks ahead of time. An ERP system can also take into account factors like competitive prices, unemployment, where the store is located and median household income.
Taking a look at your growing operation through the eyes of an ERP system can mean a more efficient shipping schedule, reduced costs and less wasted inventory, to name a few benefits. And the effect is felt all through the supply chain. “If I change any of those inputs in the front end, the trickledown effect is a change in requirements downstream, as opposed to making a change somewhere along the way and that change not propagating down to the end suppliers,” Lafferty says.
For more information about software solutions for your growing operation, visit www.growervertical.com.
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