8/16/2006
EVALUATING THE NEED FOR AN ERP
A properly designed ERP (Enterprise Resource Planning) system can enable a company to integrate its key processes. A typical system might include some or all of the following modules:
Business Intelligence
- Data Analysis
Checks & Forms Solutions
- Checks & Forms
Contact Management
- Contact Management
Customer Relationship Management
- Activity Scheduling
- Contact Management
- Customer Self Service
- Email Integration
- Help Desk Support
- Marketing Management
- Project Opportunity Tracking
- Proposal Tracking
- Sales Force Automation
Document Management
- Document Management
E-Business
- Business-2-Business Commerce
- Business-2-Consumer Commerce
- Catalog Management
- E-Invoice
- E-Order
- E-Purchase
Electronic Banking
- Credit Management
- Download Transactions
General Accounting (GL, AP, AR, CM)
- Accounts Payable
- Accounts Receivable
- Bank Reconciliation
- Budgeting/Forecasting
- Cash Management
- General Ledger
- Inter-company Transactions
- Multi-Currency
- Multi-Lingual
-Trial Balance
Inventory
- Bar Coding
- Inventory Transfers
- Lot Expirations
- Multiple Units of Measurement
- Multiple warehouses
- Negative Quantities
- Track Lots
- Track Serial Numbers
- Track Vendor Part Numbers
- Warehouse Management
Manufacturing
- Bill of Materials
- Capacity Requirements Planning
- Discrete Manufacturing
- Engineering Change Notices
- Labor Performance
- Make to Order
- Make to Stock
- Material Requirements Planning
- Process Manufacturing
- Quality Assurance
- Sales Forecasting
- Shop Floor Control
Purchasing
- Change Orders
- Inventory Control
- Purchase Order Processing
- Receiving
- Returns
- Shipment Invoice Matching
Report Writer
- 3rd Party
- On-line Inquiry
- Proprietary
- Web/HTML Reports
Sales Distribution
- Bill of Materials
- Customer Self Service
- Inventory Control
- Invoicing
- Sales Force Management
- Sales Order Processing
- Sales Returns
- Shipping
Supply Chain Management
- Demand Planning
- Replenishment Planning
- Supply Chain Management
- Warehouse Management
In evaluating your need for an ERP system, answer the following:
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How much is the initial outlay for the software, installation expenses and hardware upgrades?
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How much is the ongoing cost (annual licensing, hardware upgrades, internal IT support)?
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How much will you save initially?
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Will the system allow you to grow your business without adding staff?
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Will the system allow your business to operate more efficiently and make you more competitive?
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How long will it take to get the system running?
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Are you and your key managers totally committed to its success or will you back off on the implementation in favor of managing a busy workload?
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Will the software be flexible enough to allow you to manage your business as you have in the past or will you be required to adapt to what they provide?
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Are there more cost-efficient options or services available that are better suited to your business size and needs?
8/2/2006
COST ACCOUNTING & PRICING
Many start-up businesses adopt a market-based only pricing strategy and hope that the resulting income will produce a yield that will put some money in the pockets of the owners.
While a company needs to be competitive, market-based pricing will rarely produce a long-term and consistent result unless management is able to systematically track and control the cost and/or price of its products or services. Assuming that overhead has been properly burdened, a thorough history and analysis of direct labor and material costs should provide answers to the following questions:
- Are raw material costs in line?
- Is labor utilization consistent from run to run?
- Are like products or services running with similar costs?
- Can prices be safely reduced to encourage more business?
- Are there specific circumstances that provide justification for a price increase?
- Does the pricing model for a product or service produce a consistent result?
- Should a product line or service be discontinued?
- Are there product lines or services that should be expanded?
Does your database provide the information you need to ASK, ANSWER & ADDRESS?
DOUG CONTRERAS