Month: May 2022

UI or user interface is of critical importance in any application, as it is the part of the software that the end users interact with all the time.

Obviously, it is also very important that your ERP user interface is as user-friendly as possible too.

A user interface that is not intuitive or user friendly could slow your workflow, and leave employees unhappy – giving them cause to reject the software; and they would be justified, as the slow workflow could lead to backlogs, confusion, and even errors.

There is no need to panic, though.

The user interface is one element of your ERP system that can be customized to be an excellent fit for your requirements.

Ergo, with a little planning and forethought, a user interface can be crafted that can ensure that your workflows are humming along at a decent pace, and organizational productivity remains high.

ALSO READ: Guide on ERP Configuration vs ERP Customization

Things to Consider – Designing ERP User Interface

Let us take a quick look at the most important things to consider when designing the user interface of your ERP system:

1. Speed

Another thing to be borne in mind is the response time – that is, the time the software takes to respond to user inputs and queries, or take the action as requested by the user.

It goes without saying that the software must execute the commands entered by users immediately – there should be no time gap that the user can perceive, in most situations.

It must also be mentioned, however, that while the software aspect is vital, especially database design, the hardware that supports the software – primarily your desktops and servers – also must be capable of facilitating rapid executions of user commands.

ALSO READ:  Important ERP Modules and Functions

An ERP system makes intensive use of the database; databases consume most of the system resources in any software.

Therefore, you need to check the computing power you have in your hardware, the network capacity, and the amount of storage you have, to work out if you need to upgrade any of these elements, and by how much.

If you don’t your productivity may lag, and the money you save on the hardware could turn out to be a lot less than what it costs you when your productivity suffers.

Let us assume that your system is sufficiently quick and your database is well-tuned, then the next thing to look at is your user interface in ERP.

Remember, it is vital that you ensure everything is fast, convenient, and easy for your end-users.

ALSO READ: Guide on How Do ERP Systems Work

2. Avoid Cluttering the Screen

You need to dish out the information to your users in manageable bits.

Make sure you present enough information that prevents them from constantly toggling between screens – but it is just as important that you don’t clutter up the screen.

The maximum number of fields that can be fitted on a standard screen and that can be easily read are five – at the most, six.

The design of the screen should be such that the most important information you want to convey, and the fields you want them to enter information in, stand out and grabs the user’s attention immediately, in a natural up–down flow; more specifically, from the top left to the bottom right.

3. Use of Colours

While colours can help you organize the screen, it is important that you use them with discretion.

A multitude of colours, or very vivid colours can end up distracting the user rather than helping them focus.

Use sober colours, and colour combinations that complement each other rather than clash.

ALSO READ: ERP Trends

4. Graphics

When it comes to graphics for your ERP software interface, you need to make sure that you follow the same rules.

The graphics must be informative rather than distractive, and you certainly should use them minimally.

If you mix different styles, you have to be extremely careful that it does not end up confusing the user and hamper the readability and usability of the interface.

Sticking to a single font, which is legible, is the best thing to do – you can increase the size or make it bold wherever you need to stress a particular point.

ALSO READ: Differences between Conventional ERP and Cloud ERP

5. Attributes

Again, it is best you don’t go overboard with the attributes – the same font in regular, bold, italics – are more than sufficient.

Normally what happens when designing the screens is that logic takes a backseat – it’s efficiency that takes precedence.

After all, the important thing is to help the workflow along, rather than worrying about the logic of what element should go in what place.

Sometimes efficiency can mean repeating some information on more than one screen – it is absolutely okay; you need not worry about it at all.

6. Consistent Design

Consistency of design in your ERP interfaces is crucial.

When you maintain consistent design across screens, it becomes super easy for the user to see that these screens are all part of the same application.

This can comprise things like font, background colours, graphics in corners, and so on.

ALSO READ: Benefits of Mobile ERP

7. Always Test your Design

Even after taking care of all these factors, the software could have some flaws – you cannot be sure that it is ready to be launched into the market.

This is where testing becomes important.

Ask them to use it, and take their feedback?

Are they finding it easy to use?

Are there any aspects they would like to be changed or improved?

Take their suggestions, and incorporate them, as only someone who has used the app will be able to say how efficient or not the application is.

Designing a user-friendly and effective ERP user interface is not that difficult, but it does necessitate some time and effort.

The good news is that you only need to do it once.

Briefly let us encapsulate what we have learnt so far, and what is needed in a good ERP interface, especially if you are upgrading your software or switching over to a new one.

ALSO READ: Top Benefits of Integrating E-Commerce and ERP

8. It Must be Intuitive

When the UI is user-friendly or intuitive, it means that the end users can easily navigate the software by themselves, without any training or necessity of manuals and user guides.

A user interface that is designed well will enable users to explore the software by themselves, and get solutions to their queries swiftly.

This will help build trust in the users, who will enjoy using the app, drastically increasing the adoption rates of the app.

9. Minimalistic Design

As mentioned earlier, minimal use of colours, graphics, and animation should be the norm, to ensure that the commands and functionalities are clearly visible and accessible.

Avoid clutter at all costs.

Colour code if you must, to make it convenient for users to find information that is important.

Good design will help you provide the necessary information without cluttering the user screen.

Good interface design includes thoughtful layouts, fonts, colours, and so on.

ALSO READ: Critical Factors for a Successful ERP Implementation

10. It Should be Configurable

Different employees handle software in their own ways.

Therefore, rather than a one size fits all, your ERP software should enable users to configure their own screens by setting their choices as per their preferences and requirements.

After all, employees from different departments have different requirements, and it is vital that their dashboards reflect that.

11. Responsive Design is Important

Cloud-based ERP software like Tranquil is accessible from any place and at any time.

Your employees can simply log in with their mobile devices.

As your employees are all likely to have completely different devices – tablets, laptops, and smartphones of different sizes and screen resolutions, it is critical that the ERP user interface has to be responsive.

That is, it should be compatible with any screen design that it runs on.

The experience for the user has to be smooth and complete – not with bits of the app hidden or cut off because of the screen size.

While this is challenging, it is a critical aspect of ensuring user-friendly UI.

ALSO READ:  ERP Implementation Questions to Ask

A layout that works perfectly on a laptop may be extremely cumbersome to work with on a smartphone.

Hence, responsive design is extremely important.

Is your current ERP interface cluttered and confusing?

Tranquil ERP presents to you a way out – a neat, minimalist, fast loading, and efficient user interface, and one that can be easily customized to suit your specific business requirements.

Tranquil ERP is a robust and efficient ERP system that can help you achieve your business goals through automation and streamlining of your business processes, and boosting employee productivity. It can help you save time, money, and effort, and positively impact your bottom line, increasing profitability. If you are still unsure of getting on the bandwagon, give us a call to schedule a demo – or shoot us an email. We’ll demonstrate how exactly the interface works, and our representatives will be happy to answer your queries.

 

An ERP solution can help you streamline your activities, be more productive, and stay competitive.

After doing your due diligence and proper research, you finally found the optimal ERP for your company.

Congratulations! But that is just half the battle won.

The implementation is a critical activity, and you need to be well prepared, and do it carefully.

Only then will you be able to get the most out of your investment.

To make sure that your implementation is successful, there are some ERP implementation questions that you must ask your vendor.

An ERP implementation project normally comprises six phases.

Let’s see what they are:

ERP Implementation Phases

1. Approach

Here you begin developing the plan, noting down the participants both internal and external, the required resources, and so on.

You will also have a clear picture about the objectives.

2. Discovery

This is where you do comprehensive research to get all the information regarding the existing processes and systems in your organization and list down the problems you are facing to which you need solutions.

There are some questions to ask about ERP systems before you finalize the software for your company.

3. Design

Armed with the plan and discovery results, you now need to draw up an in-depth functional design, mentioning the way the ERP will facilitate new processes and workflows.

These should be done from the perspective of the end-user.

If you want any customization or integration with third-party apps, it should be mentioned in this phase.

ALSO READ: Tips to Choose the Best Business ERP Software Solution

4. Implementation

Your ERP system is ready and will be tested before actual deployment.

In this stage, employees and other stakeholders need to be trained on its use and educated about the impact the solution will have on their workflows.

5. Monitor

After it is deployed, the ERP needs to be monitored continuously to ensure that it continues to be a good fit for your business and whether any adjustments are required.

6. Evolution

Your ERP implementation is a continuing project that needs to be worked on constantly.

The ERP reports and analytics can help you pick out the areas that need improvements, allowing you to derive maximum benefits from your investment.

Here are some key ERP questions to ask on your implementation journey, that will help you ensure its successful implementation.

ALSO READ: BI vs ERP

Questions to Ask Before ERP Implementations

1. What is My Business Case?

This is one of the most important ERP implementation questions to ask.

A business case depicts the logic for starting a project and gives you the chance to pinpoint the challenges and issues of your business.

It also lets you check out which software solutions and functionalities are required to help you do business better.

During the pandemic, a large number of businesses in the manufacturing and distribution industries were hit by disruptions in the supply chain – especially integrated supply chains that depended on raw material imports.

These businesses explored solutions like eCommerce and ERP integration, to be able to directly deliver to customers. When there is a clear business case, your ERP implementation will be smooth, and you can derive measurable benefits for a long time.

A custom ERP business case allows a company to assess the particular costs, benefits, and risks associated.

Over-customization often leads to ERP failures but with a robust business case, the project team can take informed decisions regarding customization.

2. What is My Digital Appetite?

It is vital that you properly understand the path of digital transformation for your company – without it, you cannot realize the full value of ERP.

Only when you properly understand the current status and have a proper plan can you make high-value decisions that save money, time, and effort.

You will be able to invest in initiatives capable of being supported by your existing tech.

Ask yourself if you are aggressive and are willing to disrupt your current method of working by introducing radically new tech, or just an explorer who is trying out digitization with baby steps.

Knowing the digital maturity level of your organization will give you clarity on achieving your digital goals, and plan for business growth.

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3. Is the ERP Project Team Ready?

This is one of the critical questions to ask for ERP implementation, as it helps eliminate ambiguity and confusion.

Implementation of ERP affects all the departments in the organization, so you need your best employees spearheading the project – those with the requisite skills and understanding of the project.

The implementation team structure should have two levels – the management team and the execution team.

There should be people capable of offering high-level guidance, the project manager in charge of implementing it, and functional and technical teams who will carry out the tasks.

You will also need to change managers.

You need to remember that these employees will be hard-pressed for a time as they will also need to discharge their regular duties.

To reduce their load, consider temporary hires to handle the routine tasks so that your project team can give their 100%.

Make sure that your external resources are experienced and reliable.

4. What is the Total Cost of Ownership?

The TCO includes every expense related to the cost of owning the software, including expenses related to implementing and operating it.

Technical implementation expense is only a part of it – there are hidden costs that you won’t realize initially.

You may have to pay to migrate data, manage risk, test the system, manage the change, cost of downtime, and so on.

It is essential that you clearly understand your budgetary and resource requirements in the long term.

This will help you plan for the finances to go ahead.

5. What is the Implementation Plan?

Of course, your ERP solution provider will draft a project plan to cover the rudimentary activities for implementation.

It is likely though, that the plan may not include some core activities like data migration, managing organizational change, pilot testing, and so on.

Insist with your provider to include this in the plan and carry out these critical tasks?

ALSO READ: Ways to Improve the Procurement Process

6. What Organizational Change Management Strategies to Use?

You may get so busy with the project’s technical aspects that you may ignore the human aspect.

But it is a crucial element, as the success of the implementation, and its ROI depends on your staff being on board with the system.

You need to ensure that your employees are engaged throughout the implementation – that’s part of change management.

This looks at improving processes and workflows, and how they may affect workers; and then works on eliminating the resistance they may feel.

The technique you apply to achieve this could mean the difference between the success and failure of your ERP; so, it is extremely important that you employ the appropriate strategy.

7. What are the Project Governance and Controls Being Used?

The project plan-you draw up must clearly mention the bases on which you will take all your decisions.

Like, when you have an issue, how do you decide whether to settle the matter internally, or escalate it externally – to a steering committee; what factors need to be considered.

The plan must define clearly the core decision-makers and the manner in which they are allowed to wield their influence or power at every phase of the project.

Only when change management is made a top priority can you make sure that your ERP solution will be welcomed whole-heartedly, and sustained by your workforce.

Without that, you are looking at a situation where the employees don’t understand the new system and feel left out, and their productivity drops.

Training, proper communication, and clearly defined procedures are important aspects of change management.

It is imperative that both rank-level employees and managers equally adopt the new system.

You also have to think of how the process changes will affect the end-users in your organization, and make a strategy to deal with those impacts.

ALSO READ: What is Negative Inventory and How Can you Prevent it?

8. How Do We Evaluate Progress?

Rather than blindly forging ahead, it is important to pause and examine the progress of the implementation.

Check if you are right on track, or have wavered anywhere.

Check if there are any elements that need to be rectified to prevent small problems from becoming bigger.

Getting it right is more important than getting it done on time when you think of the long-term consequences.

9. How Will We Define Success?

The definition of success differs from organization to organization.

For some companies, it could mean that their employees have moved over from manual spreadsheets to the new system to create reports; for some, it may be a certain return on the investment; some others may depend on the ERP for their growth story.

Whatever your goals may be, you should be able to define the important areas of improvement, set milestones for them, and quantify them so that they can be measured.

Examples of measurable metrics are staff expenses, or time taken to produce x units; an example of an abstract metric is improving visibility throughout the organization.

That way, you can actually determine how successful or not you have been.

ALSO READ:  Guide on Configure, Price, Quote (CPQ)

At the implementation stage, if you feel that the goals are not clearly defined, get your organization’s stakeholders to help you align IT and business.

The better way is to establish what success means to you before the implementation begins, and communicate those to your project implementation team so that there is no ambiguity as you move forward.

It is a good idea to split the implementation into various phases, with objectives attached to each phase.

This strategy will help you maximize your chances of succeeding.

When there is no proper direction for your ERP implementation, or you don’t establish its scope, you are likely to face huge challenges at a later stage.

Does the thought of implementing an ERP by yourself feel daunting? Leave the nitty-gritty of ERP implementation to Tranquil, the ERP experts. Our ERP consultants will not only draw up a detailed plan to ensure project success, they will keep you in the loop at all times so that you are aware of everything that is being done. Our ERP solution is deployed in the cloud, so it does not call for any extra investment on your part. Do schedule a demo with us at a time of your convenience, where we can show you how our ERP can benefit your business.

 

When E-commerce made its appearance, there were two ways people did business:

• Made unique products themselves to sell in the market
• Purchased stocks in bulk and sold

Both models had multiple inherent drawbacks, and scaling was the hardest challenge they faced.

However, now there is another option called drop shipping.

In this model, you only need to market and sell the products.

Inventory, packaging, shipping – none of these are your headaches.

Of course, you do have competition from some very big names – Amazon, for instance.

But do you know exactly what is dropshipping?

Read our comprehensive guide to get all the information on this business model.

Dropshipping is a model of eCommerce that enables entrepreneurs to start a business online and sell products without stocking the items themselves.

They simply purchase them for third parties and ensure that the products are sent straight to the customer.

This means you don’t have to maintain a physical inventory or handle the fulfilment process yourself.

No warehouse or stocks required means you save money.

It is a low-risk business model which allows businesses to try new product ideas without making huge capital investments.

It’s an accessible method of making in-demand products available to customers who want them; think of it like a retail cloud!

Let’s delve into the finer points of dropshipping – the process, challenges, benefits, and more.

ALSO READ: Common Inventory Management Problems and Solutions

The Dropshipping Process

There are three parties in a dropshipping model: the owner of the products or vendor, the seller of the products or retailer, and lastly, the consumer.

Suppliers store, package, and ship the products while the retailer merely markets and sells them.

The consumer buys from the retailer but receives products from the supplier.

These are the steps involved:

1. Customer Places Order

As in any business, this is the first stage, however, the customer doesn’t know that the seller doesn’t have the products with them.

The customer receives an order confirmation email through eCommerce automation.

2. Seller Passes Order to vendor

The retailer sends all the necessary information to the vendor and pays the cost of the products.

ALSO READ: What is Backordering?

3. Supplier Picks and Ships order

The vendor has all the information required to pick the products from the warehouse, pack them, and forward them to the shipping company.

4. Customer Receives Order

The customer gets an email with an estimated delivery date, and even tracking data.

The transaction is complete once the customer gets the product.

In case of problems with the product, the customer can ask for a refund or exchange.

He contacts the retailer, who in turn informs the vendor, and then the customer can send it back.

What are the Drop Shipping Benefits?

This model offers several benefits like:

• Lower financial investment
• Easy to start – you don’t require a warehouse or bother with handling shipping and returns
• Lower overheads thanks to no inventory and storage
• The business can be started from anywhere in the world
• You get a vast product library

Dropshipping challenges are not complex; here we tackle them one by one.

ALSO READ: Benefits of E-commerce and ERP Integration

How to Make your Dropshipping Business Worth the Investment?

Here are some tips to make money out of your dropshipping business:

Pick your Niche

Dropshipping is highly competitive – so do a proper study of the market.

Check out the competition, the customers, and their needs.

Try to create your own niche within a larger one. For example – instead of normal dresses, you can sell vegan silk dresses or dresses made from recycled fabric.

Exclusivity can help you compete with big businesses.

Marketing is Important

Boost your sales with smart marketing strategies – emails, social media, SEO, online contests – there are tons of things you can do.

Automation tools are also available to increase our eCommerce ROI and reduce your workload.

The Right Software

eCommerce business is tech-reliant; with dropshipping costs being lower, you should invest in robust, scalable software that will help you market your products, build your brand, and boost sales.

ALSO READ: Guide on How Do ERP Systems Work

Set Measurable Goals

Define goals that can be measured in the form of KPIs: conversion rates, cart abandonment, site visits, etc.

Monitor them regularly to see trends and areas to improve, and make smart decisions that will help you grow.

Legal Requirements

These may vary from country to country but the most common ones are likely to be:

• Pay all the taxes as mandated
• Insure your eCommerce business
• Be careful about copyrights and ensure the supplier is trustworthy

Dropshipping Business Ideas

Every business idea is not bound to succeed – same with eCommerce too.

However, you have more room for experimentation thanks to the lower expenses and ease of starting.

Using the right tools can help you avoid losses.

ALSO READ: What is Cross Docking? 

Let’s take a look:

Research Tools

It’s critical that you pick products your target market will be interested in.

Google trends is one such free tool that provides search data and trends insights.

Other tools are also available, and they track sales figures, highlighting trending products and best sellers.

Website/Marketplace

Website quality is absolutely critical for a dropshipping business.

You can either use an eCommerce platform and website builder or make your online store on a current marketplace.

Choose the one you’re comfortable with and capable of leveraging for maximum ROI.

Dropshipping Ideas

Now that you’ve picked your tools, defined KPIs, and checked out demand trends, it’s time to zero in on the dropshipping ideas. Here are some suggestions:

• Fitness equipment and accessories
• Mobile phone accessories
• Groceries
• Health and grooming products
• Snacks and ready to eat foods
• Sunglasses
• Footwear
• Car accessories
• Toys and baby clothes

ALSO READ: What Every Business Should Know About CPQ?

Best Dropshipping Niches

This is the time you need to research the niches that interest you, and which you feel will help you maximize your ROI. Keep these factors in mind:

1. Low Product Turnover

Choose a niche that has products that don’t go out of vogue; you can indulge in short-term trends for a boost in the arm, but don’t make them the main focus.

2. Cross-Selling

Dropshipping depends on bulk selling, meaning that your order value is low on average.

Try to look for a niche that has plenty of chances for cross-selling.

Like if you sell footwear, you can offer socks, shoelaces, shoe shampoo, polish, etc. You can display the cross-sell items in a widget on the footwear page, and increase your chances of selling more per order.

ALSO READ: What is Dead Stock – How Can You Avoid It?

3. Passionate Customers

When you target customers passionate about their preferences, they can become your biggest brand ambassadors.

While many of them will do it by themselves, you can even engage some of them to promote your products and drive more traffic to your site.

4. Quality Products

Strike a balance between profit margin and product quality; poor quality will not let you succeed.

You need to make your customers happy and build trust with quality products.

Now you have to look into products to sell.

Best Dropshipping Products

These will be products that don’t cost you a bomb, yet are of decent quality and can give you sufficient margin.

Here are the product categories we recommend:

Business Products

Remote workers and hybrid office models have become commonplace; this means an increased demand for office products like keyboards, desktop microphones, webcams, stationery items, screen filters, and so on.

Basically, any product that facilitates remote working.

ALSO READ: A Comparison of Sales Orders and Purchase Orders

Subscription Products

Recurring payments mean a steady revenue stream.

Products regularly needed by customers like soap, coffee, and toilet paper – any of these, or a combination of these can be offered as a subscription box for your dropshipping business.

Clothing

Clothing has seasonal demand changes, but you can offer a wide range of options; clothing is a great dropshipping idea that can generate revenue for a long time.

Think of adding your own branding to them to make it more attractive.

Food and Groceries

Food will always be in demand.

Of course, perishable items may not be a good idea, but you can think about products with longer shelf-life, lake packaged snacks, instant or ready-to-cook foods, grains, flours, and so on.

You are almost all set – you just have to find the right vendors.

ALSO READ: How Does Landed Cost Affect the Cost of Inventory?

Finding Dropshipping Suppliers

This is not as easy a task as the previous ones, as vendors are not given to advertising their services much.

But we have a few tricks up our sleeves:

Research

Search through directories for the industry that you have selected, and look for which suppliers have good track records.

In the case of international suppliers, analyze the cost and steps involved with international shipping.

Cold Calling

Start calling your prospective vendors; you can also subscribe to email newsletters – whatever is needed to get information of their service quality and responsiveness.

Those who are good at communicating, are more likely to help you with lead time or stock issues in the future.

Test Their Tech

The reliability of your vendors will decide your chances of making sales, turning a profit, and providing excellent customer service.

Enquire about the software they use for shipping and tracking inventory – possibly a demo.

Make sure they use robust and scalable software.

ALSO READ: What is Negative Inventory and How Can you Prevent it?

Sample Products

Lastly, you need to check the quality of their products, before you enter into an agreement with the vendor.

Ask for free samples, or place a small order – this will help you test his speed and efficiency.

Check the quality of the products when you receive them, and go ahead if you are convinced about the quality.

Starting your Dropshipping Business

This is not a complex process. Make a checklist to ensure you get everything right.

• Complete the necessary paperwork like licenses and permits, with attention to local, regional, national, and international regulations.
• Research your competition – go through their sites, check out their PPC ads, etc. Note what you like and don’t like, and adjust your own strategy.
• Choose a web platform – as we mentioned earlier; select your platform depending on available time, budget, and tech capabilities.
• Make an outline of the vital pages required for your website: landing page, product pages, shopping cart, category pages, and so on. Build your site and make sure to optimize it well.
• Market your site; use paid marketing avenues, leverage social media, send out email newsletters, and so on.

Here are some detail about creating your website:

• Make sure that is intuitive – well structured and easy to navigate
• Choose a scalable eCommerce platform that you can use regularly
• Pick an appropriate domain name – preferably the same as your business, to avoid confusion
• Decide on the site layout and structure at the outset to make it easier for the website developer
• Decide on your pricing model; do you want to have a minimum order quantity? You need to price products competitively and market them well.

ALSO READ: Ways to Improve the Procurement Process

Start Dropshipping

You have everything ready now, and only have to think about payments and costs.

You need flexible payment methods that are secure so that your customers are happy.

Invest in a robust eCommerce payment gateway like the one offered by Tranquil.

Dropshipping Costs

The most common costs you will incur include:

• Cost of setting up our web platform
• Vendor fee – product plus dropshipping
• Marketing expenses
• Overheads like utilities, stationery, office rent if applicable, etc.

That’s it! You’re all set to start making money from your dropshipping business. Here are some last pointers for you:

• Try not to sell what every other person is selling
• Always display your brand conspicuously
• Create simple and easy returns and refund policies
• Don’t expect instant success from dropshipping.

You need robust automation tools to make your dropshipping business successful.

At Tranquil, we have powerful, reliable software that scales with your business. Schedule a demo with us to know more.

 

Inventory is the lifeblood of any business that deals with products, and it is vital that you manage it efficiently for business success and growth.

The challenges of inventory management are several.

The right solution can help you boost profitability and deliver outstanding customer service.

This is regardless of what the inventory location is – one warehouse or several; or even supplier drop-shipping.

Proper management of inventory helps cut costs, enhance cash flow, and ensure continuous production, and fulfilment of customer orders in time.

Partnering with a reputed service provider like Tranquil can mean the difference between chaos and seamlessness.

Staying on top of your inventory will allow you to generate sales, fulfil customer demands, and maintain business continuity.

Let us take a look at the most common inventory management problems and solutions.

ALSO READ: Common ERP Challenges in 2022

Common Inventory Management Problems and Solutions

1. Lack of Inventory Visibility

If you’re unable to locate or identify stocks in your inventory, shipping products on time becomes very difficult, and this can dent your business reputation.

Inventory that is incomplete, difficult to find, or erroneous, is sure to hamper your bottom line.

In fact, the most common reason for delayed, wrong, or partial shipments is the difficulty of locating or identifying inventory in the warehouse.

Receiving in finding the correct stock is critical for ensuring warehouse efficiency, as well as good experiences for the customer.

Solution: Real-time inventory management system

When you implement a real-time inventory management system like Tranquil ERP, you will have all the accurate details regarding location data, and stock availability.

This will help in the easy location of stocks, which ultimately translates to better order fulfilment and customer satisfaction.

ALSO READ: Pipeline Inventory and Decoupling Inventory

2. Inefficient Inventory Management Process or Software

This is probably the most common, and the biggest inventory challenges.

Many businesses still try to manage their inventory with manual procedures, or outdated legacy software – which may stunt your business growth.

It may not seem much of a bother to use manual, labor-intensive, or low-tech systems when you’re a small, one-warehouse business – but that will change when you expand.

When sales volumes balloon, you need to expand inventory and add warehouses.

Old and inefficient inventory management practices will be tough to scale, and prove to be a handicap, and not give you the results you need.

Manual inventory tracking procedures involve either paperwork or tracking procedures across multiple spreadsheets and software, which can lead to data redundancy, incomplete data, and a lot of time spent on it; it also provides less security.

In today’s competitive age, it is essential to know at any point in time, exactly what inventory you have; you can no longer rely on physically counting inventory annually using all your employees.

Another big problem is inventory loss caused by theft, damage, spoilage, and so on; this supply chain issue requires the ability to properly pinpoint, track, and measure the problem areas.

You can scale inventory management software and support complicated logistics, only when you are able to integrate it with your existing business software.

This cannot be achieved with outdated, legacy systems.

Solution: IoT-driven inventory management solution

ALSO READ: What are Backorders and How to Manage or Avoid Them?

An inventory management system that leverages IoT will empower your warehouse staff, and help them manage stocks and track them throughout their time in your warehouse efficiently, and quickly.

You can streamline your inventory management with the right solution, and enhance inventory efficiency.

It’s not just large corporations, but even small businesses that can benefit from a centralized inventory tracking system with integrated accounting features – all of which can be found in Tranquil ERP; it is robust, intuitive, economical, flexible, and scalable.

3. Tracking Obsolete Material

In almost every business, you are likely to face this problem at some time or the other.

There will be some products or materials that remain unsold or unused, and they may become obsolete, or past their expiry date.

These materials or products tend to accumulate over time as they are mostly ignored by inventory managers.

When that product or material is needed sometime in the future, unfortunately, the unsold stock stays forgotten, and new stock is purchased; the older one may remain in the warehouse for so long that it gets damaged completely.

This increases expenses, and material wastage.

Solution: Efficient stock control system

ALSO READ: What is Negative Inventory?

This feature is included in the Inventory management module of Tranquil ERP.

You will be able to locate the dead stock and make proper use of them.

Such a software solution can help inventory managers significantly in controlling stocks.

4. Identifying Incorrectly Located Materials

When there is no proper system to track products, materials, or equipment in the store, it can be cumbersome and time-consuming to find them when you have sales orders.

After all, a warehouse may typically store thousands of products. This can delay sales and make customers unhappy.

Solution: Product finder

All products that you have should be tagged with RFID, barcodes, or QR codes etched with a laser.

This will help your employees identify the products that are needed.

They only need to be equipped with a scanner. Once the scanner finds the required product, a lamp glows, indicating a match.

This helps your pickers to quickly find the product and send it to the sales agents, saving them time, speeding up the sales cycle, and making customers happy.

ALSO READ: Route and Van Sales – Challenges and Opportunities

5. Keeping up with Overstocks

When you purchase new materials with a few unsold products lying in your warehouse, it can affect your profitability.

This situation mostly arises due to the inefficiencies of manual processes, which causes poor control of stock.

Storing too much stock is as bad as storing too little, as overstocking hampers your cash flow and creates problems related to inventory, like storage, or loss.

Solution: Stock audit process

When you implement a stock audit process, inventory managers will be able to audit stocks regularly so that unused stocks are quickly identified.

This boosts the efficiency of inventory greatly, enabling your company to cut costs, eliminate delays, and enhance profitability.

6. Managing Inventory Waste & Defects

Though it may seem small, it is one of the most common and repetitive inventory management problems that can cause huge losses eventually.

To be able to fulfil orders in time, it is essential that you maintain optimal inventory.

Without standard procedures and untrained operators, you could end up with inventory that gets damaged or wasted – and this can not only prove to be very expensive but also lead to dissatisfied customers.

Solution: Modern inventory management software

Tranquil ERP has a robust inventory management module that enables you to manage and control your inventory efficiently.

With streamlining of procedures and processes, your employees will find it easy to perform their jobs, and you can cut costs and eliminate wastage.

ALSO READ: Guide on Procurement Challenges

7. Lack of Centralized Inventory Hub

Stocktaking becomes very challenging when you have inventories in multiple locations.

Discrete stock data from various locations makes shipping complex, resulting in delays.

It’s one of the biggest and continual challenges faced by most businesses today.

Solution: Central inventory system

You can significantly reduce expenses and save a great deal of time by simply creating a centralized inventory hub for your inventory-related data, including stock-taking.

This gives you comprehensive visibility and control of inventory and data in one single location, making stock management simple.

It also becomes much easier to track the inventory that enters and leaves your business premises.

8. Changing Demand

Consumer demand is in a constant state of flux; this makes storing inventory complicated.

How much to store? Too much, and you could end up with dead stock; too little, and you won’t be able to fulfill customer demands.

Solution: Technology to Plan Inventory

What you need is robust inventory forecasting technology that takes into consideration all these factors, and helps you plan your inventory more efficiently.

Tranquil ERP’s inventory management module has the forecast feature that helps create and implement the optimal inventory plan.

This can help you to keep up with fluctuating customer demand.

ALSO READ: ERP Configuration vs. ERP Customization vs. ERP Personalization

9. Supply Chain Complexity

International supply chains are dynamic and can create roadblocks in the management and planning of your inventory.

Manufacturers and distributors are impacted by unforeseen economic booms and slumps which impact raw material prices and availability.

They also decide when, how, and where to ship the inventory – and this means you have lead times that you cannot predict, necessitating you to be much more flexible.

Solution: Robust Inventory Management application

With the right inventory management application implemented in your business, you can predict lead times as close to accuracy as possible, and be better prepared to handle supply chain complexities.

10. Managing Warehouse Space and Efficiency

One of the most challenging tasks for any business is the efficient management of space.

Warehouses need to be planned and designed with the help of inventory management platforms so that you can control when new stock is delivered, and help you make the best use of available space.

If you deal in fragile or perishable products, you need to arrange specialized care and storage – for example, cold storage.

You have to implement specific strategies for expensive inventory, to prevent theft and damage.

Warehouse inventory control is labor-intensive, and necessitates multiple steps like receiving the stocks, putting them away, picking inventory, packing, and finally, shipping.

It is critical that all of these tasks are executed as efficiently as possible.

ALSO READ: What is Business Process Improvement (BPI)?

Solution: Warehouse Management System

Inventory management modules either have warehouse management as a feature or are integrated with warehouse management modules.

This can help you automate many of the tedious tasks and bring in more efficiency in the entire warehouse management of your business.

11. Insufficient Order Management and Poor Production Planning:

Production planning is of critical importance if you don’t want to have a stoppage of production and cause budget overflows.

If you don’t plan it appropriately, your sales forecasts can go haywire, as can your project scheduling.

Thinking that there is sufficient stock, and overselling products is a common challenge faced by many businesses.

Solution: Production planning software

Production planning software makes use of seasonal trends, and historical data to make fairly accurate predictions that help you plan production better.

12. Lack of Expertise and Poor communication

While every business would love to have inventory managers who are excellent communicators and tech-savvy, taking to new technology easily, the truth is that it seldom happens that way.

Merely deploying the most feature-packed ERP system will not cut it if it’s not used properly.

Solution: Proper Training

From the outset, importance should be given to imparting proper training to all those who will use the new system.

It should be especially impressed upon the managers that they need to familiarize themselves with the new system properly.

The different department heads should also be told about the importance of collaboration and sharing data.

Disparate solutions for every process can cause confusion and improper data. A one-stop solution like Tranquil ERP can help you decrease wastage of materials, and attain more efficiencies in your inventory management, and across your organization. Tranquil is a robust, cutting-edge ERP solution deployed in the cloud that helps you maximize your inventory usage. Schedule a demo with us to know how our software works and how it can benefit your business.

 

The PLM system refers to product lifecycle management; this refers to the planned procedure of dealing with the entire journey of a particular product from start to finish.

This includes the ideation at the beginning, followed by its development, service, and finally, disposing of it.

PLM software refers to a digital solution that takes care of all the data and processes at every phase of the lifecycle of a product or service, including information from documents, parts, items, products, quality workflows, engineering change orders, requirements, etc.

Obviously, managing a product throughout its lifecycle is not a new concept.

Only, the way in which it is done has changed now, and we now have cloud PLM. Of course, we are talking about the PLM software that is deployed in the cloud.

ALSO READ: How ERP Can Improve Business Efficiency?

What is PLM on Cloud?

PLM on the cloud is revolutionizing the industry by allowing users to access PLM or product lifecycle management information securely regardless of where they are, at what time it is, and what device they are using.

Cloud PLM allows companies to reduce their time to market for their innovative products.

By streamlining the product development processes, it supports organizations to achieve success in the market.

This explains why organizations of all sizes prefer to switch to cloud solutions for their PLM software.

Cloud product lifecycle management delivers results quicker, adding value to the customer.

Internal teams and partners in the supply chain can design, build, and manufacture products during NPD and NPI phases – new product development and new product introduction.

Manufacturers are especially happy with cloud PLM thanks to the capability addition of completing the product lifecycle and delivering superior quality products within budget and time schedules.

The Rise and Evolution of Cloud Product Lifecycle Management

The term product lifecycle management or PLM emerged sometime in the late 90’s when innovative enterprise software made its entry into the market.

This software concentrated on product development and was created to fill the need for enterprises to keep track of information related to product records like assemblies, items, files, documentation, and more.

It was also a response to fast-tracked design cycles.

Prior to PLM making its appearance, options for managing products were manual or expensive systems that were primarily built to manage CAD files.

When the product lifecycle stages and launch cycles were accelerated, PLM systems came to the fore as a solution for OEMs or original equipment manufacturers to enable them to be more efficient and have better control, thus gaining a competitive advantage.

ALSO READ: Common Inventory Management Mistakes to Avoid

Soon, more companies started outsourcing, which meant that the product design info had to be shared – both with internal teams, as well as with the external supply chain partners.

Only then would it be possible to manufacture and ship products of high quality. Real-time collaboration became a necessity thanks to dispersed teams.

Manufacturing companies had to ensure that all the stakeholders could share information and build a virtual manufacturing prototype.

On cloud, PLM accelerates this collaboration between all the departments and participants – from operations to engineering and quality.

Since cloud PLM solutions can be accessed by anyone with an internet connection, managing complicated product records and engineering change management processes – which are essential elements of effective product development – becomes easy and convenient.

How Cloud PLM Differs from On-premises Solutions

First of all, cloud PLM software systems require lower financial investment to deploy as well as to maintain – thus offering a much lower TCO, or total cost of ownership.

Cloud PLM software also offers enhanced visibility for all teams and improves communication between the companies and their supply chain partners – all the time, improving control and quality.

PLM solutions deployed on the company premises necessitate longer and more expensive system integrations for other solutions like ERP , CRM, EDA, or others.

As the software provider takes complete responsibility for managing the cloud PLM, you don’t have to worry about setting it up or acquiring additional IT resources internally for installation, implementation, and maintenance of the solution.

Consequently, regardless of where the company teams are located in the world, they get to access the newest version of the cloud-based PLM software.

Cloud-based product lifecycle management systems make collaboration among all teams simpler, quicker, and more precise.

The role-based access policy ensures that employees are only able to access the information that is relevant to their jobs, thereby securing the intellectual property of the OEM always.

ALSO READ: What is Batch Tracking?

Benefits of Cloud-based PLM

The cloud-driven PLM systems of today aid companies in streamlining their product development data collection and processes.

Organizations that require their users across the world to be on the move quickly benefit significantly from a cloud deployment of the PLM software, as they can gain access to the product and process data in a risk-free manner.

Cloud PLM:

• Is simple to deploy
• Accelerates innovation
• Offers collaboration in real-time
• Provides the lowest possible TCO of the total cost of ownership
• Collates the whole product record

PLM on the cloud is a future-focused environment that offers numerous benefits, not the least of them being the ability to access the data related to product lifecycle from any device or location.

Onboarding users is super easy as well.

It can help with lowering the need for IT resources, thereby reducing the expenses related to infrastructure.

Combined together, these factors ensure that the benefits from the PLM software are realized faster.

Combining cloud and PLM offers benefits to both small and large companies.

ALSO READ: Important ERP Modules and Functions

Here are some of the benefits in a little detail:

• Cloud PLM is scalable and is capable of expanding to meet changing business requirements like geographical locations, solutions, processes, distribution, and so on.
• Deployment in the cloud enables adopting state-of-the-art innovations across every stage in the product lifecycle, in analytics, security, IoT, and the like.
• Cloud PLM is a SaaS, and it is highly affordable. It requires lesser IT resources, is capable of accelerating deployments, and can quickly connect users throughout not just the enterprise, but also the supply chain as well as the value chain.

The advent of cloud technology has ushered in a new era of IT. It is no longer enough to just operate a PLM system when nearly everybody else is also doing it.

Implementing a PLM is a bare minimum necessity in today’s world. To gain a competitive edge, you need to adopt cloud technology, rather than rely on your servers.

Main Reasons for you to Move your PLM to the Cloud

1. No Infrastructure Costs

On-premise deployments of PLM software necessitate a huge capital outlay, with numerous ranges of high-capacity servers, which are expensive, along with adequate storage space.

Moreover, the entire infrastructure has to be upgraded every now and then.

With a cloud deployment, you can cut down on these expenses significantly.

The cost of the servers in the cloud gets distributed among all the customers of the cloud service provider, making it much more affordable for everyone.

Companies can save up to 40% of their expenses by switching over to cloud solutions.

ALSO READ: Ways to Improve the Procurement Process

2. Quick Deployment

When you’re trying to get your product to market, you want it to happen as fast as possible.

A day delayed, is simply adding to the cost of your production.

Deploying a custom-built product lifecycle management system can take several weeks, sometimes even months.

However, a cloud-based PLM can be deployed in two days or even less.

Once you complete your purchase order, you will get your licenses in 48 hours, ready to be used on your existing devices.

3. Immediate Scalability

The workload can fluctuate for any company, big or small.

When you have big projects, you have to have every available person on the job – you may even end up hiring external contractors on a temporary basis to fulfil the orders.

You may need additional licenses for the software solutions you are using.

This could mean adding more servers.

That is fine as long as the workload is high.

What if it drops? You have servers sitting idle, and you are paying for a lot of resources that you are not actually using.

With PLM on cloud, you only subscribe to the services you need.

You can simply add more users when business is roaring, and remove them when things are quiet.

Basically, you only have to pay for what you need and use.

ALSO READ: Route and Van Sales – Challenges and Opportunities

4. Always Updated

Technology is always advancing – and that includes PLM software.

When you have deployed a PLM solution with a perpetual license on the premises, updating them becomes very expensive, cumbersome, and time-consuming – not to mention the additional human resources and IT resources that you may need.

Not updating could mean losing your competitive edge; striking a balance between your cost and benefits is critical.

This could put you in a quandary, as taking a decision about upgrades is not something to be taken lightly.

Cloud-based PLM solutions generally include software updates in the subscription costs.

Moreover, it is the software provider’s responsibility to provide the upgrades, so you don’t have to bother about them at all.

Updates are regularly provided, and as they all happen in the cloud, everyone can always access the latest version of the software.

5. Remote Working

Cloud solutions allow you to log in and access the required information from anywhere, at any time, and from any device – and that too, in a secure manner.

On-premise servers can also be accessed remotely; however, for the sake of data security, you need to use VPNs, and this tends to slow down the application.

It is not a practical solution; if you want to facilitate remote working, cloud adoption is your best bet.

This applies not just to employees, but also to external collaborators.

IT departments may not be comfortable about providing complete network access to suppliers over concerns about firewall security.

ALSO READ: What are Backorders and How to Manage or Avoid Them?

6. Reduced Support Costs

Over half of a normal IT budget goes to maintenance.

You could use that money better – say to improve processes, create custom apps, and enable users to get the most out of their IT.

When you move to the cloud, maintenance is no longer your headache.

This frees your IT staff to think out of the box. This eventually translates to greater ROI on your IT.

7. Predictable Expenditure

Thanks to the subscription models followed by providers of cloud-based PLM software, you can know exactly how much you are spending each month.

No matter what happens, you pay the same amount every month – except of course, if you have to add additional users, or similar.

Even so, you know exactly what you are going to pay.

There is no surprise or hidden charges.

You don’t have to worry about upgrades, server expenses, or repairs.

Cloud providers usually have backup servers, so you don’t have to worry about losing your data in the event of breakdowns or downtimes.

Are you ready to move your PLM to the cloud? Talk to us at Tranquil – the cloud experts! If you would like to see the software in action, schedule a demo at your convenience, and we will show you how it can benefit your business.

 

Both these terms are associated with buying goods and services, and often they are used interchangeably.

Especially if you are a layperson, you are quite likely to think they are one and the same activity.

You may be surprised to know, however, that they are two distinct terms; someone involved in the procurement function of an organization will be aware of the difference, and you can expect to get a list of differences.

The two terms differ in several ways: the employees or personnel involved, the intention, tasks covered, and most importantly, what each accomplishes.

The main difference between procurement and purchasing is that one is a transactional process, and the other is strategic.

This is in spite of the fact that the core function in both is that of finding and obtaining goods and services.

Procurement is more strategic in nature.

The whole process, if you look at it, is all about strategy: research, negotiating, planning, and so on.

Purchasing, on the other hand, focuses solely on the way in which goods and services are ordered and purchased, like generating purchase orders, making payments, and so on.

Therefore, you can say that procurement and purchase are two distinct business processes that is both connected to the sourcing and acquiring of products and services, and are important aspects of the department of procurement.

Unfortunately, some companies are still not aware of procurement purchasing difference and use purchase and procurement interchangeably.

However, not knowing how these terms differ can cause you to ignore certain factors which can negatively impact your profitability.

Without much further ado, let’s take a deeper look at purchasing vs procurement, and see and understand how exactly the two terms are different from each other.

ALSO READ: Ways to Improve the Procurement Process

What is Procurement?

Procurement can be defined as the process where you recognise, shortlist, choose, and then obtain goods and services from a supplier.

This could be through competitive bids, direct purchase, or via a process of submitting tenders.

Delivery of the specified quantity and quality, and at the specified time is also ensured.

In short, procurement is about making smart choices to ensure that you get the best goods and services at the best prices.

From start to finish, we can enumerate the process of procurement as below:

• Conducting market surveys
• Identifying potential vendors
• Drawing up a list of approved suppliers
• Recognizing the needs of the organization internally
• Generating an online purchase order
• Asking for proposals
• Studying and assessing the quotations received
• Choosing the optimal vendor and conducting negotiations
• Taking delivery of the goods
• Conducting quality checks
• Creating and managing contracts
• Approving invoices and completing payment for goods and services received
• Building long-term relationships with vendors

ALSO READ: Guide on How Do ERP Systems Work

What is Purchasing?

Purchasing refers to all the functions related to obtaining the products and services required by a company.

While procurement can be considered the broader function, the purchase can be thought of a smaller subset of that function.

The purchase involves elements like placing orders, expediting them, receiving the delivery, and making the payment.

We can list the steps involved in the purchase process below:

• Getting a purchase requisition
• Inviting proposals from vendors
• Studying and assessing the quotations received
• Sending the purchase orders officially
• Taking delivery of goods and services
• Scrutiny of the quality of goods and services delivered
• Making payments to the vendors

ALSO READ: What is Dead Stock – How Can You Avoid It?

Differences and Similarities between Procurement and Purchasing

Now that we have seen what is involved in procurement and what purchasing is all about, let us see the exact ways in which they differ and how they are similar to each other too.

If we had to talk about similarities between procurement and purchasing, we could say that both eventually are about acquiring goods and services for an organization.

The end result of both procurement and purchase is getting delivery of goods and services for your business.

We have already seen that both are processes executed in the process of obtaining products and services for a company, but they differ in their method and approach.

ALSO READ: Route and Van Sales – Challenges and Opportunities

First, let us see what is the difference between procurement and purchasing:

Procurement

• Includes a whole suite of activities connected to the acquisition of products and services
• Involves several steps taken prior to purchase, during the purchase, and after it is completed
• It’s an internal process that is used primarily in a production environment
• Focuses more on the value of an item rather than its cost
• Includes a set of tasks that notices and realizes requirements
• The process comprises recognizing needs, sourcing, and closing contracts
• It employs a proactive approach to identify and satisfy requirements
• It is relational in nature and concentrates on building relationships with vendors for the long term
• Concentrates on other long-term aims like gaining a competitive edge or ensuring a good fit with corporate aims

ALSO READ: What is P2P (Procure to Pay) Process?

Purchasing

• Includes all activities connected to purchasing goods and services
• It’s an external process that is mainly implemented in a wholesale environment
• It is simply a straightforward activity of purchasing goods and services, nothing else
• Considers the price of the item more important than its value
• It refers to the particular task of earmarking the expenditure
• Implements a reactive approach to fulfil internal requirements
• A transactional activity that places more importance on transactions rather than building relationships with suppliers
• Concentrates on achieving short-term goals like ensuring the correct quantity, expected quality, the agreed cost, at the correct time, and specified place.

Procurement and Purchasing Automation

Within an organization, the processes of purchase and procurement may be interchanged; obtaining goods and services for your organization can include multiple departments, mountains of paperwork, and numerous decision-makers.

Now, this can lead to the creation of bottlenecks in the process and hamper the speed of making decisions, rendering the procurement process complex and confusing.

Today, more and more organizations are turning to procurement software so that they can maintain supplier management efficiently, to access critical management easily and manage it properly, and get an overall view of projects and negotiations.

Automating the procurement functions can enable purchasing and procurement teams to improve the acquisition process for goods and services.

This is achieved by eliminating manual data entry, and avoiding errors, reputations, enhancing the process of approval workflows and improving the report generation process as well.

Automation of important activities will enable you to improve the visibility of critical information and help management in making decisions.

By automating procurement, employees can be freed from mundane activities to focus on core business tasks. And add more value within businesses, like creating strategies for procurement and forging robust relationships with vendors.

ALSO READ: Challenges in Procurement and Supply Chain

Here are some examples of procurement automation scenarios:

• Integrating procurement software with systems like ERP, WMS, accounting, or other systems
• Automation of RFQs for when the level of inventory touches the points for replenishing
• Email or SMS notifications for automated stock reordering
• Automated generation and distribution of purchase orders
• Automatic emails for confirming orders
• Integrating EDI

Procurement or Purchasing, Who is the Winner?

Well, there is no winner as such if we had to decide between procurement and purchasing.

Every organization needs to decide which approach to use based on their specific business needs.

But generally speaking, purchasing may be a better option for small businesses as it is less complex and simpler.

However, enterprises would do well to implement a full-scale procurement process and have it as an important part of their corporate strategy.

Regardless of which approach you to decide on, remember that manual methods like using word documents, spreadsheets, paper forms, etc. are likely to create a lot of confusion.

Implementing a cloud-based procurement software like the one from Tranquil will help you improve productivity and streamline your procurement and purchase processes.

The Impact of an e-procurement Solution

However you look at it – purchase of procuring – there are multiple stakeholders that are involved in the process: from the employees in various departments (internal), to suppliers and contract negotiators (external).

Regardless of the differences between the two processes we discussed above, both processes necessitate extensive documentation and include numerous steps.

While one purchase cycle may last a few weeks, an entire procurement cycle may last for months.

It may even be repeated in case the organization does not receive an appropriate bid. In the event both are carried out manually, the efficiency factor will definitely be lacking, and lead to delays.

For example, documents have to revise, each bid has to be scrutinized, and all the invoices need to be reviewed; manually doing these activities will definitely take a long time.

However, if you have a robust digital solution for procure to pay, your organization will be able to record and save all the files related to purchase and procurement in a central database.

Procurement software from Tranquil can help you by automating tasks, and making the whole process easier and more efficient – something that a manual system will not be able to do.

ALSO READ: A Detailed Guide to Batch Tracking

If you have not automated your procurement or purchase process, perhaps it’s time to do so now. Or perhaps you are looking to revamp your purchase process. In either case, Tranquil can be your ideal partner in your digital transformation journey. Our procurement software can empower your procurement team by enabling them to build a smooth end-to-end procurement process. If you’re not sure how it will work for your organization, do schedule a demo at your convenience, and we will explain everything.

 

ERP software has been helping companies across the world streamline their business processes and boost productivity for decades.

Implementing an ERP system is an absolute necessity in today’s competitive business scenario.

It is definitely not an option anymore.

It goes without saying that a lot of careful thought goes into the decision of which ERP solution to purchase.

After all, there are numerous vendors in the market today.

Businesses have to consider their budget, and also whether the ERP software has all the features and modules that they require to operate their business successfully.

Sometimes, the ERP may have modules that your business doesn’t require; for example, a retail business does not need a production module, and so on.

There are several terms one often hears in the context of ERP – like ERP implementation, ERP customization, ERP configuration, and ERP personalization.

ERP implementation is something almost everyone knows to be the process of deploying the software – it can be deployed on the customer premises, that is on the servers at the customer’s place of business, or in the cloud.

Implementation also includes providing training to the customer’s employees on how to use the software.

But not everyone is aware of the actual difference between these three terms.

Often, people use the terms customization and configuration interchangeably, though they are not the same.

Personalization is probably the least used of the three terms, though some people confuse it with customization.

So, without creating more confusion, let us take an in-depth look at all three terms and what they really mean, and which one is best for your company.

ALSO READ: Future ERP Trends

What is ERP Configuration?

Whichever ERP solution you choose, it is likely to have a host of options and settings.

Now these have to be properly configured and deployed so that your business gets the most out of it.

Configuring the system needs to be done carefully, keeping all details in mind.

This is because certain ERP system configuration choices cannot be changed once you set them.

Several configurations work in tandem with other configurations, though it may not seem on the surface that they are related.

When you configure your ERP system, you create transaction defaults that could set a limit on the range of transactions you can possibly execute.

For example, you can configure if you want to allow negative inventory or not.

How is this helpful for businesses?

Well, if you prevent negative inventory, it may bring your transactions to a halt, giving you the time to identify and rectify the inventory level error before the customer completes the transaction.

You could say that ERP configuration is something that has to be done – it is mandatory.

ALSO READ: ERP vs CRM

What is ERP Customization?

ERP system customization refers to the modifications made in the original code of the software solution.

This is done to add functionality and features to the software that your business needs specifically.

Customization of the software can be performed without changing the original functionality in any manner.

It must be remembered however, that customizing ERP software can cause problems.

There is a certain risk of failure.

The software is already designed to function at its best, so when you tweak it, there is a chance that it may malfunction.

Of course, you can rectify any deficiencies the solution may have, and also make sure that it is aligned to your requirements.

But customization sometimes could mean going away from best practices.

ALSO READ: What Every Business Should Know About CPQ?

If you want to customize the software, you need to know the code and have expertise in coding, otherwise it may not work properly.

The original code rules will have to be followed, or the information entered in transactions that have been customized, is likely to get corrupted.

Other data prior to or following the customized transaction is also in risk of corruption.

That is why we would recommend that if you need any customization, to allow us to handle it.

Most ERP systems are very flexible, and are capable of handling the requirements of a wide range of businesses; which means you may not need ERP customization.

In short, it is entirely optional.

What is ERP Personalization?

ERP Personalization is going even further than configuration and customization.

Personalization actually begins with configuration, and moves on to customization – and the last step is personalization.

It is merely the process of making adjustments in the software to ensure that it is a perfect fit for the customer’s requirements.

Whatever is relevant and has meaning for your business, like charts, metrics, reports, and so on – whatever is required for your business to succeed and grow.

ALSO READ: Ways to Improve the Procurement Process

ERP Customization and Configuration Examples

Let us take a look at some specific ERP implementation activities, and into which category they fall.

Configuration

• Creating company-specific roles
• Changing field labels using internal terminology
• Developing organization-specific BI
• Changing current reports to mirror the business requirements
• Alteration in current interfaces to echo the needs of the business – this includes changing the flow of field entry or concealing fields and so on
• Adding fields unique to the business, and adding specific tables to collect important business data that does not affect the handling of calculations and transactions
• Some integrations
• Some automation

Customization

• Extensions
• Certain integrations
• Certain automations
• Creating new functionalities for modules that already exist
• Developing additional solution functionalities for certain business requirements, current modules not withstanding
• Developing data exports
• Developing integration points to import data
• Creating Business Process Automation or workflow development
• Altering solution process to add or delete steps according the specific needs of the business
• Adding fields or tables to use in process automation and performance of calculations

ALSO READ: ERP Software to Enhance your Purchase Management

ERP Configuration Can Diminish Those Risks:

Configuring your ERP system means using the original code that was written for the whole software.

Whenever a bug fix or improvement needs to be made, developers will upgrade the code.

If you had made any customization to your ERP solution, there is every chance that the customization will not work after the software is upgraded.

In some cases, the customization can even lead to your entire ERP to collapse or malfunction, as some code conflict may arise.

Configuration is not like customization.

It is a permanent thing, and the settings can stay put for years on end.

They need not be changed even when the business grows and expands.

You will not have to worry about whether the ERP software practices will get invalidated – unlike when you do customization.

ALSO READ: What is P2P (Procure to Pay) Process? 

What is Better? ERP Configuration, ERP Customization or ERP Personalization?

While ERP system configuration is less risky, ERP customization is tailored to be a perfect fit for your business requirements.

And as we saw above, ERP personalization is even beyond these two.

You may be surprised to know that in spite of that, personalization is not as invasive, and will not case problems when the software is updated.

In fact, it can often be carried out at the user level as they are easy to execute.

To Sum Up

At Tranquil, we have crafted a versatile and flexible ERP solution that is suitable for a wide range of industries, and businesses of all sizes. Additionally, we can customize the software to make sure that it aligns with your business needs. If you want additional functionality, whether within your existing modules or otherwise. We can perform integrations with your existing software, payment gateways, and more. Our solution is scalable, and it can easily accommodate extra workload that comes with the addition of new locations, products, more employees, and so on.

We can perform the customization at our end before we deploy the solution for you, so that you don’t have to face the problems of non-working customizations following software updates. Allow us to handle the software while you focus on your core business activities to grow your business.

ALSO READ: Challenges in Procurement and Supply Chain

Tranquil offers you the opportunity to personalize your experience of using the software, so that you get access to information that you want, in the manner you want to see it and in the place you want to see it.

As it is deployed in the cloud, you will face little to no business disruption either. Everything happens quickly and smoothly.

Do you have an ERP software implemented for your business? If not, it is imperative that you consider purchasing one right away. If you are using an ERP solution, we would like to ask you:

• Are you able to save time and money with your ERP?
• How long ago was the last update?
• Is your ERP scalable?
• Is it deployed in the cloud?
• How easy is the ERP software to use?
• Are you able to integrate your other software solutions with this ERP?

If most of your answers are No, perhaps it’s time to change your ERP software. We would like to show you how our ERP solution works.

Book a demo at a date and time of your convenience, and we will be happy to explain its working, and how Tranquil ERP is better than your current one. We can also demonstrate how we configure and customize the software so that the solution is a perfect fit for your business. Our team will be at hand to answer any question you may have.

 

The procure-to-pay process can become complicated if you are using outdated software.

Not only are they fragmented, they are also rigid, more expensive, and less efficient compared to state-of-the-art software.

Quite a few of the companies don’t even have that, and use manual tools to manage the procure to pay process.

Some other businesses simply integrate their accounting software of ERP with the procurement module – and while this will do the job, it’s not the ideal solution.

By not using any software, or using obsolete software can significantly hamper your bottom line.

Without digital, you will not have a competitive edge in today’s business scenario.

To beat your competitors, it is imperative that you adopt digital.

What is the Procure-to-Pay Process?

Procure to pay, abbreviated as P2P, is simply the set of steps carried out to fulfil the need for products or services economically and quickly.

There are numerous steps involved in the process, and they must be carried out in the right sequence.

Of course, depending on the type of company and the exact requirement you have, you can of course, customize the flow to a certain extent; however, there are some basic steps in the P2P process, which is similar to what we mention below:

ALSO READ:  Ways to Improve the Procurement Process

Step 1: Identification of Requirements

It begins here.

The very first step in the procure to pay process is identifying and defining what the business needs, by taking the help of stakeholders across departments and functions.

After identifying appropriate requirements, the procurement departments draw up documents like SOWs (statements of work), and TORs or terms of reference for services, and high-level specifications for items or goods.

Step 2: Creation of Requisitions

Once the relevant documents have been finalized and generated, the procurement department creates an official purchase requisition.

The relevant employee makes sure that all the essential administrative guidelines are fulfilled, and fills in and submits the purchase requisition form.

From routine purchases to consignments or sub-contracts, requisition employees in the purchase department can create requisitions for all procurement.

ALSO READ: What is a POS System?

Step 3: Approval of Purchase Requisition

Once the purchase requisitions are submitted to the department head or procurement officers, they review them, and approve or reject a requisition.

The approval or rejection is done after considering several factors like assessing the requirement, checking whether it is within the company’s budget, and ensuring that the purchase requisition form is valid.

If the form is incomplete or erroneous in any way, it is usually rejected, and sent back to the person who generated the requisition so that it can be corrected and submitted again.

Step 4: Creating a Purchase Order or Spot Buy

Spot buys are carried out if the products requested are unique, one-off purchases, are low in value, or have features like unmanaged category purchases.

For all other products, the relevant officials use the approved purchase requisitions to create purchase orders.

ALSO READ: What is CPQ?

Step 5: Approval of Purchase Order

To make sure that the specifications in the orders are accurate and valid, the purchase orders have to go through an approval process.

Once the management is satisfied that the order is proper, it is sent to the relevant vendors.

The suppliers may either straight away reject or approve a purchase order, or they may want to negotiate terms.

Once the purchase order is formally approved by the vendor, it becomes a legally binding contract.

Step 6: Receipt of Goods

After the vendor delivers the goods or services as per the purchase order, the buyer or their representative examines the goods or services delivered to make sure that it as per the specifications of the contract.

If it is as expected, they will approve the goods receipt, and if not, they reject it.

They will cite the reasons – like not as per the quality, quantity or standards as specified in the purchase order, and so on.

ALSO READ: Why is Cycle Stock Important for Your Business?

Step 7: Performance of the Supplier

The company assesses the performance of the supplier, basing it on the information received from the previous step.

The relevant officials look at several factors like product or service quality, punctuality of the delivery, adherence to contract specifications, supplier responsiveness, and TCO or the total cost of ownership.

If any vendor has fallen behind in performance, it is recorded in the system so that the company can be aware of it in the future when they have to place orders.

Step 8: Approval of Invoice

On approval of a goods receipt, the details in the purchase order are verified against the goods receipt as well as the vendor invoice, to make sure that everything is as per the specifications.

If any discrepancies are detected, the invoice is rejected and sent back to the vendor, stating the reason for the rejection.

If everything is accurate, the relevant employees approve the invoice and send it to the finance or accounts team so that the payment can be sent to the vendor.

ALSO READ: What are the Benefits of e-invoicing for your Business?

Step 9: Making Payment to the Vendor

Once the finance department receives the invoice that is approved, they process the payments as per the terms set out in the contract.

They will also consider changes made to the contract, and then direct the relevant employee to disburse the payment.

The payment could be in full or partial, made in installments, retention payments, made in advance, or in progress.

Procure-to-Pay Cycle KPIs or Key Performance Indicators

Every business is unique; however, the fundamental metrics used to evaluate the P2P process are more or less similar.

The most commonly used ones are mentioned below:

• Cycle time of purchase orders
• Cost of processing purchase orders
• Lead time
• Time for processing invoices
• Cost for processing invoice
• Rate of first-time matches
• Average time taken for invoice approval
• Discounts received
• Savings realised

ALSO READ: What is Backordering? How to Manage or Avoid it?

Best Practices to Follow in the Procure-to-Pay Process

As per industry experts, the following are the best practices that can help businesses to be more efficient in their P2P process:

• Deploying procure to pay software solution
• Ensuring transparency throughout the process
• Enhancing engagement with suppliers
• Inventory optimization
• Streamlining of contract management

How can Procure-to-Pay Software Improve Procurement Efficiency?

Reports say that nearly 50% of businesses globally have a procure to pay suite implemented, most of them cloud-based.

As companies become more aware about the advantages offered by procurement software – especially cost savings, these tools are becoming more popular by the day.

ALSO READ: What is Business Process Improvement (BPI)?

Here are some of the ways in which P2P software increases efficiency in procurement:

1. Purchase Requisition and Approvals

With a procure to pay software implemented, the request for purchase is sent to every stakeholder and approval in the correct order. This eliminates the need for unnecessary email threads.

2. Purchase Order Management

A majority of the P2P solutions automatically generate purchase orders from the purchase requisitions that were approved, and also trigger the purchase order dispatch process.

The software can handle everything whether it is sending several orders to the same vendor, or generating multiple purchase orders from a single requisition.

ALSO READ: Comparison of Sales Orders and Purchase Orders

3. Digitalised Vendor Management

Digitizing your vendor management will bring a sea change into the way your procurement team measures and rates performance of suppliers.

With the right P2P software, it becomes very simple to select the ideal supplier, depending on factors like pricing, adherence to policy, discounts, performance, timely deliveries, and so on.

4. Invoice Matching

Robust procure to pay tools verify the invoice against purchase orders and good receipt to ensure everything is in order, and that the purchase is executed properly.

They also integrate with electronic payments and accounting systems, manage exceptions, and approve invoices after checking.

5. Insights into Purchasing

Perhaps the biggest advantage of automating your P2P process is the reports and data analytics that you get access to.

It gives companies insights into what works and what doesn’t, giving total transparency into the entire process from start to finish.

This allows you to extract status of all tasks and analyse the supplier performance KPIs, and get customized reports and analysis.

Procure-to-pay solutions offer businesses savings opportunities that they never thought possible by connecting companies, vendors, processes, and policies digitally.

They eliminate the need for manual data entry, enhance spend visibility, and provide many other benefits.

In short, automated software for procure to pay, plugs the gaps found in existing processes.

ALSO READ: How Does Landed Cost Affect the Cost of Inventory?

Challenges In the Procure-To-Pay Process

The whole procure to pay process includes multiple individual processes that occur across various parts of the organization involving a number of people.

This makes it complex and often confusing – more so when you have a manual, paper-based process.

These are the challenges faced in the process:

Disparate Systems

Every department in a business usually has its own system, and this can make it difficult to consolidate data.

Procurement and accounts payable are two separate functions with their own priorities, systems, and policies.

Without a uniform system or policy, the procure to pay process can become inefficient and riddled with errors.

ALSO READ: What is Negative Inventory?

Non-Compliance with Policy

Both procurement and accounts payable departments have separate responsibilities.

Negotiating prices and discounts is the job of the procurement department, and the accounts payable department has to ensure that they comply with the terms of the negotiation.

It is easy to get everyone on the same page when you have the right software.

Without it, there are many chances for non-compliance and it can prove to be very expensive indeed.

Lack of Visibility

When businesses use disparate systems, information is siloed, and many employees may not be able to access information they need across the procure to pay cycle.

Often the available information is incomplete or inaccurate.

Without proper visibility into suppliers and spend patters, the ability of business owners and managers to make informed, strategic decisions is heavily impaired.

ALSO READ: Challenges Facing Purchasing and Supply Management

Conclusion

The right procure to pay software can help you digitize the entire cycle from start to finish, bringing improvement across the entire purchase process. Maximum benefits out of the P2P process flow by leveraging digital forms, smooth workflows, smart processes, detailed analytics, and cloud technology. From creating purchase requisitions right up to payments, the software can handle everything efficiently. Also integrate it seamlessly with any accounting software you have implemented.

At Tranquil we have our own robust ERP system that can help boost the overall productivity and efficiency of your organization.To see for yourself how our software works and how it can benefit your organization, do schedule a demo with us at a time of your convenience.

 

We can agree that for efficient and transparent business operations, it is imperative that you manage your inventory properly.

Unfortunately, several businesses make inventory management mistakes and end up spending too much time, money and effort.

All is not lost!

You just need to be aware of the mistakes, understand them, and be prepared to rectify them before they cause too much damage.

Most of the mistakes occur because of a lack of automation.

Tranquil is a robust ERP solution that helps you streamline your inventory management and save you considerable effort and expenditure.

ERP system helps increase employee productivity, implement more efficient workflows, improves relationships with vendors, customers, and other stakeholders, and delivers better forecasts.

Additionally, by being proactive, and with a little foresight, you may even be able to avoid making these mistakes altogether.

Common Inventory Management Mistakes

1) Outdated or Incomplete Product Catalogue

This is one of the worst inventory mistakes you can make.

It is essential that you centralize the company’s product catalogue using some software tool.

This should include important information that helps inventory management.

In the absence of a proper catalogue that has information about not just active products, but also obsolete ones, your inventory management won’t be thorough.

It is the basic document that aids inventory management and helps you gain efficiency.

Make sure the document includes the following info:

• Product Tree with categories and type
• Product name and status
• Buying price
• Sale price – both catalogue and actual
• Sales for the past year, month, and week in both monetary and unit terms
• Profit margin
• Minimum quantity for order
• Lead time of supplier
• Stock level at present
• Average stock coverage
• Product expiry date
• Future sales forecast
• Product images
• Average stock in the past

ALSO READ: ERP in Accounting and Financial Management

2) Not Measuring Supply Chain Metrics Properly

It is absolutely vital that you properly assess the performance of your supply chain as well as inventory management.

The best way to do this is by measuring two KPIs – life expectancy of stock and customer availability rate.

If your business manages huge quantities, add a couple more like inventory turnover and on-time delivery.

However, we recommend that you don’t measure too many indicators and over-complicate the situation.

Two of the most important goals of inventory management is ensuring sufficient availability of products for customers, and keeping carrying costs to a minimum.

3) Not Focusing on the Total Cost of Ownership

Most businesses focus solely on the purchase price and look for suppliers willing to sell at the lowest cost.

That ploy could backfire, however, as you may incur other costs – like transportation, higher insurance, warehousing costs, and so on.

All these costs add up to make the total cost of ownership.

Therefore, in addition to the purchase price, you must consider the following factors too:

• Purchase price
• Minimum order quantity
• Supplier lead time
• Quality of products
• Reliability of supplier
• Service
• Payment lead time
• Supplier flexibility
• Product shelf life
• Sales forecast accuracy

While some of these criteria can be measured easily, many others cannot be – for example, reliability, flexibility etc.

However, you still need a full cost approach in the early stages at least.

If you find it difficult to choose between two vendors, go with the one that prioritizes customer satisfaction.

ALSO READ: What is Cross Docking?

4) Manual Inventory Management

Some people want to micro-manage everything, and that includes managing inventory manually 0 big mistakes!

Human effort is prone to errors, and you may end up placing orders for more quantities than necessary, for fear of getting stocked out or ordering too less to save on holding costs.

Ordering too much may cause you to have deadstock, and bear huge carrying costs.

Order too little, and you risk not being able to fulfil customer orders.

Not only will you lose those sales, you may lose the customers as well.

They may prefer taking their business elsewhere if they feel they are more likely to face disappointment when they place orders with your company.

There is an inadequate rationale behind these decisions as there is not enough time to analyse them properly.

However, with inventory management software from Tranquil, you will be able to manage orders efficiently.

One thing must be remembered, though: there are always unforeseen events and the software is not as capable of making quick decisions as to the human brain.

Ergo, it is recommended that you do not automate your orders 100% – leave a small percentage for manual ordering so that you only manage exceptional situations.

This allows you to focus on more value-adding activities like customer service and employee satisfaction.

ALSO READ: What is Negative Inventory and How Can you Prevent it?

5) Too Many Storage Sites

Reserves, stores, warehouses – all of these are storage points, and the more of them you use for the same product, the more your inventory increases.

Having stock reserve apart from shelf stock itself can increase your total inventory by up to 50%.

This happens because:

• Total stock is not displayed
• Erroneous stock distribution in shortage situations
• Storage units are usually more than a single piece, and it automatically raises stock coverage on all storage points.
• More chances of error due to increased complexity of managing inventory through more storage points.
  The best way to avoid this mistake is to centralize your inventory to the maximum and only decentralize those products that have long lead times, are highly volatile, or cost more to transport.

ALSO READ: What is Business Process Improvement (BPI)?

6) Have the Same Stock Coverage on all Products

Many businesses make this very costly inventory mistake.

Let’s take the example of a garment store.

Stocking an equal number of size L and size XS or 5XL shirts is a mistake!

Size L is very common and likely to get sold out fast. Whereas, both extra small and 5XL are extreme sizes with low demand.

It also holds true for colours.

You should stock a greater number of garments in fast-moving colours and fewer colour variants that sell slowly.

You need to know exactly what colours, sizes, variants etc. are quick sellers.

Perform an ABC analysis at the tiniest level to help in this.

Pinpoint profitable and risky references, or use the margin level.

Your stock coverage should depend on this.

You can use an Excel formula, or our ERP will help you to arrive at the ideal stock coverage.

ALSO READ: Tips For Efficient Stocktaking

7) Lack of Training

Merely implementing an ERP system to achieve efficiency in inventory management won’t be enough if your employees don’t know how to use it properly.

The same goes for whatever manual systems you run.

It is imperative that your employees are properly trained on the systems in your company so that there is no scope for confusion or error.

8) Poor Warehouse Design

You may not have thought so, but the size, design, and layout of your warehouse are all extremely important.

The space should be sufficient enough to stock all you need, but not so large that you have a lot of empty space lying around.

The stock should be logically stored – separate areas for static and dynamic stock.

The dynamic stock or forward pick area of the warehouse is where employees pick orders as they receive them.

This area is likely to have several types of racks to bring down picking time so that orders can be fulfilled speedily.

ALSO READ: ERP software in Warehouse & Fixed Asset Management

Static stock on the other hand is likely to have stock with fixed locations, overflow of dynamic storage, and possibly some empty space too.

After optimizing your warehouse layout, organize it properly and maintain it as such; implement systems for all processes.

Maximize your warehouse space, and make storage easy.

Every product or category should have a designated area and should be properly labelled.

It makes sense to have your fast-selling stock in a highly accessible area, but don’t push the slow stock too far back either.

9) Too Much Distance between Warehouses and Workstations

Just as having too much space makes inventory management, so does the distance between your warehouse and where you work.

A supply chain company should work as close to the inventory as possible.

Regardless of whatever efficient software you have, having actual visibility of your inventory is always better.

When you have physical access to the stock at all times is when you can recognize overstocking or understocking instantly.

If it is impossible to do so, make sure you physically inspect your stocks at frequent intervals.

ALSO READ: Ways to Improve the Procurement Process

10) Too Many Software Tools to Manage Inventory

There are, unfortunately, very few integrated software solutions that can take care of everything from your catalogue to accounting to marketing and more.

This has resulted in businesses using disparate solutions to handle each activity or department.

This can result in redundant information, missing information, and confusion.

You don’t know where to pull the data from. However, this is changing.

Today, however, you have ERP solutions like Tranquil that are capable of integrating and automating every process in your business.

No more disparate solutions and siloed information – everything you need to make your business more efficient is on one dashboard, and one single database.

Depending on the size of your organization, you may face the considerable expense and business disruption while migrating your data, but it is well worth the time, effort, and expense in the long run.

You will be able to manage your stocks better, offer exceptional customer service, and eventually improve your profitability.

ALSO READ: Benefits of E-commerce and ERP Integration

Final Thoughts

If you haven’t done so already, you must plan a migration to software like Tranquil ERP which centralizes information from across your entire organization and helps you manage your inventory very efficiently.

You may think that as your business is small you don’t really need this.

But the truth is that for a small business, the more you wait, the riskier it becomes, and the more expensive too.

Before you get an ERP solution, we recommend that you get all of your data on an Excel spreadsheet, and try to automate extracting the data to minimize manual entry as much as possible.

If you are still not convinced about the benefits of an ERP solution like Tranquil, we request you to allow us to give you a live demo of how our software works. Please do schedule a demo at a time of your convenience, and we can show you how our software can benefit your organization. Our team will be happy to answer any query you may have.