All of my life, I have been captivated by numbers. My favorite spare time activity is math puzzles, so yeah, I got it bad. Numbers and statistics are what first got me involved in the pallet industry. And with pallet and lumber prices moving so quickly over the last year, it has never been more important to know your numbers. A lot of the numbers that we rely on in the pallet industry are ballpark guesses because many companies I have talked with struggle to drill down to their true cost. But some simple technology systems can help you eliminate or at least reduce the amount of guess work that goes into your business decisions.
The first place to start is data capture technology. This has been around the pallet sector for more than a decade. Yet, it is amazing how many plants still use manual data gathering and data entry to track core functions. Why use bar codes, scanners and hand-held devices to facilitate automatic data capture? For starters, it eliminates manual data entry. But even more importantly, it provides systems to ensure data accuracy. Bar codes facilitate automatic flow of pallets through your plant when combined with conveyors and stackers. This technology is a great way to eliminate unnecessary forklift traffic and reduce your staff headcount. Automated product movement is something that more and more pallet companies are going to do as workers become harder to afford.
After you capture the data, you need to do something with it. And that’s where the leading Enterprise Resource Planning (ERP) software can make even a small company seem like a big player.
ERP systems are software that combine various key parts of a company under one database to streamline processes from sales and purchasing to inventory and plant operations to billing and delivery. An ERP system is like the master brain of your business providing great insight into your data and processes.
The three leading ERP systems for the pallet industry are PalMate™, Pallet Track™ by Innovative Data Systems and Pallet Connect. Each software has its pluses and minuses. A good idea is to research applications on the Pallet Enterprise website (www.palletenterprise.com). Also, ask around and talk with companies that you know to see what systems have worked best for them.
The following are some key questions to consider when evaluating ERP options. First, stop to consider what pieces of data you really need to better run your business. Think of the data you have now. How it could be better? How could it be more accurate? More complete? Some of the major data types include: core counts, pallets repaired, pallets produced, existing lumber inventory, piece-work calculations, customer data, etc. What generic reports or custom reports do you need to access?
What type of system should you deploy? Should it be a cloud-based ERP or an on-site ERP system? Cloud-based ERP systems enable a pallet-maker to hand off most – if not all – of their information technology (IT) needs to a third party whose entire business is maintaining and updating IT systems. Cloud-based ERP systems also relieve pallet-makers of the responsibility for securing their computer systems. Some companies want more in-house control of systems and already have dedicated IT staff.
How much support, service and training will you need? What about importing or translating data from legacy systems to a new ERP solution? Does the ERP need to integrate with other software, such as QuickBooks, Sage, Great Plains, etc. How important is a mobile interface for remote monitoring of operations or access data?
Another key consideration is the functionality or features that the ERP needs to have. Do you need inventory management, production tracking, dispatching, customer portal, accounting integration, multiple site management, logistics management, pallet drawing, specialized reporting, etc.? Make a list of the features you absolutely must have and those you would like to have if possible. Rank in order of importance.
Talking with various vendors, you may want to ask about customization and the ability to develop new reports or functionality. Some vendors are more open to customization. Of course, any customization will add to the cost when it comes to deploying the software at your company. The cost of the software is always a key concern. When coming up with your budget, consider all the ways the software can reduce overhead and improve your operations.
Finally, the difference between a successful implementation and a failure comes down to your people. Will the frontline workers and management get behind the software conversion and deployment? Will management support the process when people complain? Will the company put resources behind the project to ensure that data generation and analysis are a priority? Will the company nominate a senior level manager to champion the cause? At the end of the day, data is going to become even more important in the future to run a top pallet or lumber company. Getting the right tools in place now can make all the difference later.
