Many people are not aware of the full potential of an ERP. Some only use it for purchasing, some for accounting, and some for project management. But what is the full extent of an ERP’s capabilities? Sarah brings in Bruce Larson, Principal Consultant of Larson Solutions, to answer this and share his knowledge on ERP and much more - only here in What The Duck?! Show Highlights: Introducing Bruce Larson Getting started in quality management Defining Epicor and its use Utilizing an ERP’s full potential The importance of a part setup strategy Quotes: Bruce - Why he decided to start his own consulting business “I have some approaches that are different from some of the other software companies, and it's worked really well for me, customers liked the experience that I'm bringing to the table, and at the end of the day, I can choose when I'm going to be working and where I'm working, and it's just worked really well for my lifestyle now.” Bruce - Why an ERP is important “You want to make sure that the right information is going to the supplier and their community back to you on what their commitments are for delivering it, and I think that it all falls into place even as far as having the right pricing and in there.” Bruce - Why it’s important to follow a part setup strategy “If they skip the planning parameters and don't do anything, they're creating more work for themselves, because now they're not consolidating, they're not leveraging the system.” Connect with Bruce and learn what he’s been duckin’ around with: About Bruce About Larson Solutions Larson Solutions Website Connect with Sarah and find out more about what the duck she’s up to: About Sarah Sarah’s Tweets About SourceDay SourceDay Website Had fun with the podcast? Leave us a like, share our content, and subscribe! See you soon on the next episode of What The Duck?!
Many people are not aware of the full potential of an ERP. Some only use it for purchasing, some for accounting, and some for project management. But what is the full extent of an ERP’s capabilities? Sarah brings in Bruce Larson, Principal Consultant of Larson Solutions, to answer this and share his knowledge on ERP and much more - only here in What The Duck?!
Show Highlights:
Quotes:
Bruce - Why he decided to start his own consulting business
“I have some approaches that are different from some of the other software companies, and it's worked really well for me, customers liked the experience that I'm bringing to the table, and at the end of the day, I can choose when I'm going to be working and where I'm working, and it's just worked really well for my lifestyle now.”
Bruce - Why an ERP is important
“You want to make sure that the right information is going to the supplier and their community back to you on what their commitments are for delivering it, and I think that it all falls into place even as far as having the right pricing and in there.”
Bruce - Why it’s important to follow a part setup strategy
“If they skip the planning parameters and don't do anything, they're creating more work for themselves, because now they're not consolidating, they're not leveraging the system.”
Connect with Bruce and learn what he’s been duckin’ around with:
Connect with Sarah and find out more about what the duck she’s up to:
Had fun with the podcast? Leave us a like, share our content, and subscribe! See you soon on the next episode of What The Duck?!
[Music] welcome to what the duck a podcast with real experts talking about real issues in direct spin supply chain and now here's your host Source day's very own supply chain Maven Sarah Scudder [Music] thanks for joining me for the what the duck another supply chain podcast brought to you by Source day I'm your host Sarah Scudder and this is the podcast for people working in the direct materials part of supply chain today I'm going to be joined by Bruce Larson and we're going to discuss what to consider when setting up parts in your Erp and how to set up attributes to easily find these parts if you work for a manufacturer struggling to set up parts in your Erp then this episode is for you I'm at Sarah Scudder on LinkedIn and at s Scudder on Twitter if you are new to the show make sure to follow this podcast so you don't miss any of our direct spend supply chain content today I'm excited to be joined by Bruce Larson Bruce has been an epicore Erp consultant for many years after overseeing supply chain for a Manufacturing Company Bruce started his own epic core Consulting business about seven and a half years ago he helps companies to improve the utilization of Epicor to assure a consistent approach is used in manufacturing welcome to the show Bruce good thank you how did you get started in quality management
yeah I got started in quality management um I was involved with Senate manufacturing around the world for a technical company and it was critical that the approach equality was consistent throughout all of those sites with ISO 9000 just coming out I was involved with setting up that assistant in that company and we used that as the means of getting consistency throughout the whole world now what is ISO 9000 ISO 9000 is an international standard that um you need to show how you're controlling your processes for instance how when you send a contract out to a customer a customer response back you're reviewing that contract to see that you can meet all of the terms of that um and check in all of the checks and balances in your system when you send a PO out how do you know that the supplier is using the correct revision for that part that you're buying for instance too
so you started in quality management you transitioned up at a couple companies doing that type of work why the pivot to running a supply chain team yeah um the pivot to the supply chain team I had an opportunity somebody came in and said you know you've been working with outside suppliers for their quality you're good at this we we want you to come in and run our supply chain Organization for us and and really it it fell right in line with what I have been doing we're doing a technology transfer here I'm now doing technology transfers to the suppliers and using the system to to help manage that
how do you get connected with epicore I was general manager of a machine shop and they had a green screen application for running the shop and it just did not give us the information we needed and so I did a um the software selection process and found ethicar along with a couple other systems but what I really dug into it upon eppicardic really a flexible system that many of the needs of that business as a Job Shop
what is Epicor
Epicor is an Erp system that handles Financial CRM supply chain production and engineering processes in addition to even your field service or your case management so if you have a call a ticketing system with customers it handles things like that so it's pretty it's a pretty broad system and what I have found working with it is it's extremely flexible to allow customizations as you need as you need to change your business or make it work for your business because the key with it is is that a good ARP system is one that you can you can make it work for you and that's the other way around where you're working for it
so you decided to do something kind of Brave and scary you went out and started your own consulting firm why
um you know I I had worked with a couple different um Consulting Partners Professor car I even worked for Apple car and and I found that um I was constantly finding new customers I was bringing new customers in uh and I thought why shouldn't I just manage my own business and do this and I have a passion with it too and I have some approaches that are different from some of the other fall Park companies and it's worked really well for me customers like the experience that I'm bringing to the table um and at the end of the day you know I can I can choose when when I'm going to be working and where I'm working and it's just worked really well for my lifestyle now who is your customer
who is my customer um well I've got I've got many different customers um I'm working currently with a company that makes um machines that make pallets and I've always wondered where Palace came from here but um this company actually has this little machine that um put spits off pallets when you give it wood but I've also worked with Distributors um machine shops making Aerospace parts and even an airplane manufacturer in Idaho um currently and you know I'm working with about five different customers right now um so they're pretty wide and varied what problem do you solve for manufacturers that you work with
now I'll say them the the type of problem that I solve is there's many times that I get in and because when I'll come in and we'll just say epicore can't do what we wanted to do it's broken in fact we want to return it um and I've um gone in and reviewed their process sat down with them without the software and just say what you want to accomplish here and after walking through that process then I'll say give me give me a day you know so I'll pick a day in their system and I'll come back and say okay this is what you're looking for you know and I'm applying my background on epicore so that I'm able to make it work for them and I've been really successful that with it sometimes it's as simple as check in a box somewhere um other times it is going through and I might change the rules in the accounting system so so it will change account numbers for you automatically in one case I had a customer that was keeping track of how much they were buying product for and then the pricing it accordingly but in their system it wasn't that the actual cost wasn't matching up with the sale and so I helped them Implement lead costing and and that was a fairly simple change and I made some customizations for them also so that for the user it was totally invisible but for the finance team it gave them better information
what makes manufacturing companies a good fit for Epicor
you know it's manufacturing and I've been doing it for 30 years and with all the different types of companies and epicore has all of these different ways of of providing product to customers um in your sales orders you can you can buy it to orders make it to order and provide pull it out of stock you have ways of leveraging using outside suppliers to do the work you're you're able to capture those costs as you're working with it yet um extremely flexible now granted some people look at it and they see all of these extra boxes on the screen and that's that's because it is set up to meet the multiple modes of manufacturing um what I have worked with companies that after they get in and they're running then we can start hiding some of those fields or you know leveraging them a different ways so it's worked out really well across across the port again for manufacturing
when you and I were prepping for our interview today you mentioned something that I thought was really interesting you built a tool in Epicor why and what does it do I and and I'll say most of the tools that I've built are probably dashboards and I built hundreds of them but um one that I'd say that is unique to me and um my customers are using them I've I've set up what I've refer to as X-rays and x-rays lets me look into their system and I not just me but them also see how everything is set up because there's no one place to go into the system and see okay I have 16 000 Parts how are these parts set up for um
for planning purposes or for who's the supplier for this part and likewise on the finance side I have accounting set up and the accounting setup is fairly complex and I've with this Finance x-ray tool you're able to actually see is everything lined up the way you expected it to be because you could be off by one digit or something and that's if they expected results
so one of the problems that you solve for people having your own epicore Consulting practice is one which you already mentioned they don't know how to use the system so they get frustrated and just stop altogether the other is people who don't know how to optimize their Erp why do people struggle to optimize their Erp system so much I think some of it it's old school um I've gone into many companies where they just you know I'll have a buyer and the buyer just loves their paper they'll run a report that might be an inch thick and they get up their yellow highlighter and they start looking through it and highlighting okay here's the things I need to buy put a Post-It note down and that's their that's their comfort that's their security blanket what they haven't learned is what some of the basic settings in the um in part setup that help them do their job more efficiently effectively the um and that's where I'll work with them to help them understand the capabilities of upper core and this is true with other systems too that you can consolidate demand so that when you're making one purchase order you're actually fulfilling the demand of five requirements that are out there so you can consolidate those things that's I think that's really where I've helped people is understanding that um trying to get them away from the paper system and understanding how they're able to share that information across the board with their other users or the other buyers for an example
what can a buyer do to get more people to use their Erp for more than just generating purchase orders
you know um a buyer a buyer does you know considering they spend all the money in the company it's um and it's a really important role and I think when they start working with the engineers they help them understand why it's important that we look for consistency um parts that we're using wise why it's important that Vitality be fittings or your Hardware try to have common Hardware so you can um buy more of one item instead of buying five different sets of bolts or something it's also the buyers can also relay back to engineering and Manufacturing the need for really revision control and why it's so important that when they're sending information out to a um supplier that they were using the right the right information and that's and that's part of it I think the other part that um buyers can also be helping companies know especially with what we're dealing with with supply chain now it's so prevalent that lead times have been pushed out that you want to make sure that the right information is going to supplier and they're commuting back to you what their commitments are for delivering it um and I think that it all falls into place the um and then even as far as having the right pricing in in there the buyers can even be working with Finance to make sure that they're all in the same page on how the finances are working around the purchasing process it seems to me it would be a no-brainer to have the pricing set up in the Erp why is that such a challenge
um one is well for some companies first understanding how the price and structure works and and we're talking the cost-sided equations I won't even get into the pricing where I'm selling the product of the customer but on the cost side of the equation you want to be capturing try to capture all the different costs involved with it and it's also when you're dealing with different suppliers they can have different prices and you can automate a lot of it and again it's understanding that you can do that first off and then learning how to do it and when you don't know how to do it reaching out to somebody like myself or going into system Health to really dig in and see how can this be done so just a repeatable process versus writing it down on a Post-It or a notebook and I've seen this many times where somebody will have a notebook saying here's my prices for all of these different parts and then hand key in that information so it's really getting them and digging into the system and understanding how how to use the system to make your job easier
so you mentioned the other side of the equation which is kind of the focus of our conversation today is about setting up parts setting up parks in an Erp system is not as easy as it may seem why
um it goes back to garbage and garbage out and when you set up your parts you want to make sure that you you set up your strategy of what do you want to measure if you set up all of your parts but you don't do any put any attributes against those parts um it's really hard to run your finances Parts really fall into a few categories you know and when in fact what I've worked with it I look at parts are either it's raw material it's modified or sub-assembly type material or it's finished good those are the big big areas and can you say those buckets one more time sure the the parts fall into three areas raw materials sub assemblies are modified raw material and then finish good finish Goods is obviously what's going to be selling to a customer and when you when you break it down into those categories then you can also use different um codes and if a car it happens to be a part class says when I put this part in inventory it's going to show up in the general ledger for raw material or when I put it in this other part it shows up as finished good why that's important is now when you run your balance sheet you're able to look at how much raw material do I have sitting in stock and how much finished goods do I have sitting in stock and depending on your Market a lot of finished goods may be bad if you do a lot of custom builds you don't want to have a lot of finished goods you want to have all that raw material are the sub assemblies to support the demands that I'd be coming to you um and that's just one of the areas the the other areas in setting up the parts where where people miss is planning parameters planning parameters are really critical and without getting into it too deep is you can set up days of Supply which is consolidation of demands into one bucket so that you're buying you're doing a one-time buy or if you're buying it in a larger volume now you're saving on shipping costs and it also helps the suppliers Supply in in a larger volume you can also set settings that when changes occur in your system you may ignore those changes because they're within a in a particular window where they're called Pine pencils things like that the the other you know the last part I'll talk about on on setting up parts some Watson Park is there are other ways to put attributes on parts um you can put analysis codes of when this material is being used um I have one customer that he it was really important to know when he was using galvanized stainless steel or copper and he wanted to know how many pounds in his product when it was shipping out the door in those three different materials and he actually see how profitable he was because of because of those um parameters and those attributes
what are some of the things that a buyer should absolutely avoid when trying to tackle This Heart setup strategy that you're talking about you know that the one thing is you know and I already talked about the planning parameters but if they skip the planning parameters and don't do anything there they're creating more work for themselves because now they're not consolidating they're not leveraging the system um the other is having having parts that have multiple manufacturers under it if they're all the same that works great but um they should be leery of some of those I know coming from the electronic business the event connectors even though they say that it's an RJ45 is not the same as another RJ45 um and I've I've actually had to do recalls because of a buyer buying the wrong manufactured part
how would you describe your part setup strategy
I would say that my part setup strategy really goes back to how do I want to report and not only how am I going to report but it's going to be for different people too how do I how are our Engineers going to find some other parts of the system how is finance going to be looking at the cost in the Investments not only from a cost of goods sold but balance sheet how much they're running an inventory and then also for the buyer how they can leverage similar parts so they can find suppliers that are providing those similar parts so they can increase the volume by with some of their suppliers because they've Consolidated them and again it all goes back to those attributes of setting setting the different things up I think the other part that in the background as I was talking about those three different new areas is the strategy of having many you know several people involved Hospital functions involved it's not just the engineering role to set up parts it is really the responsibility and the different areas to set up parts and own certain areas in the park canisters
so there's a lot to consider when setting up parts and kind of determining your part strategy this may seem overwhelming to some buyers where do you suggest someone's starts how do what's step one how do you tackle this kind of in small steps now one one way to start is um many many Erp systems have a training database and and take a look at how the training database has been set up um I I've used that when I when I've worked with some customers too on training them saying okay you can see how they categorize this um working with a consultant working or visiting other users trying in a user's group and talking to other users about how they're they're um setting up parts and working with parts um definitely reading the manuals and I know I'm a technical ski where I'm one of those that will read manuals but it's amazing what you've picked up and just racing through the manual and looking at all the fields that are presented to you in the Park Pasture you might discover something that could you could really leverage to make your job easier and more consistent again
setting up parts also ties back into the AP function when you and I were prepping for our interview you mentioned that you are still surprised even in 2022 by how much time people spend entering AP invoices into the Erp who is doing this manual entry oh yeah that's that's one area that um yeah I've looked at [Music] um I'll I'll be honest at first I was really surprised when I went into finance and looked at how they were matching up invoices and it was a very paper-based system they'd get an email they print it out they put it in a in a basket and then they'd enter it into the system and a lot of times they would wait until the product that received in before they would enter it into the system and so there's constantly shuffling shuffling paper back and forth and the problem is that is that you're not leveraging some of the capabilities that um a computer has one of those capabilities is called optical character recognition and it's pretty it's it's not a very standard commonplace that you can put a document into this OCR software it reads it and not only does it read it but it can read an invoice and say this is the invoice number this is the part number or the pl number here's the supplier and it pulls all that information together and it interested in for you automatically um the other the other key thing about this is that those suppliers when they email out or send out electronically the um invoice they're doing it at the time of shipment they're not waiting two or three weeks while the product's getting to you and this is when when you have a huge opportunity to be checking between what is what's the um price on that PL versus what's coming in um on that invoice
your last statement then brings up the question around po receipt variances what is a PO receipt variance so the PO receipt variance is yeah you set up the purchase order for fifty dollars for this part and in fact the supplier may even come best come back and confirm it yes it is going to be fifty dollars and between the time of your ordering and the time of their shipping they maybe had a change in their system so they updated their price to sixty dollars and they didn't think of notifying you they um shipped you the part but they send you that invoice right away and when you put in that invoice and when you receive in that part of fifty dollars versus sixty dollars now you have a variance the the problem that can occur is back to the old school way of doing things that invoices sit in a basket the part comes in it gets received in it goes into an inventory at fifty dollars because that's what the PL was saying and then they'd even get fished to a job and then Finance puts in that invoice and they're trying to match it up and they save sixty dollars through fifty we've got a problem so we'll go back to purchasing things and make sure we don't receive it we want and it's already done it's in fact that part may have already shipped out too and that causes problems because now it is that treble down effect of that 10 difference which is your balance is going to show up as a variance and not as actual cost against that part so your cost of sales is going to be skewed and if you know enough of this you really don't know what where you are so it does it's that garbage and garbage job but I think it's also that variance is we've had a commencement bio supplier that just needs to Commitment of that price and you didn't catch it early enough in the game well that's that's really what uh and there's a lot of a lot of work to undo those variances if you want to you and try to undo them what can be done to prevent these po receipt variances you know I I think the the key thing on preventing them is getting confirmations from your suppliers and also even after you've got confirmation from your suppliers somewhere sending a report out whether it's on a weekly basis just saying here's the open POS that we have with you here's the price that you're committed to and and the other is is that when the invoices come in put the invoices in right away into your system you don't have to try to match them there's no receipt to match them to but then compare that invoice price to the pl price before you do the receipt so that those would be some of the steps that you could do to prevent the variants
if people want to check you out Bruce where do you want to send them they can go to larsonsolutions.com
or they can send me an email at Bruce larsonsolutions.com
is also on my on the website there's even a contact me button and you can click a contact me and send a send a message even attach a file if you wanted to if you have any questions on that's required to be happy to answer them thanks for discussing what to consider when setting up parts in your Erp and how to set up attributes to easily find these parts with us today Bruce if you missed anything you can check out the show notes if you are new to the show make sure to follow this podcast so you don't miss any of our direct spend supply chain content I'm Sarah Scudder on LinkedIn and at s Scudder on Twitter this brings us to the end of another episode of what the duck another supply chain podcast I'm your host Sarah Scudder and we'll be back next week