A standard ERP isn’t the right solution for the Print and Packaging industry
And yet it can be.
The same statement arises time and again in discussions with key players in the packaging sector:
“A standard ERP isn’t the right solution for our industry.”
“No”, is what I say, and then explain why.
When you look at today’s standard ERP systems, with their high level of detail, then the above statement about ERPs not being suited to the print and packaging sector might initially appear to be right. But is that always the case? What if you take a step back and look at things from a process-based perspective? If you reassess completeness and integrity at any point in time and at every level of detail, what do you see?
Back to Square 1. The key demand placed on an ERP is to uniformally present flows of materials and values and to comply with all legal requirements in terms of accounting.
According to Wikipedia:
Enterprise resource planning (ERP) systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flows between all business functions and manages connections to outside stakeholders.
Why is an ERP not the right solution?
Standard ERP systems operate in terms of master data and entities. However, they assume that everything is always known exactly and that these “facts” don’t change. Statements such as “perhaps” or “I don’t know” are not tolerated. The print and packaging industry is different and change is the only constant. Several aspects can initially only be estimated, meaning that planning is based not on bills of materials and work schedules but on imposition sheets and sheet layouts. Employees expect an industry-specific user interface with industry-specific fields and the terminology used in the packaging industry.
The main problem, however, is associated with the processes, particularly the product development and the change management processes.
Due to the fact that an ERP relies on articles, bills of materials and work schedules for production, these data need to be available and complete in order for an ERP system to be able to plan and perform calculations.
In the print and packaging industry, however, complete bills of materials and work schedules are not initially available or are not yet important. Work schedules and bills of materials develop over time and need to be flexible in terms of allowing changes. Only certain aspects are known at the beginning of a job, such as the imposition sheets and the production route. In many cases this is entirely sufficient. Machines can be set up, raw materials ordered and other steps can also be undertaken. The finalization in terms of a specific printed image actually only takes place during plate exposure in the case of offset printing and is only relevant when orders are generated or the press tools prepared in the case of web printing. What is much more important is support when setting up the optimal sheet composition. Design changes are possible at any time until this point in time. Print runs and deadline changes are even possible much later. This all leads to complications when it comes to how ERP systems currently “tick”.
Help is available in the form of industry solutions and bespoke solutions. This usually also applies with regard to product illustration given that every field needs to be exact. However, this often means that it is not possible to integrate this with other processes in a standard ERP. As a result, industry solutions and bespoke solutions are often only a minor part of the overall process-based landscape of a company.
Standard ERP systems continue to be developed in line with technological updates and process requirements. It is clear that a standard solution cannot cover every single business process down to the lowest level of detail (individual fields) out-of-the-box, but can of course support the major inputs and outputs.
In practice, the first obstacle in many cases is the product calculation – the customer hasn’t been set up in the system, or there is no need to set up an article, a bill of materials or a work schedule for every calculation (volume-based pricing, production, etc.). Furthermore, there is no need to set up a separate article for every material and tool just in order to be able to take this into account in a calculation. Why? Because it is uncertain whether the relevant product will ever be produced. Similar applies in the case of packaging specifications and the like. However, if there has already been a similar product, then all these data should be used again and just details changed.
At first glance, this appears to be a Gordian Knot for a standard ERP system.
How can add-ons help?
First of all, add-ons ensure an industry specific user interface. Input screens are modified to reflect the specific requirements. The population of the ERP entities needed for calculations and the like has already taken place and interfaces already exist to the industry-standard third-party systems. In the print and packaging industry, these are the following:
- Interface to a CAD system for preparing the imposition sheets
- Interface to a packaging solution for preparing the packaging specifications
- Interface to the machinery for quantity and completion confirmations
- And, particularly important, the visualization of the planning
Seen from a somewhat higher process level, this means that the Print &Packaging industry can be regarded as a collection of individual elements which are not bound to any rigid time-based sequence but which can be integrated into ERP standard processes.
Albeit, however, subject to the limitation that not everything is clarified at the outset and products develop over time.
If an industry solution and/or the modules are developed and implemented in accordance with the relevant process and these become ERP entities only at defined points in time, then we can, in my opinion, speak about a successful solution. These elements can be further developed, exchanged and tailored. Despite this, the functions of a standard ERP system can still be used extensively, allowing users to benefit from the scope of the solution and the further developments introduced by the software house.
We look forward to showing you how this can look in practice and explaining the options in an environment with Microsoft Dynamics 365 for Finance and Operations (EE) during a personal consultation!