When Is It Time to Change?
Many of us are holding on to existing ERP systems well beyond their useful lives. Find out the primary reasons formula manufacturers typically hold on to their old solutions, key indicators that the time has come for a change, and alternatives to the current systems.
There are three primary categories of formula manufacturing systems that need to be reviewed, and serious consideration should be given to determine if they are still providing value to your organization.
1. Excel spreadsheets running the formula manufacturing business
2. An obsolete formula manufacturing application that is no longer up to date
3. A custom-written solution that has not been updated with changes in the business environment
Excel spreadsheets – It is a fair assertion that the most prolific formula manufacturing solution on the market today is Excel. You would be amazed at how many companies trust their greatest asset, their formulas, with an easy-to-customize but impossible to integrate tool such as Excel spreadsheets. Vicinity is approached by companies that store all of their formulas in hundreds, if not thousands, of spreadsheets or one large spreadsheet. Over time, they have become obsolete and the company is dependent on one person to update and maintain the data. Excellent job security if you can get it.
It is evident to me why these installations exist. In the infant stages of a formula manufacturing company, the R&D director (or equivalent) decided that writing the formulas on the backs of envelopes or in the lab notebook was ‘old school’ and there was a better way to centralize the formulas. Armed with their version of Excel that shipped with their desktop computer version of Microsoft Office, they began creating spreadsheets to store this data. After all, the software was already owned, Excel is easy to use, and new employees already had experience with the tool. What more would we want?
Well, as time went on, one copy of a formula became the basis for another formula. Someone requested more information to be tracked and every subsequent formula had this new addition. Changes to existing formulas made duplicates of the master formula, and often multiple copies of the formulas were stored on various workstations. You know, just in case something happened to the original.
This approach worked fine as long as only one person maintaining the formulas or virtually no changes to the formula structure changed. Also, as long as no one needed any information across multiple formulas or the inventory data (such as price) never changed… then you were golden.
With the growing compliance requirements such as Country of Origin, allergen disclosure, SQF audits, and HACCP, our lives are no longer simple enough to be trusted with a spreadsheet written in the back room of an R&D laboratory. Instead, formula manufacturers need centralized formulas that feed production data. We need formulas that have integrated QC functionality and the ability to perform cost rollups on the fly without additional data entry.
Excel spreadsheets are fine for analysis of existing data, such as yield trending or material usage, but to store master data such as formulas and batch tickets, we need a database-oriented formula management system. So are you one of these companies relying heavily on spreadsheets to store your master formula and production data? If so, take a long, hard look at what you are building. Do you really think it can continue into the future? The odds are against that design. Fortunately, with enlightenment comes education and with education comes change.
Over the past 20 years, many solutions have come, and most have gone. The key is that each of the successful applications is built around a central database of master file data that multiple users can access. There is only one set of data, and a change in one place affects all other parts of the organization. In this case, that is a good thing.
If you are interested in a state of the art solution priced at a reasonable level, then you should check out Vicinity software. Vicinity was written from the ground up with the sole purpose to address formula manufacturing needs and is not attempting to be everything to everyone.
So take a look at your existing system. Are you using Excel spreadsheets to store data or to analyze results? Dig deep, take a long hard look, and make changes where they make sense. Once centralized, the sources of formula data will do wonders for your company and, believe it or not, will save you significant profits in the months and years to come.