To keep our service levels up to par, we followed the council’s suggestion and opened a two-week window three months in advance of the new ERP implementation to allow our distributors to enter special stock orders and enable us time to stage them for future shipment.
What was critical was that we held the special orders until a few days before implementing the new system. The council stressed that if we shipped the orders too early, distributors’computers would stop ordering for normal usage, consuming the safety stock. The special stock orders were a cushion so we could continue to satisfy their end users’needs during the two-month adjustment period.
Thanks to our Logistics and Operations Advisory Committee, when we implemented the new ERP system on July 1, there was very little panicking. Most of our distributors were prepared well in advance with the necessary information they needed about the change. And emergency orders were almost non-existent because the distributor had the inventory to fill their customer’s needs.
While we’re still going through some of the process issues and we did run into some problems, our ERP change wouldn’t have been as successful without the information our distributor partners provided to us.
Bottom Line: By engaging our distributor partners in our system change, we were able to ensure nearly seamless service to the end user. And that’s what we’re trying to achieve. It was a win-win for everyone involved.
Kevin Boyle is vice president, channel management and distribution, Loctite Industrial Group, Henkel Corporation, a member of the Power Transmission Distributors Association.PTDA is an association of industrial distributors and manufacturers dedicated to providing solutions to customer needs. For more information, visit www.ptda.org.
- Global manufacturer with three Loctite Industrial production facilities in North America
- 4,000 Loctite Industrial Group employees
- Adhesives, sealants, and application equipment for OEM and MRO markets
When most distributors and customers hear about a supplier going through an ERP system change, their blood runs cold because, potentially, it can be devastating to business. There are far more stories about bad implementations than there are about good implementations.
When we learned we would be changing our ERP system, we were determined to make it as smooth a transition as possible. Since we sell approximately 95 percent of our business through distribution, it was only natural for us to call on our channel partners for help.
About four months before the ERP implementation date, we held an emergency meeting of our Operations and Logistics Advisory Council. This council is comprised of distributor personnel who represent a cross section of our distributors and whose primary responsibilities are in operations or logistics. We asked the council to share with us their past ERP change experiences to help us determine the best way to minimize the impact on them and our mutual customers.
During our meeting, the council provided us with invaluable advice that not only aided our distributors and customers in the switch, but also helped us, too.
One of the first recommendations the Logistics and Operations Advisory Council made prior to implementation was to ensure that we effectively, and in a timely manner, communicated ERP system change information to our distributors.
We took a few steps towards achieving open lines of communication based on the council’s recommendations. First, we notified our distributors of our plan several months in advance of implementation and then followed up with periodic updates on our progress.
Second, with the help of the council, we created an electronic Adobe PDF guide to our ERP system change that we sent via e-mail to specific people at each distributor headquarters. We asked them to disseminate the information within their companies to be sure the correct person received the information. We also posted the guide on our website so our distributors could download the information whenever they needed it.
And finally, we set up a special 800 number dedicated to distributors who had questions, issues or problems about the new system.
Rather than being aggravated because we didn’t tell them until the last minute, our distributors have been easy to work with when dealing with problems that have come up since the new ERP system implementation. We engaged them early and they knew what to expect.
Another recommendation made to us by the council was to plan for lesser than normal service levels for at least two months while undergoing the ERP switch. There is no such thing as business as usual” when you’re going through a system change. While you can minimize the impact, you can’t eliminate all the problems.