How Replacing Old Software is the Best Supply Chain Strategy
If your business still depends on older technology like MS Access, VisualFox Pro, or any old desktop application, upgrading to something modern can produce productivity benefits that will defend your profit margins from unexpected supply shocks.
Old Software is Like that Reliable Ford Mustang:
Keeping old software systems is a lot like holding onto a reliable car. For years, the car is state of the art. It can go from 0 to 60 as quickly as the rest. It is very economical with how much gas it consumes; you only need to service it once a year.
After a while, the car begins to get old. Whenever you think about replacing it, you crunch some numbers: It costs about 50 times more to buy a new car than it does to keep servicing the one you have.
Years pass, and the costs to keep the car running add up. Now, you put it off because it’s too much of a hassle to shop for, buy, and get used to a new car.
A car usually breaks down after 200,000 miles. Then, you have no choice.
A software system can keep going, and going, and going . . .
Keeping you handcuffed to inferior efficiency, larger costs, and bottlenecks along your supply chain strategy.
Grabbing the Low-Hanging Fruit of an Improved Supply Chain Strategy:
The past few years have seen supply chain costs rise from multiple sources. Oil prices are up, making logistics by sea and land more expensive. Ports are becoming overcrowded, introducing higher fees for the same service.
Prices for all kinds of materials are rising, giving manufacturers a hard time passing these costs onto the customer.
The average profit margin for manufacturing is 10%. A supply chain strategy that fails to adapt can turn a profitable year into a loss with a single disruption.
If you are using an Excel Spreadsheet to track things or a Microsoft Access database to store information, you can do much better. Even legacy software like Visual FoxPro poses unneeded risks.
Upgrading your systems is the low-hanging fruit to real results.
Replacing Old Software along with Database Optimization Unlock a Ton of New Features:
Eliminating Errors with Automation
Did you know 75% of all software security breaches are due to human error? That 65% of product recalls are due to inputting the wrong information on product labels?
Old systems rely on lots of manual work. This is costly and runs a constant risk of human error, slowing down production, order fulfillment, or supply.
An updated system can automate most tasks. At the point of shipment, inventory levels are updated, accounting ledgers for sales and accounts receivables are automatically updated, and 100 invoices are sent via email to your customers.
Integration through Database Optimization
One of the biggest sources of human error is when several people do the same thing. Different people may be doing the same work on different systems if you have several systems, each for manufacturing, inventory, accounting, and other operations.
Replacing your old software with applications running on a first-class database gives you a single source of data, so all your business information sits in a single place.
Instead of accounting being tracked with Quickbooks, inventory with MS Access, and sales with a spreadsheet, everything feeds into a single database.
The productivity gains of all your employees knowing where to find the answer to 2+2 are significant.
Taking Action Faster with Instant Alerts
A database attached to some modern software can track your inventory levels, so when any item dwindles to a certain level of stock, you get an instant alert on your smartphone or email to order more. You can even instruct your system to order more from your supplier automatically.
When an item is handed over to the shipping company, your system issues the invoice. A reminder is automatically sent if the customer doesn’t pay for 30 days.
You know where all your inventory is at all times. A floor plan of your storage facility appears on the screen. Tell it which item you are looking for, and the specific room, shelf, or desk turn green.
Availability beyond Your Office
As long as you are using a desktop, all the information stored in your system is locked inside the office. Only people with authorization to use the system can share the information when they are available in the office.
Upgrading your system and putting it in the cloud makes it accessible to anyone with an internet connection. You can give as many people access to it as you want, setting different degrees of permissions.
For inventory, maybe you want your supply chain managers to be able to make changes while your salespeople can view the data to see what’s in the storehouse.
It All Translates into Real Money
These improvements to your supply chain strategy reduce your cost of doing business. You can keep prices the same while your competitors raise theirs and make the same profit while charging less than they do.
Why risk losing business over higher prices when you can upgrade your systems, boost productivity, improve customer service, and maintain consistent profit margins?
Saving your business time and money consistently with an ERP System customized to your business is what we specialize in. I am happy to talk with you about it at your convenience, so please do not hesitate to contact us.
Source for opening sentence: McKinsey and Company.McKinsey and Company.