How Cloud-Based ERP Can Give Your Business a Boost

Duplication of effort and a lack of integration led Unionwear to move to an ERP system. The company’s experience with Salesforce.com – plus the appeal of avoiding upgrade costs and the benefits of a regularly updated system – made cloud-based ERP a natural choice.

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“Small-batch customization comes with a high level of overhead and that overhead is basically order processing and all the paperwork associated with an order,” Cahn said.

The amount of paperwork to process an order is the same, whether an order is for 12 units or 12,000 units, Cahn noted. Automation, however, reduces the paperwork burden, increasing efficiency and making smaller orders economically feasible.

Cahn said the task of creating a bill of materials might take one hour of time for a $50-per-hour engineer to complete. Automating the bill of materials creation process eliminates that cost. And while saving $50 is not a big deal on a $50,000 order, the impact is much greater on a $500 job.

“I probably wouldn't touch the $500 order before the automation,” Cahn said.

Cahn said most of the Rootstock components it has rolled out thus far, along with some Unionwear-built features, have made small-batch customization more economical.

Inventory Impact

Specific areas of ERP impact include stock control. Rootstock has imposed a structure on the inventory management task, according to Cahn. The software’s inventory feature gives Unionwear a “really good grasp” of inventory levels and needs in real time at any point in time, according to Cahn.

As for financial impact, Rootstock has contributed to a $225,000 reduction in inventory in its first year of use, Cahn said. He said apparel manufacturers tend to order more material than then need to ensure that they don’t run out of fabric when filling an order. The danger, however, is that a manufacturer will order far too much material, which will turn up in the year-end inventory count. At Unionwear, the Rootstock inventory module helps the company keep a close watch on the materials it orders.

Improved inventory control effects other functions within Unionwear. For example, feedback from the inventory system helps Unionwear adjust its costing methodology.

“We have a much tighter control over all aspects of our business,” Cahn said.

ERP also provides a greater degree of flexibility. Raw material data in the Rootstock database lets Unionwear tap into existing resources rather than purchase new supplies. For instance, if a new order requires a certain color of thread that Unionwear lacks, it can search the database for a close match.

“In the past, if we didn’t have it we would order it,” Cahn said. “Now, we can look through raw materials and make substitutions.”

Unionwear continues to rollout Rootstock modules as well as its own Salesforce-built features. Cahn said the company is easing into Rootstock’s scheduling and capacity planning module. That capability will let the company look at new orders and, based on existing capacity, determine whether the orders can be produced on time. If the timeframe can’t be met, Rootstock’s “drag and drop” visual interface lets planners move capacity around from one production line to another or reschedule earlier orders to meet the delivery target, Cahn said.

“I can keep moving orders around until we are confident we can produce everything we have sold on a timely basis,” he said.

Unionwear is also using a reporting feature it created using Salesforce’s reporting engine. The company’s production efficiency reporting capability pulls production and costing information from Rootstock and labor hours from Unionwear’s payroll system to gauge worker efficiency.

Also in the works: a mobile technology deployment for production floor workers. The plan is to let workers use any Wi-Fi enabled device to report production data including yield estimates and actual fabric usage. In addition, shop floor personnel will be able to view work instructions, scheduling, and other information on the mobile apps, Cahn said.

Copyright © 2015 IDG Communications, Inc.

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