Sage and its partner Parity Software have successful implemented Sage X3 ERP and Sage Inventory Management at Universal Paper and Plastics (UPP). UPP selected Sage X3 ERP to replace their antiquated systems. According to the press release this is a best fit rather than an ideal fit. Parity Software chose Sage for its ease of use, value for money and network of business partners. UPP selected Parity Software to solve their software issues. It was Parity who suggested Sage Inventory Management as the solution to their software issues.
Why partners are so important
Selecting the right partner for an ERP implementation is critical. Their market experience is the differentiator between a successful implementation and making a real difference to the company. Parity Software appears to have understood UPP’s apprehension about Sage X3. David Sher, GM of Universal Paper and Plastics commented: “When we first looked at Sage ERP X3, it didn’t have a forecasting module that suited out business. Sage ERP X3 is really set up for make to order businesses, but we’re the opposite. Only 2% of everything we do is made to order, so the need for forecasting was critical. Our implementation partner recommended Sage Inventory Advisor.”
The decision to implement Sage Inventory Advisor has paid off. Sher explained how it works: “For us, Sage Inventory Advisor is a key component for Stock management within Sage ERP X3. On its own it’s more of a visual tool, an overview. We do all our work directly in Sage ERP X3 – if we need to know how much stock we’ll need for the next three months, Sage ERP X3 projects that based on figures from Sage Inventory Advisor.”
The challenge of FMCG
UPP is a major supplier of paper and plastic FMCG products in South Africa. They produce over 400 SKU’s to chain stores around the country. UPP maintains a lead time of between 48-72 hours for its customers. This makes stock levels and demand forecasting critical to the business. UPP had a DOS-based finance solution and used Excel spreadsheets for planning. The system was implemented several years ago and long overdue for replacement. As Sher explains the system was flawed: “Before Sage ERP X3, everything was done manually. We had Excel spreadsheets and sales reports pulled from old systems which we would manually analyse and forecast three to six months ahead.”
The change has been dramatic. Everyone in the business now has forecast information at their finger tips. From the shop floor to the sales team and upper management. This means that forecasting is an dynamic ongoing process that leads to lower costs and greater profitability.
Sher is happy what Sage has delivered so far but expects even more. He commented: “We’re very happy with Sage ERP X3, even though we’ve only been live for about seven months – Sage Inventory Advisor takes time to build up, and the more history it has the better it can forecast. We’re still looking forward to realising its full potential.” Those improvements involve the inclusion of additional factors into the calculations as the company looks to expand.
Sher wants the forward projections of his sales team and additional risk factors included. These factors could include supply issues or strike action. They may also include potential expansion with customers opening up new stores in South Africa or abroad. These are nuances that will further improvement the forecast going forward. Sher’s intent is to lessen the manual alteration to numbers that they still make because of these external factors. Whether he achieves this in the future is difficult to say. This seems to border on scenario planning rather than forecasting. The main risk us in the accuracy of some of the variables he is suggesting.
The Sage Inventory Management module, takes Sage X3 ERP and makes it suitable for a wider set of manufacturers. The figures that Sage claims to have already achieved for its customers are impressive. Keith Fenner, senior vice president for sales at Sage ERP Africa commented: “Manufacturers need efficient, flexible, industry-specific business solutions to help them improve their competitiveness and deliver customer value.
“The variety of production processes requires the ERP platform to be dynamic and reliable while operating in mixed mode environments. Sage Inventory Advisor can help companies reduce inventory by up to 35% and increase sales by 10% or more, using its cloud-based inventory management system.”
Parity Software has proven that they listened to their customer UPP. They have delivered the right additional applications to make this implementation successful. Riaan Wolvaardt, Head of Sage X3 Consulting at Parity commented: “The FMCG environment moves at a rapid pace, so companies like UPP need up-to-date business information and frictionless processes to keep up. Sage X3 is modular and flexible business system that gives them the agility they need to succeed.”