ERP for printing and packaging

For many years, a common sentiment in IT circles was, "No one ever got fired for choosing IBM." Although many competitors could justifiably argue that their systems were faster, more innovative, had a better price-performance ratio or were cheaper to maintain, everyone knew that an IBM box would work.

As electronic hardware became more reliable, this argument became less persuasive. IBM suffered, eventually being forced to re-engineer its business to fend off competitors. The 1990s saw the rise of Enterprise Resource Planning (ERP) systems, leading to the emergence of such top providers as Oracle and SAP. Again, the perception was that the selection of programs from a leading company was a safe option.

However, there's a world of difference between buying a box of electronics and buying software. The top three attributes of an ERP package are fit, fit and fit. It is particularly tricky to integrate a generic manufacturing ERP solution into a packaging or printing business. The total cost of ownership is likely to be very high, adversely affecting the achievement of any return on investment. More significantly, the risk of complete project failure can be very high.

Generic ERP systems present a fundamental challenge for packaging and printing organisations. They are designed to address a set of manufacturing problems that differ from the special circumstances of these sectors. These differences are best illustrated by considering a few functional areas.

Estimating

Fast, powerful and accurate cost estimation has always been fundamental to packaging and printing businesses. In printing and converting, there are many competitors who manufacture the same products, with many client decisions being based on price. Ultimately, printers compete on service and responsiveness.

So how would you try to quickly formulate an estimate using an ERP system? Initially set up a bill of materials (BOM) and production routing for the product. This is problematic, as BOM software is essentially designed for the assembly of diverse components. Such fundamental concepts as impression size, number up and number on, grip allowances, and web cutoff lengths are completely alien to manufacturing ERP systems. Furthermore, manufacturing ERP systems have not been developed to address the concept of ink and varnish coverage, so the quantities of coatings required must be manually calculated.

These restrictions cause delays and errors, but the real issue is that manufacturing ERP systems have no mechanism for automatically calculating the make-ready and run times of each production process. This is because, in the ERP world, the creation of BOM and production routing data is a relatively leisurely process following a long period of production engineering trials. However, printers undertake 100 new and unique jobs a week. They may also prepare 100 or more quotations, which need to be turned around in a timely manner for clients. A sophisticated, automated and efficient method of calculating make-ready and run times is essential, based on machine speeds and capacities.

Furthermore, most ERP systems do not incorporate sophisticated pricing functionality. Setting the price thus becomes a manual process. These standard systems are in marked contrast with such bespoke estimating systems as Radius Solutions' PECAS Vision. This can be configured to incorporate all the most common print and folding signature formats. Estimators simply assemble the format they want from a list. The system is designed to automatically calculate paper weight, based on area and GSM, with coating quantities based on coverage. PECAS Vision can calculate make-ready and run times, automatically based on the performance capabilities of the equipment. It is possible to generate an accurate cost in minutes. In seconds, it is possible to compare the cost of running on a different print machine, or when using a cheaper board type. Sophisticated price-modelling software is available to fine-tune the prices quoted to the customer.

Standard ERP systems designed for manufacturing companies do not address these requirements. The development of bespoke modifications is time-consuming, expensive and fraught with risk, as such modifications must be maintained if the company decides to upgrade technology to take advantage of more efficient hardware or new software enhancements.

Manufacturing orders

Manufacturing orders are used to both plan and control production. Generally, such functions of ERP systems have difficulty in dealing with routine printing and converting methods. This is because ERP software is designed for businesses producing standard stocked products. In an ERP system, the manufacturing order is generated from the BOM and production routing. It is thus necessary to create a BOM and routing system each time.

As PECAS Vision was specifically designed to meet the needs of the printing and converting make-to-order environment, it is efficient and straightforward to produce a manufacturing order for a new product. It is necessary to simply select the appropriate sections from a predefined list. PECAS Vision then automatically calculates the necessary paper and coatings, together with machine make-ready and run times.

Scheduling

Do you routinely run more than one job on a sheet? If so, you will find that standard ERP systems' manufacturing orders aren't designed to address this operation. Many ERP systems do not have finite scheduling systems as standard functionality. ERP systems generate manufacturing orders by running an MRP program and expanding the BOM. This is fine for mainstream manufacturers, but it is not good for printing and converting.

By contrast, the PECAS Vision Scheduling Assistant knows that all the processes are related under the same manufacturing order, ensuring that physical interdependencies are applied. It is apparent that bridging the gap in 'fit' for standard ERP systems is not trivial. It has been suggested that the solution could involve bolting on a cost-estimating system. Following closer examination, this becomes a difficult challenge. If sales estimation is operated as a stand-alone system, it is necessary to establish duplicate customer, item, raw material and work centre data to generate a solution. This approach is hardly likely to increase efficiencies and reduce errors.

However, the fundamental gap relates to manufacturing orders. The basic structure of general manufacturing ERP systems and defining how a product is manufactured is totally unsuitable for print production and leaves the system incapable of a good fit, even when heavily modified.

For many years, printing and packaging operations have explored the use of manufacturing ERP solutions, establishing that it is difficult to make these support efficient operations and still derive any return on the investment. There have been few viable alternatives for many years. If a company requires a fully-integrated ERP solution that can address any combination of multi-site, multicurrency, multi-language, multi-product production capabilities, with a global reach, it would typically turn to a large, generic ERP provider. Niche products for industry-specific solutions often only have single-site capabilities with limited functionalities. Such companies often only have a small client base.

The giant ERP companies remain strong, and there are numerous other ERP consolidation organisation that offer a very broad portfolio of ERP solutions that may be sold to packaging and printing organisations. However, their clients may quickly feel the lack of commitment to their industry. Roadmaps for industry-specific development may be hazy at best.

As niche providers become larger and more established, they will become the most viable option for companies requiring solid, long-term industry-specific solutions that can deliver strong ROI.

Concluding remarks

Radius Solutions has been at the forefront of this change in the marketplace, as mid- and large-sized packaging and printing organisations turn to Radius, relying on PECAS Vision to run their organisations. With an exclusive focus on bespoke industry solutions, Radius is pleased to be the provider of choice for packaging and printing companies wanting to streamline their business operations, enhancing response to customer needs and gaining access to critical business information.

CONTACTS

Radius Solutions/PECAS Vision

North American Headquarters: +1 312 6480800; e-mail: info@radiussolutions.com

European Headquarters: +44 (0)1246 290331; e-mail: infoUK@radiussolutions.co.uk

Website: www.radiussolutions.com