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Efficiency key to business growth

NEWS
By Henry Githaiga | June 29th 2021

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Most businesses are constantly evaluating ways to operate effectively and efficiently in managing the flow of materials from their suppliers to the production and delivery of finished products and services to their customers. In essence, they undergo three key phases: sourcing of raw materials or products, processing or packaging of products and services and marketing or sale of the end products or services.

In all three phases, the business processes are often not interlinked and mostly generate manual procedures that involve paperwork and physical verification. This is primarily caused by different systems applied by suppliers, internal business departments and diverse channels of customer interactions, subjecting businesses to inefficiencies and discrepancies that often impact customer satisfaction and delays in payment.

Jared Osoro and Mirah Shah (CEO Synresins), at the launch of SYSPRO and Strathmore research findings on the implementation of technological aids ERP software in Kenya’s Manufacturing industry.

Often businesses turn to Enterprise Resource Planning (ERP), software to integrate and manage their operations efficiently. By definition, ERP software is a business management solution that streamlines and integrates processes across finance, marketing, manufacturing, HR, procurement, supply chain (warehouse, inventory, distribution) and other departments. ERP software enables businesses of all sizes not just enterprises to collect, store, manage and interpret data for operational efficiency and quick decision making. However, the deployment and applications of ERP have often been restricted to internal processes ranging from procurement of material to internal processing leaving out linkages to external parties.

Businesses are now seeking to adopt newer versions of ERP software that create a seamless link between procurement of raw material, processing and the direct provision of services and goods to customers. One such system is SYSPRO 8  that offers businesses the flexibility to deploy on-premise, in the cloud or both. It has Artificial Intelligence applications built into its user-interface complete with chatbots that can interact with customers and suppliers. For manufacturers, these new applications enable them to manage their inventory and ensure that they produce products that can directly be sent to market without accumulating unused stock.

“The new ERP has enabled us to enhance our quality assurance. We have put controls in our system that ensure no product can be sold to a customer without our lab team approving it. When a product is ready for sale, the sales team cannot generate an invoice until the lab team approves the product on the system. These configurations enable us to guarantee the quality of our products and ensure internal processes are adhered to,” says Mira Shah the CEO of Synresins Limited a mid-sized company that is the largest manufacturer of synthetic resin in East and Central Africa.

Synresins has also applied the ERP towards tracking its raw materials and managing the cost of acquisition most of which is imported. While importing involves dealing with many agents, paperwork and payments the module has enabled Synresins to track the raw materials they import, the cost incurred and the time it takes to get them from the supplier.  Before the deployment of SYSPRO 8, it took a week to consolidate the costs and reports. Today the system updates real-time saving the company a lot of man-hours.

“Our transition to SYSPRO 8 had many challenges, but through tremendous support from the SYSPRO team, we were able to navigate through and enjoy the benefits of the upgrade. Despite the teething problems we experienced during the upgrade, I would highly recommend SYSPRO 8 as it has great features” Mira added.

Despite the challenges, the company says the ERP’s ability to quickly analyze complex data, get business insights, make timely decisions, eliminate mundane tasks and reduce the number of man-hours in admin related tasks has seen a return on investment of about 90% and a 40% increase in employee productivity.

While ERP’s have traditionally been more geared towards managing processes within industries, their applications stretch beyond this into supply chain management and service delivery.

“We were looking for a solution that could integrate all the departmental systems and accelerate business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies. We also wanted to manage our processes centrally and have control of all our operations especially with suppliers and customers,” says Alex Kimondo, an ICT Manager at Mission for Essential Drugs and Supplies MEDS, which is a faith-based, nonprofit offering Supply Chain Services in Warehousing and Distribution of Medicines and Medical Supplies.

MEDS business processes were running on various unintegrated third-party applications. This made it time-consuming and tedious to get an end-to-end view of all its operations. The organization sought a solution that could give better control of its operations, simplify its supply chain management, and increase operational efficiency.

After deploying the ERP, MEDS has seen tremendous improvement in collaboration between departments, which has in turn improved efficiency across the organization. It has also gained greater visibility of operations, increasing speed, efficiency and overall customer satisfaction. By automating many processes within the supply chain, MEDS has seen employee productivity increase by about 15% while operational efficiency is up 85%.  This came by way of utilizing the AI functionalities of the ERP known as SYSPRO Avanti.

“With many restrictions placed on businesses by the pandemic, our marketing team has been forced to work remotely. Thanks to SYSPRO Avanti, our operations have not stopped. We have continued to distribute commodities without a hitch since the officers can check available stock or place orders from anywhere, anytime,” said Kimondo.

The organization has also eliminated the challenge of managing capital expenditures using the SYSPRO 8 Assets Register solution. MEDS is now able to get up-to-date real-time information on the value of all assets within the organization.

“An additional benefit is the seamless customization and integration framework that has enabled information exchange with third-party applications. MEDS has benefited from this feature by easily integrating its Labware application used in the Quality Control Laboratory, the human resources application and the barcoding solution used for order processing in the warehouse,” Kimondo added.

While there are still teething problems in the ERP adoption process including hesitancy by customers and suppliers, if well implemented and integrated, ERPs can easily transform businesses and organizations by eliminating inefficiencies within supply chains. The application of Artificial Intelligence and chat-bots will also create new direct market linkages with customers enabling businesses to respond to customer demands in real-time. 

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