ERP Upgrade Enables Direct-to-Consumer Model for Avery
QADβs latest cloud-based enterprise resource planning system has helped Avery better integrate its operations to provide the flexibility needed to depart from its traditional big box pallet model.
Day one of go live with the upgraded ERP system at Averyβs manufacturing site in Northampton, UK.
The Amazon Effectβin which consumers expect to be able to get exactly what they want, how they want it, when and where they want itβis impacting all reaches of business and manufacturing. Averyβs operations in the UK, France, and Benelux, where the company makes primarily pressure-sensitive adhesive labels, has seen its business shift from selling primarily to wholesalers to shipping and selling more direct to consumers.
This has meant big changes from Averyβs traditional pallet-based shipments. No longer does the labeling company sell only large multi-packs to wholesalers, who in turn sell to dealers, who then sell to consumersβmore and more, Avery is shipping directly to the customer. Itβs a change that was a fundamental strain on its existing enterprise resource planning (ERP) system. Although the company was generally happy with the old system it had in place, last year they decided it was time to talk with QAD about an upgrade.
βIt was extraordinarily resilient. But it had been installed in 2001, had heavy customization, not many updates, and the customizations we had didnβt allow us to transition from that big box pallet model to third-party wholesalers and contract stationers,β says Sean Flanagan, operations director for Averyβs UK and France operations. βThe more we were wanting to deliver direct to dealer or consumer, the more the system was tripping us up.β
Avery dispatches its first shipment after completing the picking process with the new QAD capabilities.One of the biggest issues that the heavy customization of the previous ERP system caused was that the system had been designed to pick single quantitiesβthe outer packages that typically go to wholesalers. βIn our foundation businessβthatβs still important to us, by the wayβwe might make five or 10 boxes of labels, and then we would package them in an outer box. That outer box would be sold to a wholesaler or contract stationer, and then that wholesaler would break down the box and sell it to dealers in smaller packages,β Flanagan explains. Averyβs new business model, however, needed to be much more dynamic in the way it operates shipping and logistics. βWe wanted to be able to ship in single packs and multiple packs, and it was difficult to get our old system to do that.β
Linking disparate systems
Averyβs previous ERP linked to a number of other systems within the business. The finance package was completely separate, which created problems, Flanagan says. A separate planning model also created issues with continuity across the enterprise. βAll planning in operations was done via an Excel planning model that had no interaction with stock and materials availability and finished goods availability,β he explains.
QAD Adaptive ERP, based in the cloud, was able to bring all these disparate systems together to help Avery get better visibility across its operations. Designed specifically for manufacturing, it supports industry-specific business processes and flexible deployment options. It moved Avery away from spreadsheets that were not well understood by employees to process maps with training embedded into the system, says Peter Jones, business consultant for QAD whoβs been working with Avery in the UK, Australia, and continental Europe for about eight years. βAny small tweaks can be done fairly easily and are built into those process maps,β he adds. βTraining records are built into it. Statements of work in procedures are built into it. This helps with implementation and the training of people.β
Sean Flanagan, operations director for Averyβs UK and France operationsThe really big win from Flanaganβs perspective was the ability to use planning systems through QAD. βThat changed our world because our planner has now got total visibility of raw materials and a link to raw materials and also to finished goods,β he says. βWe had a planner who spent almost eight hours a day planning. Now our planner spends just two hours a day planning and then is doing more strategic work for the rest of the day. Thatβs really been a huge, huge change for us.β
With the freed up hours, Averyβs planner has been able to spend more time optimizing the production capacity, adding different pieces of equipment into the plant that wouldβve been difficult to do with the old Excel model. βThe world for us has become much more dynamic,β Flanagan says. βWeβre adding new equipment every couple of months now. That was incredibly difficult to include in our old planning system. And now weβre able to do that.β
The previous ERP model was also very dependent on a third party. βThat hurt us quite a lot. If we wanted to add customers, we were completely dependent on something outside; a link with other systems,β Flanagan says. βThe beauty of what weβve got now is weβve eliminated a number of alternative systemsβpaper or Excel-based systemsβwhether that be labeling, planning, shipping. More or less, all that has come under the umbrella of QAD, which includes financeβ¦ Now weβre all on QAD and that links throughout the whole process, where the warehouse automated solutions product talks directly to finance rather than going through interfaces that we have to manually set up.β
Benefits (and trepidation) around the cloud
Flanagan does not consider himself a pioneer in any way, and he was very reluctant to take Averyβs ERP system into the cloud. βI was 100% against it,β he says. βI really had serious doubtsβabout connectivity, about ownership. Our old system, despite its restrictions, was robust and it served us well.β
Nonetheless, Avery has been taking its ERP move to the cloud slowly, Flanagan says, avoiding any intrusive customizations, but heβs happy with what heβs seen so far. Reliability has been a big benefit, he says, but he expects bigger benefits to come as they expand further into the cloudβs capabilities. βI think the longer-term benefits of the cloud is still to come for us,β he says. βAs we talk about upgrades and changes, they should be a lot simpler than they wouldβve been if we had been on premises.β
One of the reasons Avery decided to move to the new ERP system was because of an issue that might sound familiar to manufacturers in all industriesβa retiring workforce and difficulty finding skilled workers. βWe had one person based in Paris who wished to retire, and only goodwill kept him in the company,β Flanagan describes. βHe used to do all our customizations, all our configurations. We were very dependent on one person.β
Not only has that situation gone away, but the region has reduced its system support from the team of five it had four years ago to just a team of one dedicated to the system. βWhat has been a great help to us is the process owners have become the systems experts,β Flanagan says, explaining that the various managers of production, e-commerce, etc., have been able to become highly skilled in using the QAD system. βWeβve devolved what was an external system expertise largely to the operational team.β
Putting ERP into the cloud makes it easier to deploy, scale, and secure. βWe showed them that the cloud meant it took away the need for them to have people employed full time,β Jones says. For a company like Avery with a limited IT department, it can be difficult to manage the growing complexity and functionality of todayβs ERP system. Now, with Averyβs ERP in the cloud, βQAD is offering back-office support, monitoring performance, doing patches, upgradesβitβs all looked after by QAD.β
This saves the investment that Avery requires for IT personnel, but it also saves the capital needed to invest in other assets, notes Acyr Borges, QADβs vice president of packaging, commenting on the scalability of ERP in the cloud as well as the agility to make changes.
Moving forward
The cloud-based system also gives Avery the βagility and fleetness of footβ it needs to move forward, Flanagan says, noting the manufacturerβs plans to grow and evolve its ERP system to provide even more capabilities. βYou sort of donβt know what you donβt know until itβs in front of you. But what I think weβve got now is a solution that weβre growing in confidence with that will allow us to be able to control our supplies, control our raw material storage, control our planning, control our finished goods storage and shipmentsβand allow us to be flexible in the new consumer world.β
QAD has been in continued talks with Avery about its next stages of upgrades. The new system and its basis in the cloud will make those changes easier. βItβs now small, incremental changes rather than a huge change,β Jones says. βWe now look after those changes and can do them in an incremental fashion.β
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