Inventory & Accounting ERP Software Blog

Stop Comparing ERP to Introductory Software

It can be easy to get caught up in a game of comparisons when searching for new software.  And in some situations, it is very important to compare different solutions side by side, especially when it comes to things like data migration, implementation costs and reading the fine print on proposals.

However, trying to compare different systems can become extremely dangerous when not comparing apples to apples. This becomes a significant problem when comparing introductory software such as QuickBooks to fully integrated ERP systems.  During initial discussions, companies using introductory systems can experience sticker shock when looking at more sophisticated ERP solutions, and we often hear the question, “How come your software is more expensive than my introductory system?” The answer? Because they are two completely different solutions, designed to fulfill different needs and appropriate for companies of different sizes and sophistication.

Trying to compare introductory software to ERP is like trying to compare playing a round of golf with one club vs. a whole bag.  Sure an amateur golfer could theoretically play a whole round of golf with only one club, but it would take a lot more time and effort than if you have a full bag of clubs and tools to choose from. This is the same for introductory software.  Although it can help you manage processes and streamline some operations as a small business, if you want to grow and remain competitive, you will eventually have to upgrade to a system that provides advanced tools and functionality.

Below we expand further.

Functionality and Costs

Since I used costs in my example, we might as well start there.  Yes, the costs do vary significantly between QuickBooks and ERP, just like they do between one golf club and a whole bag.  With ERP the amount of functionality available increases significantly.  This includes built-in functionality like the ability to manage multiple locations, units of measure and multi-currency, as well as additional features like lot tracking, eCommerce integration, warehouse management, contact management and CRM. In addition, ERP solutions are built for growing businesses and so do not provide limits from a database-size or transaction-volume standpoint.  Because ERP solutions are designed to be all-in-one systems in terms of inventory and accounting functionality, the costs are comparable to purchasing multiple standalone solutions, with the benefit that all components are fully integrated.  Inventory data flows through to purchase and sales orders and accounting information is streamlined throughout the entire system.  ERP vendors also provide extensive data migration and set-up help which increases the initial costs, but can save you money and time compared to having to do these things manually. 
What is ERP?
Implementation Timeframes

Just like learning how to use all the clubs within your golf bag takes time, so does implementing a full ERP solution.  There is more work required to set up the system because it is designed to manage more processes, and automate more tasks.  To break it down further, implementations typically include: data migration, installation of hardware and systems, configuration of system parameters specific to your business, and training.

Data Migration:

Good software vendors will manage the entire data migration process to ensure there are no issues with data set-up.  This includes extracting the data from your existing software, “massaging” the data in terms of clean-up and structuring and then moving the data into the new system.  This is one of the most important aspects of the implementation process and can be very time consuming for the vendor.  Even though some businesses would prefer to move the data themselves, this almost never goes as smoothly as planned.  ERP vendors have the resources in place to ensure the information is the most up-to-date and accurate come go live. They also have the necessary skill set and knowledge to retrofit the old system’s extracted data so that it works and makes sense in the new system.

Configuration of System Parameters:

With ERP solutions, vendors will aid in the system configuration that is specific to your business.  This includes setting up receivable and payable limits, product categories, “flags” for dealing with specific actions such as customers over their credit limits and bank accounts.  Setting up the system properly from the get-go can foster best practises and good habits for maintaining data and entering information.


Training is another area of software implementations that takes up a lot of resources.  Most vendors will provide generous ballparks when originally estimating this cost as it depends on several variables.  For example:

The more people who need to get trained the more work is involved. It is easier to sit down and train a group of 5 people than a group of 30.
The amount of experience your team has with software and technology will also impact how training goes. If employees are used to working in similar systems and are more “tech savvy” this can make the process easier.  However, if employees are “too tech savvy” they may also become bogged down with some of the details in the system which can actually delay the training process.
If you have to train the same employees on multiple areas of the software, this can also add to the time required and costs.

Installation of Equipment and Hardware:

More advanced software will also require updated hardware and servers, especially for on-premises solutions.  This is one of the advantages of choosing a cloud-based solution if you do upgrade, as equipment management, IT maintenance and data backups become the responsibility of the software vendor.

Lastly, the vendor’s schedule will also play a role in why implementations take so long.  Given that each implementation requires significant work, vendors must schedule these accordingly.  Most software vendors will schedule implementations on a first-come, first-served basis and so it does not make sense that they would be able to get a new customer up and running overnight.  In order to ensure you get the timeframe you want for an implementation, make sure you begin the software search process well in advance.

True ERP solutions are designed to replace introductory systems in order to accommodate significant company growth. Therefore the two are not directly comparable.  An upgrade to ERP will include an increase in costs, but also an increase in automation, functionality and efficiencies.  In order to make the best decision for your business it is important to understand the implications this has on your business and the opportunities it can provide.  The best way to grow your business (and improve your golf game) is to get the right tools and training in place.

By |

Why Now is the Right Time to Implement Food Distribution Software

Implementing a food distribution software system into a business is no easy task. It requires coordination across multiple levels of an organization in order to arrive at a decision that works for everyone. With such a high level of synchronization needed, a common result that often occurs is to abandon the search process and revert back to older and perhaps outdated business processes. However, for most companies in the food industry, there will come a time where prolonging the inevitable will put growth at risk.  Although it may never be the “perfect” time to implement software, the more you delay the harder it will ultimately become.  Consider the following reasons why now is a good time to finally implement the food traceability system you need:

More Flexibility in Budget:

Many companies find themselves in the following predicament. They are growing at a favorable pace and need software to manage the increased order volume and inventory. Unfortunately, quality software systems that are needed to manage these emerging processes and other food distribution specific needs are not cheap and require a considerable financial commitment. A company’s decision makers must weigh these costs against the perceived value and benefits to determine if the investment in software is necessary.  More often than not, at some point the need for software will no longer be a luxury, it will become a necessity. Despite the financial commitment, after a successful software implementation you should be able to re-coup those costs. For example, the number of man hours saved by automating older manual processes can represent a considerable portion of the costs.

Industry Landscape

A company can go through many searches and each time come to the conclusion that the cost of implementing an integrated software package outweighs the perceived benefits. In these situations, they often revert back to older, manual processes or outdated software that can no longer fulfill their needs. However, for most companies there will come a point in time when these manual processes will no longer be sustainable and the need for a more streamlined approach will become evident. In many instances remaining stagnant and not taking a macro-level view of the company’s processes can hurt a company and stunt growth. Being versatile and proactive in analyzing current processes is a strength of successful companies. The efficiencies gained with new software can take a company to a new level of success not attainable without an upgrade.

In other instances, deciding on whether a company should implement new software is no longer an option, it becomes mandatory. In the food industry specifically, companies must have proper lot tracking systems in place in order to easily trace a product throughout the supply chain and to also remain FDA compliant. This need was highlighted recently in Western Canada as major wholesaler Costco recalled several products under the brand name “Organic by Nature” due to possible Listeria contamination, as reported by CBC News. Products affected by this recall included Organic Sweet Peas, Frozen Butternut Squash and Vegetable Medley. Lot tracking/traceability functionality inherent in certain food distribution software enables a supplier to keep track of which customers received specific shipments of items and when they were received, a feature that is necessary in facilitating an effective and timely recall. For industries that deal with products that can be potentially harmful to public health (i.e. food, pharmaceuticals, etc.) having the proper software system in place is essential in maintaining public safety and staying compliant under FDA regulations.
Click here for more information on Lot Tracking/Traceability functionality
New Options Flood the Market:

Costs are not the only reason a company may decide against installing a software system. In many instances, company decision makers elect to maintain the status quo mainly because none of the options available at the time made sense. Fortunately, in this scenario it is very likely that during the time you have delayed the search process, new options have entered the marketplace that can now meet your needs best. In addition, software companies are constantly trying to expand and refine their offerings and subsequently place a huge emphasis on research and development to be able to offer clients a complete solution. Perhaps there was a software package you really liked, but it was missing a key feature that could have helped streamline your operations. It is always wise to revert back to these companies to see if they have developed the feature you were hoping for or something similar. Many software companies take suggestions from clients and potential clients on how to improve the software, and perhaps your pain point was very common and they took the time to address it in their latest update. Either way, it is always wise to stay privy to the latest offerings in a constantly evolving market place.

More Time and Online Resources:

Many companies that are installing software for the first time or are replacing outdated systems may not necessarily have the means for an expansive and intricate software search. For the owner of a food distribution business that is growing there are certain activities that take precedent, and unfortunately a lot of those involve putting out fires that proper software could have helped avoid.  In addition, hiring a consultant or creating a task force might not be possible due to the lack of resources available. However, as the company grows and more efficient processes are established and more staff is hired, the owner or primary decision makers will have more time available to dedicate to a software search. In addition, there are an abundance of resources and websites dedicated to helping individuals under this type of time strain. It is important to make the search a priority in order to find the best solution for your business.

For many growing food distribution businesses, it is difficult to allocate any time to a software search. And for those that do, it becomes just as easy to get frustrated and give up. However, as time passes different variables such as budget, time and industry change. There may not be a perfect time to find a new solution, but the longer you wait, the more difficult it will become.  In order to continue to grow, start the search now to find the system you need. 

By |

Warehouse Management System: What to Look For

All wholesale and distribution businesses will have to manage their inventory one way or another.  For small and start-up companies, this can often be a manual process when order volume is still low.  However, as your business grows, there will come a time when inventory management and accounting ERP software is the next logical step.  Fully integrated ERP systems are designed to manage all aspects of a company’s operations such as accounting, inventory management and contact management, and will also include basic warehouse management functionality such as:

Multiple warehouse management
Consolidated pick slips
In-transit warehouse management
Ability to print shipping labels
Pick/Pack/Ship workflow management

Learn more about warehouse management functionality
Although this basic functionality might work in the beginning, if your business and warehouse operations continue to grow, it will be time to start evaluating advanced warehouse management systems.  A common indicator that your business could benefit from more advanced functionality is when you have the following requirements:

Ability to pick the same SKU from multiple locations within your warehouse
Mobile picking and barcode scanning

When it comes to advanced warehouse management systems (WMS), you have two options.

#1. Invest in a WMS System that can be integrated with your ERP solution. 

True WMS systems are best suited for large, multi-national businesses, and are designed to be integrated with existing ERP solutions.  These types of systems will provide functionality such as:

The ability to automatically allocate inventory to a specific location within the warehouse when receiving product (allocate put-away)
The ability to show you the quantity of SKUs that can fit into a certain location based on the dimensions of the bin/shelf

Although true WMS systems are a great piece of software for managing large warehouses, because of their sophistication, they also come with a hefty price tag. If your business requirements fall somewhere in between basic warehouse management features and a full WMS system, consider option two below.

#2. Invest in ERP Software with Built in Advanced WMS Features.

Some ERP solutions will also include advanced warehouse management features as part of their integrated system.  Although this advanced functionality is not designed to replace the need for true WMS software, it can aid growing businesses in better inventory and warehouse management, at a much lower price tag and with a shorter implementation timeframe.  Key features to look for include:

Integration with tablets and barcode scanning devices
Ability to set up non-stocking and stocking locations
Stocking location priorities and ratings
Empyt bin/shelf availability
Movement tracking of product
Cross docking

Integration with tablets and barcode scanning devices allow for mobile picking throughout the warehouse.  iPads, the Microsoft Surface or similar Android tablets can be mounted to equipment such as carts and forklifts, which allows users to pull up order information while moving throughout the warehouse.  These mounted tablets can then be used in conjunction with handheld barcode scanning devices in order to scan product during the picking process.

With advanced functionality, each location within your warehouse can be set up as a stocking or non-stocking location with different shelf priorities and ratings.  This functionality allows you to see what inventory is still physically in the warehouse, but will distinguish between those products already allocated to an order and those still available to be picked.  Specific shelf priorities and ratings ensure that when you do pick an order, you’re doing so by following the most efficient pick route.  The system will also show you where you have shelf space available when receiving product, and if necessary you can pick an order before putting product away (cross-docking).

By |

3 Smart (but Incredibly Obvious) Questions to ask Before an ERP Implementation

An ERP implementation is no walk in the park and there’s really no sugar coating this fact. Despite this, you have still decided to purchase a new ERP software system because of the benefits and efficiencies it can provide your business. Unfortunately, there is a long road ahead from the time you shake hands with the vendor until you actually start realizing increased productivity. You will encounter software vendors who will make this transition as easy as they possibly can and you will meet other vendors who will leave you dreaming about simpler times with your old system. To avoid the latter of these two experiences, here are three important (but incredibly obvious) questions to ask software vendors prior to your ERP Implementation:

Does this software meet the specific needs of my business?

There is software that works, and there is software that works for your business. It is important to note this distinction to ensure that the system is not only functional, but that it also aligns with the needs and culture of your organization. For example, a pharmaceutical distribution company will have a plethora of government regulations that they legally need to address. In this instance, it is imperative to purchase a system that addresses these processes in the core of its product offering. In order to find the right system for your needs, you must also find a vendor who will take the time to learn about your business. Very often, sales representatives will immediately want to show you a demo without first taking the time to learn about your unique processes. This can become problematic down the road if you realize the system lacks certain functionality that you need, as such in our pharmaceutical distribution example. No two businesses are identical and each will vary in the way they operate, you need a vendor who understands this and doesn’t take a ‘cookie-cutter’ approach to selling software.

Will our employees be fully trained on how to use the software?

As with any new system or process there will be a learning curve that users will have to deal with. There’s no avoiding this reality because every employee varies in how easily they can adapt to new technology. Most vendors will provide training documentation and videos explaining how to properly use their software; however, this should be used in conjunction with hands on training. No matter how user-friendly a system may be, there isn’t a replacement for the value of hands-on vendor conducted training. Training videos and documentation may help your employees get a feel for the system, but having a person training your team on new processes and explaining how different parts of the ERP are connected is invaluable to their understanding of the system as a whole. You will want to make sure that your vendor properly trains your staff on the system either in-person or remotely via webcast.

Will you leave us “high and dry” after go-live?

What happens following go-live is perhaps just as important as the implementation process itself. You can be trained on a system for weeks and still not be completely comfortable. That is more of a testament to the fact that ERP software is incredibly robust and to learn the “ins and outs” of any given system is a difficult task for anyone. Questions will arise that were not covered in the initial training and you want a vendor who is conscious of this and is timely in how they deal with these situations. An effective practice some vendors follow is having the person who conducted training and implemented the system be available for questions in the weeks following the go-live date. Because this individual already has a working relationship with your employees and understands your business from their time on your premises, they will be the ones best suited for any additional questions.

After reviewing the three questions outlined above, you can clearly see that they are incredibly obvious. Nonetheless, people often take shortcuts in their software search in order to get to the finish line the quickest. Take your time with your search, this is a major decision that will affect your business for years to come. As such, it is important to ensure that you’re on the same page as your vendor and the software you choose aligns with the needs of your business and employees.

By |

Business Process Automation – Identifying Bottlenecks

Building on the previous blog post about Business Process Automation (“BPA”), let’s now explore some ideas on how to identify processes that could (or should) be automated, and also how to evaluate the potential benefits of doing so. This is important, because there will be at least some level of cost associated with any BPA implementation, even if it’s just an initial investment of time.

Given that we’re talking automation, it stands to reason that the starting point in identifying processes that could benefit from automation would be examining manual processes. This extends beyond simply looking at activities like manually keying (or re-keying data), and includes processes like manually walking pieces of paper from the office to the warehouse, and stockpiling transactions (even on a computer screen) for a person’s review before processing. It’s important to note that some of these steps are necessary – you would probably want to retain human review of orders held for credit problems, for example – but in many instances these bottlenecks can be alleviated with thoughtful implementation of BPA.

I’ve found that a very useful tool for kicking off an analysis is to get employees to make two lists:

Repetitive activities that require very little thought process or decision making, but that have to be performed regularly
Regular activities that are time consuming and involve some type of manual data entry

In each case, I ask them to estimate the time they spend per item on the list, either daily or monthly. Those will provide a good and objective starting point, and we investigate  further from there, placing a little more emphasis on the more frequent and more time consuming items. It is important to note, however, that one person’s list can impact another’s. If Joe has a task that doesn’t take much time – perhaps just a few minutes daily, but until he completes that task, it prevents Sue from performing her tasks, that’s a bottleneck.

Here is an  example of a bottleneck that was identified, and resolved, in a simple Business Process Automation project:

A distribution company was moving from manually  individually generating and emailing invoices in PDF format, to automatically emailing PDF invoices right after shipping. In the existing manual process, the last step before printing invoices was a review of the shipped sales orders to ensure that (a) shipping charges had been updated and (b) tracking numbers had been inserted. The controller was adamant that the same checks would need to be performed (by him) before invoices could be emailed. This would result in almost no time and effort being saved.
Learn about the various automatic reports available to ERP users
The solution was to automate not just the emailing of invoices, but also the checking process. Instead of order status going directly from “Shipped” to “Invoiced”, an additional status “MissingFields” was inserted in between these. Now, as soon as an order was marked as “Shipped”, an automated process checks the order to ensure that the shipping charge and tracking number fields are populated, and if not, it flips the status to “MissingFields”. The controller has a screen showing just these orders, and he can insert the missing data and manually flip the status to “Shipped” just for those orders missing one or both of those items – typically fewer than 5% of the orders on a daily basis. So now, over 95% of the orders shipped result in automatic invoicing with no stops or human intervention.

So how do we evaluate the benefits against the costs? In the next post on this subject, we’ll explore some options for doing just that.



By |

Optimizing Inventory Beyond ERP: Spotlight Interview with EazyStock

Every wholesale distribution business knows the importance of proper inventory management.  Your company’s ability to efficiently buy and sell product is what dictates success.  This becomes even more important as wholesale distribution businesses begin to sell through multiple sales channels including eCommerce.  In order to properly manage your inventory, most wholesale distribution businesses turn to fully integrated ERP software.  ERP software is designed to manage all aspects of a company’s operations including:

Inventory management
Order entry and processing
Contact management and CRM
Warehouse management
eCommerce integration and more

From an inventory management standpoint, proper ERP software will include functionality for picking, packing and shipping, receiving, replenishment and purchase orders, as well as more sophisticated inventory management tools such as landed cost tracking and lot tracking.  However, depending on the size of your business, sometimes managing inventory is not enough.  This is where advanced inventory forecasting and replenishment software comes into play.  These more sophisticated systems act as add-on solutions for more in-depth analysis of your company’s inventory.  They aid in demand forecasting, seasonality analysis to automatically find and assign a seasonal profile to each item/location record, multi-location planning, promotion management and more.

Blue Link recently spoke with Mark Grimes, VP Global Sales and Channel Partner of EazyStock, an advanced inventory forecasting and replenishment software, to learn more about the industry and how businesses can better manage their inventory.
Learn more about EazyStock

Samantha Hornby: “Mark, tell the readers a little about yourself. Who are you and where are you from?”

Mark Grimes: “My career spans over 20 years in software manufacturing and distribution. I started out in Dallas, Texas with an ERP company that was expanding globally. With that company, I moved to China and climbed the ranks in the sales organization till I eventually became the Managing Director for China. After 17 years I decided to move back to the USA.  That’s when I joined EazyStock. I’ve been married for 16 years and have 11 year old twins (boy and girl).  When not spending time with family I enjoy golf and fast cars. As a family we do monthly volunteer activities with Feed My Starving Children.  I believe teaching children it’s important to give back.”

Hornby: “Give us a little background on how EazyStock came to be and how it ties in with other systems being used by businesses.”

Grimes: “EazyStock is a division of Syncron. Syncron has been helping large corporations optimize inventory for over 15 years.  EazyStock developed from the idea that not only large corporations but also small to mid-size companies had issues optimizing inventory and could benefit from the same system as the big corporations.”

“Most distributors and wholesalers are seeking more from their ERP when it comes to optimization. With EazyStock, businesses don’t have to evaluate changing their ERP system anymore, which is a major undertaking financially and ties up a tremendous amount of resources. Inventory optimization software can be easily integrated into already established business operations to drive down costs and increase serviceability.  It is a win/win for both ERP platforms and the end users.”

Hornby: “What have you noticed is the main thing most wholesale distributors get wrong when it comes to managing their inventory?”

Grimes: “Thinking that their ERP system is handling everything.  Most distributors set static inventory procurement points that cannot handle the ever-changing replenishment requirements of their customers or market. Distributors are often blindsided by painful over ordering or costly stock out situations, which can hurt sales and customer retention. If not managed well, or as I like to say, “optimized” properly, these practices will eat away at a company’s profits and overall inventory performance.”

Hornby: “In your opinion, what is the biggest challenge facing wholesalers and distributors today with regards to inventory management?”

Grimes: “The biggest challenge we see today in the world of distribution is accurately balancing inventory levels with customer service demands.  In today’s environment, if you don’t have the product in stock when the customer wants it, they will go somewhere else and order from someone who has it readily available. In the past customers would accept back orders but that is not always the case today.”

“Distribution businesses need to keep inventory low to maximize profit margins, but they need intelligent systems to help avoid running out of high demand items. It is a difficult task for most distribution businesses to manage. Often times, these types of calculations are managed in Excel or done through manual calculation methods, but it is too costly and too risky for distribution businesses to not invest in more automated inventory management tools.”

Hornby: “You’ve touched on the answer a bit, but how can they overcome these challenges and optimize their inventory? Where does technology come into play in helping address these challenges?”

Grimes: “Distributors can leverage technology to eliminate the human error and give 100% accuracy to the inventory status at any given point in time. Inventory optimization software, such as EazyStock, further analyzes ERP data to give distributors the ability to more accurately forecast every SKU in real time. This results in inventory being in stock at the right level and at the right time.”

“By onboarding the right technology to support the ERP platform, businesses can lower inventory levels, drive up inventory availability for critical items, and eliminate wasteful labor costs along the way. The real challenge is getting the organization and employees on board to see how systematic change can drastically impact the business’ success. Most leaders in management, finance and operations will struggle to get the whole team on board because innovative changes “are not the way we’ve always done things.” Investing in the technology is important but getting the organization to buy into the vision is critical.”

Hornby: “Where do you see the distribution industry going in the future, and how do you think this will affect how businesses manage their inventory?”

Grimes: “There are over 330,000 wholesale distribution companies in North America. According to the Frantz Group, the US wholesale distribution industry is forecasted to grow at an annual compounded rate of 5 percent. With numbers like this, it’s imperative that the wholesale distributor stay competitive. Margins tend to be razor thin in distribution, so competitive companies will need to figure out ways to do things faster and more accurately to keep their customers coming back.”

“Additionally, Gartner released a report that the fastest growing companies are not the ones with the cheapest prices but the ones who are the easiest to do business with. Distributors need to innovate and invest into systems that keep their profits strong and their customers happy. To do that, distributors in almost every industry vertical will need to look to advanced systems that will help them better manage and optimize inventory across their sometimes very complex supply chain networks.”

Hornby: “If you were to give one piece of advice to distributors today regarding inventory management, what would that advice be?”

Grimes: “Decide if your inventory is an asset or a liability. Then take the appropriate action to turn it into an asset for your business.”

Mark is a seasoned enterprise software technocrat with a 20-year track record as a successful VP of Business Development, Managing Director, and Global Accounts Director in the manufacturing and distribution space.  Mark’s focus is to deliver consistent, profitable growth to the customer’s bottom line.  Mark leads with a passion to define and drive a clear inventory optimization vision through the use of software technology. He takes a leadership role in executing and maximizing the best possible value for the client.

To contact Mark: Linkedin: | Email:

By |

Transitioning from Legacy Business Management Software to Modern ERP

There are many reasons businesses decide to upgrade their existing technology and business management software systems. To name a few: software companies stop supporting legacy operating systems (think Windows XP), new technology and opportunities become available, businesses change processes or hardware needs to be replaced. In anticipation of these frequent changes, many modern software vendors provide “maintenance programs” in which customers pay an annual fee to get regular upgrades. This reduces the cost of purchasing new software outright and ensures the customer is on the latest version of the system, using the most up-to-date technology. In addition, troubleshooting issues through the vendor’s support department tends to be quicker and easier when people get to work with familiar and up-to-date systems. Internal systems need to be upgraded on a much more frequent basis than other business assets such as equipment and vehicles. Therefore, keeping up-to-date with product releases minimizes the amount of downtime required to implement a new version. For those businesses operating legacy systems the upgrade process becomes much more painful.

Most software vendors charge a percentage of total license costs each year as their maintenance fee, which ultimately pays for new functionality and the upgrade process. Depending on the software tier, these percentages can fall anywhere between 15 and 22%. When speaking with vendors about maintenance fees, make sure to ask about customization work as some vendors will charge extra to have this moved over. Even when receiving regular upgrades there will be still be work involved to update your existing version and test the system, although on a much smaller scale than when starting from scratch or moving from a completely different system.

If you have not been updating your business management software on a regular basis or are looking to move to a completely new system, there are still certain decisions that you can make in order to ensure the upgrade process is as painless as possible.

Choose your data wisely.
Data migration is just one aspect of the entire software implementation process, however, after employee training it tends to be the most expensive and time consuming. The right vendor will not only move the data from your existing system into theirs, but they will also work with you to clean up and “massage” the data so that you start with the right information. For example, vendors can assist in changing product codes or categories should you decide to follow a new standard. The idea with data migration is to focus on quality and not quantity – some data may not need to be moved over to the new system and instead can remain in old databases for referencing purposes. In some cases businesses don’t want to move over any information as a way to start fresh with their data, but at a minimum you will want to move the following information:

Customers with outstanding balances
Outstanding accounts receivable balances
Accounts payable balances
Active inventory items and pricing information
General ledger chart of accounts
Opening entries

Learn more about the data migration process. 
Map ERP to existing business processes.
When businesses don’t update their software on a regular basis, they can get stuck following specific processes which may no longer be relevant. When starting the search for new software it is important to organize workflows and processes by department and then break down why certain tasks are performed the way they are, and if there is room for improvement. There may be new technology available that can help automate processes which previously involved a lot of manual work. Finding a software vendor that becomes a trusted advisor will provide you with objective insight into how to better manage certain aspects of your business. By adapting your processes to fit with functionality offered in their software, it will save you time trying to come up with workarounds. Although this may involve more training and investment in the beginning, it will save you time in the long run.

By |

Blue Link’s A.R.M Contest Winners Announced

Throughout the month of March, Blue Link ran a competition open to all of our customers called the A.R.M Contest. Automated Report Maintenance, or “A.R.M” for short, is a rules based automated data and email update tool found in Blue Link Software. We are particularly proud of this feature because of the time-saving applications it provides its users such as:


Automatically generate daily, weekly, or monthly inventory reports on a specific date as chosen by the user
Email invoices to customers after orders are placed without any human interaction needed
Send website orders directly to the warehouse to be picked, packed, and shipped if they meet certain criteria
Automatically change the status of an order based on criteria being met such as payment received or product shipped

Despite all of the useful applications, there still happens to be one aspect of the A.R.M that we are not too fond of here at Blue Link … its name. Automated Reports Maintenance is a bit of a mouthful and frankly doesn’t capture essence of its functionality. As a result, we opened the floor to our customers to come up with names that they thought were more appropriate for this component. We had no restrictions on name length and wanted customers to be as creative as possible. We also had an incentive of a $1,000 cash prize awarded to the best name selected by our judges, just to add to the excitement.

After a month of submissions, we could not have been more pleased with the response we received. After narrowing the submissions down to our top two, our judges voted on a winner:

Automated Task Manager – Fred Pritchard, Golda’s Kitchen

As a long time user of Blue Link software and its A.R.M functionality, Fred sees it as an ATM more than anything else; “I think of ATM as a money maker.  It automatically prints pick tickets in the warehouse all day without any management involvement.  Orders are printed based on efficiency of pick walk, and labour costs are reduced.  We also use ATM to automatically transfer inventory from one location to the other based on sales needs.   Again, no one in management has to even look at what is happening, the computer does it all for you.   A true ATM in our case.”

Once we got the ball rolling with this contest idea, Blue Link decided that we also wanted to understand the many different ways that our customers are utilizing this functionality. With the help of another cash prize of $1,000, Blue Link also invited customers to submit a video or written essay explaining how the A.R.M has changed their business. We were once again very pleased with the results, but we could only choose one winner:

April Tobin – Qualifirst Foods

April had high praise for the sheer amount of time the A.R.M was able to save Qualifirst; “Thanks to Blue Link’s A.R.M technology, we have now stepped into the future of business operations. Implementing their automation into our day to day has created a seamless, productive, confident system we rely on. This has provided us with the extra time to dedicate towards sales, company growth, and employee engagement.”

In her essay, April went on to explain how some of this was achieved; “Because of this automation we no longer have to busy ourselves with emailing order confirmations, sending invoices, and following up on payments as Blue Link now does all this for us! They work behind the scenes every day to ensure our clients are contacted, so that we don’t have to.”
To Read April’s winning essay in its entirety, please visit our testimonial page.
We would like to thank all of our customers who participated in both contests, and congratulations to our winners Fred and April!

By |

Demonstrating the Value of Enterprise Software to Employees

Inherent in its name, Enterprise Software is a platform that will affect all aspects of a business. If you decide your company needs a fully integrated solution, the software selected will undoubtedly impact the sales, accounting, warehouse and operations departments to name a few. Due to the impact that a decision of this magnitude will make across an organization, it is vital to ensure your employees “buy-in” to the process and understand the need for a more sophisticated software system. In order to achieve this level of acceptance, you must demonstrate the overall need and value of updated software and innovative processes. Follow this general framework aimed at easing the transition for employees to new enterprise software:

Establish the pain-points of the business. The main reason for any software replacement search is to eliminate unnecessary pitfalls that employees are currently facing. If a business has no pain points and is running smoothly, there would really be no need to defer from current processes. This is vital to any software search and essentially involves taking an audit of how each business unit operates. Perhaps, an employee spends a sizable amount of their work day manually emailing invoices to customers, or maybe they spend a lot of time re-keying orders into the system, both situations represent operational issues that can be avoided if properly identified early in the search. Speak with everyone from the warehouse to the accounting department and everyone in between to ensure you have your finger on the pulse of the business.

Learn how to Eliminate Redundancies in your business with Automated Reports

Once you have established a business case for acquiring new software, it is vital to gain employee approval. Although employees have aired their grievances and shared all the difficulties they currently face, an even greater difficulty lies in trying to get employees to accept change. You will have the final say as the business owner; however, it’s your employees who will be using the software on a daily basis and you need them to buy-in from day one. In this situation, you must work closely with each department or the manager for each department depending on the size of your organization. With the information you gathered have a discussion with the relevant parties where you can outline examples of issues employees are currently dealing with and open the floor to ideas on how to alleviate these problems. By gaining valuable employee input you can establish exactly what is needed from a new enterprise software system, but you will also prepare your employees for this impending eventuality.

Now that you understand the issues the business manages on a daily basis and potential solutions to those problems, it’s now time to involve your employees in the software search. Perhaps you want your accounting and warehouse managers to see a live demo of the software you have been reviewing. Established ERP vendors will be able to tailor their demo to illustrate the solutions to the pain points you identified, providing a strong visual for your department managers who can in-turn filter that information to the rest of the team.

It may seem simple enough, but there is really no true black and white solution to gain employee acceptance when deciding to make a major workplace change. Every business is unique in their processes and culture, and each company will react differently to a transition from legacy software. However, the steps above should provide some valuable ideas on how to approach this transition. Your employees are the ones using the software every day; therefore, it’s important to not make it seem like this is something being forced upon them. Making a change to a more sophisticated software platform will only benefit employees in the long run, it’s up to you to make sure those benefits are clear to everyone beforehand.


By |

Cash and Carry Business Software

Photo courtesy of our friends and customer, A1 Cash and Carry. 

In contrast to traditional retail stores, cash and carry businesses operate as more of a wholesale distribution business, and typically cater strictly to other businesses (B2B customers) as opposed to the end consumer. However, what makes them similar to any retail store, is that customers must pay on the spot for the goods purchased. Typically this is done by cash and not on account (hence the name) and customers are then responsible for transporting the goods themselves. In addition to these types of walk-in customers, many cash and carry businesses still provide traditional wholesale services, in which customers order product to be delivered at a later date and pay once an invoice is received. Most cash and carry businesses operate retail sales from the front of their warehouse.  Product is stored like any other wholesale distribution company, but point of sale (POS) systems and check-out counters are set up near the front and customers are invited to shop the warehouse floor themselves.

In order to successfully manage your cash and carry business, proper inventory and accounting ERP software is a must. ERP software or Enterprise Resource Planning systems, are designed to manage all aspects of a company’s operations.  This includes inventory, accounting, contact management, order entry and processing, warehouse management and everything in between.   As a cash and carry business however, you also want a system that provides full point of sale functionality.

There are lots of benefits to be gained from using proper POS software in a retail setting, especially if that software is fully integrated with a back-end ERP solution.  These benefits include:

Automatic calculation of sales commissions
Inventory detail lookup including multiple warehouse locations, items on order, backorder etc.
The ability to manage multiple ‘in-progress’ transactions on the same terminal
Multiple payment types including ‘on account’
Integration with accounting system, GL, AR, inventory; commissions, booked sales reports, and taxes

POS is a necessary feature for cash and carry operations and is becoming more popular among other non-traditional retail operations.  For example, many distributors also cater to walk-in customers or provide showrooms open to the public.  No matter the situation, the best POS software will also allow users to continue to process sales orders even in the event of a network failure.  Offline POS functionality means that users can continue to process orders, with the system automatically uploading orders into the back-end when a connection is re-established.  The main benefit to offline POS is that it makes it possible to continue operations if the internet goes down – an imperative feature when you have a store full of customers.
Learn more about Point of Sale Functionality
Although POS functionality is one of the most important and obvious features to look for, other functionality may be necessary depending on the nature of the business. For example, most ERP systems will also provide functionality for credit card processing and pre-authorizations, barcode scanning and printing of barcode labels, and warehouse shipping for more efficient pick, pack and ship processes.  If your cash and carry business also deals with perishable items, lot tracking functionality is important in order to track expiry dates and specific lot/batches of product.  Proper lot tracking means that in the event of a recall, only those specific lot/batches of product affected need to be recalled.  This in turn will save your business time and money, and reduce the amount of negative impact on your customers.


By |

Business Process Automation – is it for you?

If you work for a large organization, chances are that you’re quite familiar with the concept of Business Process Automation (“BPA”). However, many smaller businesses may have heard the expression but are either not sure what it exactly encompasses, or think that it’s just for larger enterprises.

So what is BPA? It’s essentially the automation of processes using software (and software integration), eliminating and/or streamlining manual processes, in order to save costs (usually HR costs), speed up processes and eliminate errors. It’s important to note that effective BPA will often eliminate redundant pieces of software as well as reducing the need for human intervention.

BPA examples include:

Document management and workflow – when a completed claim form is uploaded to an insurance company’s portal, BPA software scans the form for a bar-code that identifies the file and claim numbers, and then routes the completed form to the relevant claim adjustor’s inbox, and updates the file’s claim status to “submitted”. This in turn triggers an email to the claimant, and creates a task and due date for the adjustor.
A distributor receives orders from customers via a website and Amazon. These orders arrive electronically and are imported into their ERP Software System. BPA scans the incoming orders based on pre-established criteria, and routes them automatically – if OK to ship, pick tickets automatically spit out in the appropriate zones in the warehouse.

Many small and medium sized business (“SMB”) do in fact use bits and pieces of BPA to automate aspects of the business, but it’s not usually part of an overall business strategy. The benefits of BPA if properly implemented are clear: save time and money, reduce errors, and improve the bottom line. Seems like a no-brainer, right?

But there are three factors that typically constrain the SMB from even starting to look into business process automation as an overall strategy:

Lack of knowledge – many SMB owners are simply not aware of the potential to automate processes. Entrepreneurs typically focus on their product or service, and sales, and in a smaller organization you may not find the level of operational management experience or knowledge of BPA. These companies usually solve  bottlenecks by adding more employees to the mix.
Cost: if you do a search for BPA vendors, you’ll find that most appear to offer costly solutions – in the tens or hundreds of thousands of dollars, and that can deter any SMB form even looking further. However, please rest assured there are some very affordable BPA solutions out there – particularly in comparison with the ongoing cost of hiring additional employees.
Lack of defined processes: probably the biggest practical obstacle is that many (most?) SMBs do not have well defined processes. There are often many exceptions to whatever processes are in place, and they are usually based on the knowledge in someone’s head. This is not necessarily always a bad thing, it’s just a fact of life. But you cannot automate a process that cannot be accurately defined.

In terms of the tools necessary to do the job, you may already own some fairly good ones. Do you have ERP software that offers workflow automation, but you’ve just not taken advantage of it? Do you have different pieces of software that don’t integrate with each other, but could?

In future blog posts over the next few weeks, we’ll explore some strategies for identifying bottlenecks that could be automated, with a couple of real life examples, and we’ll review some 3rd party business process automation software tools. Stay tuned.

By |

Your eCommerce is selling, but can you deliver?

The following is a summary of the presentation made by Darren Myher, VP Operations and Development at Blue Link ERP, during this year’s Dx3 show.  A complete recording can be found via the link at the bottom of this post.

ERP is an acronym for Enterprise Resource Planning, but what does that really mean? Essentially ERP is the software designed to manage your business. ERP is a back-end system comprised of accounting and inventory management functionality, designed to keep track of inventory, manage orders, ship product, process your receivables and payables as well as manage many other aspects of your business. So why is ERP important, and why should you care? As an eCommerce company, why don’t you just set-up a Shopify site and be on your way? ERP matters because once a product is sold on your website, you also have to think about what is going to happen to that order. How is that order going to get to your customer, and what sort of processes will that involve? When it comes to managing an eCommerce site, there are several things to consider.

The first major consideration is around data.  How do you get product information up to your website? How do you get your product catalogue populated in the first place? This is where having a proper system in place with inventory management comes into play.  You want a system that can act as a hub for all your data.  The most ideal situation is one where you can create a SKU once, and have that information populate to your website.

The second consideration is around order flow. When someone places an order online, how will that information get into your system? There are a couple of different methods for achieving this, and the best one for your business will depend on your company size, order volume, available resources and growth projections.

The third consideration is around order completion.  Once an order is picked and packed, how does it get to the customer? Automated processes within ERP systems allow you to integrate with freight carriers in order to get the product shipped and then send tracking information back to your customer online.

Lastly, what happens if a customer wants to change their order? Do you have to log into multiple systems? How do you handle payment processing if the costs change? The more orders you have the more exceptions you will experience, and this is where automation makes a big difference in reducing the amount of errors and time spent managing these exceptions.

Once you consider all the processes around managing an eCommerce site, the big question becomes; how many people do you need to manage these processes? Is that number going to grow as your company grows? How can you manage these costs?

eCommerce Workflow Options

Starting with data, there are several options for when it comes to managing the flow of information associated with selling product online.

Manual Processes

The first method is through manual processes.  This usually entails an email getting sent to your inbox every time an order is placed online, and involves multiple people entering information into multiple systems to process that order. Email messages have to be manually keyed into another system in order to process that order and allocate inventory, or you could be picking orders from the email itself.  Although this model may be fine in the beginning, it is not scalable as your order volume increases and does not give you the visibility into what your inventory levels are at any given time, which can lead to stock issues.

Batch Processes

The second method is designed as a batch process in which you export one or more files, and write an import routine to share information between systems.  In its simplest form, this involves downloading a spreadsheet of orders from your eCommerce site and then importing those into your back-end introductory system.  This is a common example of how companies initially manage orders coming in through Amazon.  The issue with this approach though is that it is only a one way pull of information – how do you send shipping information back to Amazon? You could type this information into a spreadsheet to then batch upload to Amazon, but this is a very manual process that can result in a high number of keying errors.  Although this model is slightly more scalable than manual processes, it is still very person intensive which increases the risk for error and requires a lot of resources to manage.

Web Extensions

The third method involves the use of Web extensions, where web applications are managing your inventory and sales.  However these web tools are not designed to be true ERP systems and do not provide the same amount of integration and automation as ERP.

ERP with Automation

The ideal solution is one that automates the flow of information between multiple systems and processes, for a streamlined approach.  This involves ERP software that automatically pulls orders from your website, processes those orders, sends information to the warehouse and freight carriers for picking, packing and shipping of the product, and then updates the information online for the customer. This option is best for growing companies that want to reduce the amount of human interaction needed to manage their processes.  True ERP solutions allow you to integrate into multiple warehouses for order fulfillment, send shipping information to originating site which completes the order and notifies the customer, and process payments once an order has been complete – all from within the same system. Information flows between your online orders and ERP, and your ERP and warehouse, and then back-up to your website.  It requires a minimum number of person hours which in turn reduces the amount of keying errors and resources needed.

Picture Sources:, Amazon (n.d.). . Retrieved from . Shopify (n.d.). . Retrieved from  Magento (n.d.). . Retrieved from
Implementing proper ERP software as part of your eCommerce business, provides various opportunities for automation.  It is important to note that integration does not mean automation, and certain processes between integrated systems may still involve manual work. Automation plays an important part in the following processes:

Data flows in which “onesie” and “twosie” orders are automatically consolidated into one pick slip for more efficient picking.
Automated processes that look at different warehouses set up within your ERP and then intelligently pick which warehouse to ship from based on the location of the order and/or stock availability.
Mobile picking from an electronic device which improves accuracy by allowing you to scan items as you pick them. Handheld devices automatically notify users if the wrong item has been picked, identifying any issues at the source of error for faster and more accurate picking.
Product layout in which the system automatically generates a pick list based on bin and shelf locations of items to be picked, which reduces time spent walking the warehouse.
Integration with freight carriers so that information from the ERP is sent to the shipping system and labels are automatically generated for shipping. Tracking information is then sent back to the ERP and then to your website for the customer to see.
Payment processing automation that pre-authorizes a payment, which allows you to secure the funds before picking an order, and then automatically processes a charge against that pre-authorization when the order is shipped. This process gives you confidence that the payment will go through when you ship the product.  It also eliminates the need to credit a customer’s account if you’re not able to ship the whole order, instead only charging for what has actually been shipped.
Automated allocation of inventory received into the warehouse to an open sales order based on pre-determined criteria.

If your software is not managing these automated workflows, than it means that you have people manually doing so, and people make mistakes.  The ultimate question becomes, how much do these manual processes cost me right now and how does that compare to purchasing software to automate them? Initially when you have a small number of orders, manual processes might be the best approach, but eventually it will become time to scale this model.  This comparison involves the simple calculation of how much time it takes to perform any one task as part of the order fulfillment process, multiplied by the number of orders.  The result is the number of hours required to keep up with demand, which in turn provides you with an idea of how many people you need to manage these orders.  The knee jerk reaction when order volume increases is to throw more people into the equation, but there are other costs associated with hiring to keep in mind, such as; benefits, training, equipment, skills transferability and turnover.  If you can reduce the headcount required by automating certain processes, that will factor into your decision to upgrade your systems.

So why does automation makes sense?

Fewer errors
Less human interaction
Reduces the rate at which you need to hire new staff
Simplified on-boarding process for new staff (less complexities)
More satisfied customers
Better compliance with partners like Amazon

Every business will have different silos of information – from your website, to ERP, to etailers who sell through brick and mortar stores and so make use of point of sale software.  The idea then is to have this information all live in one central hub – ERP.  One place for information to be managed with full two-way integration between the other systems for streamlined, automated workflows.

Presentation Video

Presentation Slides

By |

It’s Time to Replace QuickBooks. So what’s the Hold Up?

As a business owner or user of introductory software such as QuickBooks, you are fully aware that the time has now come to search for a new software system. The company has been using this software for several years and the limitations that were once unnoticeable are quickly becoming too prominent and cumbersome to manage. The company is growing substantially and new systems and processes are needed to complement and enable continued growth. So why the hesitation? There are a number of reasons why a company is reluctant to replace Quickbooks and move off their introductory software:

It’s been good to you:

QuickBooks is a sensible choice for many start-up companies trying to get a business off the ground. For startup companies looking for basic accounting functionality, QuickBooks has become a logical choice from both a cost and usability standpoint. As you’ve grown the company, QuickBooks has been by your side every step of the way and using its tools has become second nature to you and your team. However, there will come a point in time when the software will not offer the necessary tools for a growing a dynamic business. Although you and your employees have grown accustomed to the software, in order to facilitate further growth and keep up with order volume, you will need a system that can accommodate these plans.

Been burned before

Now let’s assume you and your employees have moved past the nostalgia of your first system and are willing to implement new software. Unfortunately, there’s something else holding you back. There are instances where businesses have had negative experiences in the past implementing software, making them very reluctant to do so again. In this case, owners become comfortable with sticking with the status-quo and maintaining their introductory software. It’s incredibly easy to be discouraged by one of these negative experiences, but you can’t let it deter you from ever considering new software again. Despite any contempt you may hold toward software implementations, learn from these experiences and try not to make history repeat itself. In these types of situations, you want to make sure you find not only the right software, but also the right software vendor who holds an acute interest in helping to grow your business.

Lack of time

This is another difficulty many business owners run into when attempting to replace QuickBooks or other introductory software. Many small business owners are tasked with wearing many different hats in the company. Sometimes they are part of the sales, accounting, and marketing departments and a lot of the time all at once. Now they must add ‘software search committee’ to that list. Unfortunately, searching for a new software system does not take precedent compared to the countless other daily tasks that a business owner must manage. Dedicating an ample amount of time to a software search could sometimes be the hardest – but most vital – part of any search.

There a number of different factors in play when you start to think about upgrading software. You have a system that employees feel favorable towards, you may have had a negative experience in the past, and to top it all off, you have very little time. The easy route would be to renew you license and continue on the same business trajectory you’re currently on. But as a business savvy entrepreneur, you understand that in order to grow the business new software is a must and introductory software just won’t cut it anymore.


By |

Dx3 Canada – Your One Stop Shop for All Things Digital

Dx3 is Canada’s leading technology, digital marketing and retail tradeshow event, dedicated to helping Canadian businesses get digital and remain current on Canada’s cutting edge technology sector.  Already in its 5th year, the two day event held in Toronto is always a hot topic among entrepreneurs, digital marketing professionals and businesses looking for the latest and greatest in technology to grow their business. Dx3 is more than just your typical tradeshow, and aside from the 75+ vendors that will be exhibiting, the show also boasts interactive marketing and technology zones, presentations and keynote speakers, and over 40 sessions that specifically outline ways in which to expand your business and remain competitive. This year’s speakers include representatives from eBay Canada, VICE Canada, comScore, Twitter, Marketing Magazine, Virtual Logistics and Blue Link’s very own Darren Myher.  In addition to presentations, Dx3 is also known for its detailed sessions that leave its audience with action items and real insight into how to execute their learnings.  This year’s topics include:

How To Be Ready For Business In Real Time
Connecting Your Customers To The Internet Of Things
Creating Habit Forming Products
How To Engage The Mobile Consumer (The New Rules For Success)
How The Science Of Storytelling Is Changing
How To Build Partnerships In The Digital Age

If your business lives in the digital world (and most do in some capacity nowadays), than this tradeshow provides the perfect opportunity to stay ahead of the game, learn about emerging trends and develop true partnerships with other businesses.  Whether its eCommerce, omni-channel integration, marketing, retail or customer interaction you’re interested in, Dx3 provides insight from successful businesses about these and other topics.  Not to mention it’s a great excuse to get out of the office for a day!

This year Blue Link is proud to support Dx3 along with several of our integration partners.  Visit us at Booth #316 where we will be speaking to attendees about an often overlooked and certainly less glamorous aspect of eCommerce – back-end inventory and accounting ERP software.  In today’s world, many non-traditional retail operations such as wholesale and distribution businesses, are beginning to sell through multiple sales channels in order to reach more customers.  For example, many distributors also cater to walk-in customers, provide showrooms open to the public and sell through online channels both B2B and B2C.  eCommerce provides the opportunity for any type of business to sell product online, 24/7, 365.  However, eCommerce is just one piece of the puzzle – in order to be successful online, consideration must be made for back-end business management and proper integration.  There is no advantage to selling online if you do not have the processes and systems in place to then process those orders, pick, pack and ship items from your warehouse, invoice your customers and receive new inventory to replenish what has been sold.  For many eCommerce businesses, proper inventory and accounting management can be the difference between your company succeeding and failing.  In such a saturated market, consumers will not easily forgive those eCommerce sites who sell inventory they don’t have, lose orders during shipment and are slow to respond to customer service issues.

Dx3 is a great place to interact with businesses from all parts of the supply chain.  eCommerce agencies and platforms such as Demac Media and Shopify are attending the show to share their insight on how to successfully sell product online and remain competitive.  Virtual Logistics is onsite as an omni-channel data integration service provider to discuss proper integration between multiple systems and channels, including eCommerce and back-end software.  Blue Link is onsite to discuss the importance of having back-end systems in place to manage online sales and to successfully ship product to customers, and Canada Post is onsite in order to answer all your shipping questions.

For more information on Dx3, visit their website or register today! Tickets are only $25 for access to the show floor, or you can grab an All Access Pass for entry to the sessions.


By |

Target Canada: Mistakes Made from a Software Perspective

It was a sad day in Canadian retail history when, just over a year ago, Target Canada filed for bankruptcy protection after months of struggling to gain a foothold in the marketplace.  A highly anticipated launch seemed to face issue after issue from the get-go and consumers continuously felt let down by the retail giant.  No doubt this story will be used as a business case in schools across the country for years to come – a perfect example of what not to do when entering new markets. Canadian Business recently published an article detailing the failed launch after speaking with close to 30 of the company’s former employees from the US and Canada .   They tried to answer the question that is still on many people’s minds; how could one of the best retailers in the US have failed so badly in Canada?   The list of issues that contributed to this disaster are endless, and include everything from bad management decisions, lack of communication and poor market research to internal system and data failure and unrealistic timeframes.  Despite the success of Target in the US – it is among one of the biggest US retail success stories, a $40+ billion company with roots extending as far back as 1902 – its entry into Canada was seen as a bold move, and was certainly not without its fair share of risks.  Any such business trying to enter into the Canadian marketplace would face extreme competition from rival retailers.

The Beginning of the End

To say that Target had unrealistic and highly optimistic growth plans would be an understatement – in 2011 the company had plans to open 124 locations by the end of 2013 with the expectation that the Canadian company would be profitable within its first year of operations. Not to mention that they also had plans to build 3 new distribution centers in less than two years – a feat that typically takes a couple of years per center.   The end result was that Target Canada filed for bankruptcy, wasted billions of dollars, tarnished its reputation and left approximately 17,600 people without jobs.  In most cases, this would have completely destroyed a company’s chances of surviving and Target has been lucky to continue to see success among its US stores.

The reasons behind this devastating failure have been discussed and analyzed endlessly by the media and other businesses, as well as by those employees and people directly affected by it.   Although many can agree that specific decisions and actions collectively attributed to its failure, there is no reason why the launch couldn’t have been successful.  Target had long been hinting that it was considering entering the Canadian market, and this had consumers excited. Not to mention that with Zeller’s’ real estate up for grabs, it seemed like the perfect opportunity to make the move.

By March of 2013 however, it was clear to most employees that the launch into Canada was not going as planned and that continuing to open new locations could prove disastrous.  According to one former employee, “Nobody wanted to be the one person who stopped the Canadian venture.  It wound up just being a constant elephant in the room”.

One of the earliest and most important decisions that Target Canada had to make was concerning technology.  It was necessary to find an ERP system that would allow the company to order product from vendors, process goods through multiple warehouses, and get product delivered to store shelves efficiently.  Target’s US counterpart was already benefitting from such a system, however, that technology was not designed to manage specific Canadian requirements, such as the ability to deal with foreign currency and French-language characters.  With such a tight timeframe, it would have been impossible for Target to customize its existing system to manage these new requirements and so the company opted to find a new, out-of-the-box solution.  This was the first in a series of misguided decisions, and thus began the many software issues that contributed to the company’s decision to abandon the Canadian market.

Software Problems

Finding the right ERP software solution is a difficult and resource-laden task for any company, and with Target’s tight timeframe, successfully implementing a system within 2 years was next to impossible. The decision to upgrade existing systems versus purchasing something new has its fair share of pros and cons to weigh.  For Target, its existing software did not include features specific to the Canadian market, however, it was a familiar system for employees and had proven successful for managing US operations.  Successfully implementing a new system in such a short time frame should have been the first red flag for Target management.  Proper implementations are hard enough without adding an unrealistic timeframe to the equation.  This is also something that should have alarmed the software vendor in question – implementing a system quickly should never be at the expense of doing it properly.  Although the company’s logistical and software problems were exacerbated by a short timeframe, other issues such as bad data, poor inventory management and inadequate training are also to blame.

Bad Data

Months prior to the company launching its first set of stores in March of 2013, there had been major data issues within their system, and it quickly became clear that this was the underlying cause of Target’s logistical issues.   Inventory items had incomplete or missing information, long lead times were stalling deliveries, landed cost factors were not being accounted for and product was not fitting in containers as expected.

In order to decrease implementation timeframes, many companies choose to start fresh on the data front. This was exactly the case with Target; there would be no historical data to migrate over, only new information to input.  However, even though only new information was being inputted into the system, it was still riddled with errors.  Users experienced product dimension errors, the system was calculating costs using the wrong currency, inventory items had vague descriptions and there was a lot of missing data and typos. In addition, no features had been developed to notify users of data entry errors at the source, and so many of these errors were not discovered until much later in the supply chain.   When it comes to software implementations, the data migration aspect typically represents one of the largest sources of system implementation costs and time.  Even for companies that are starting fresh like Target Canada, it is important to receive training on proper data input and to set up specific guidelines for employees to follow.  This ensures that information is entered in the correct format and with enough detail every time, regardless of the employee doing the entering. The data issues experienced by Target were so bad that eventually the company shut down its entire merchandising department for two weeks to fix them.  During that time, every employee was responsible for verifying each piece of data in the system and then fixing any issues.  Although this process did remove most of the bad data, it greatly affected employee morale and was a costly way for Target to realize the importance of maintaining accurate data.

Inadequate Training

To add to the problems of bad data, new employees hired to work at the Canadian Target offices did not receive the same type of training as those in the US.  Once again because of the tight timeframe mandated by Target executives, the company was able to hire people with the right personalities, but did not invest enough time in their training on procedures and software.  This lack of training would come back to haunt the company and directly impacted some of the data and supply chain issues Target experienced.  Right along with data migration, there is a reason that software training is one of the other more costly aspects of software implementations, and that is because it is also one of the most important. It goes without saying that the better trained employees are, the more productive they will be.  All things being equal, when employees feel confident using software they will rely on it more in order to perform their responsibilities. This in turn can help automate previously manual processes, therefore reducing the instance of human error.  If Target Canada employees had been better trained on the system and business processes, many of the data and supply chain issues could have been avoided. Training should first and foremost empower employees to continue to be productive doing their everyday tasks, and then provide additional benefits by way of new features and opportunities. If employees feel confident using the system they will be able to identify other bottlenecks and opportunities – something that would have greatly helped Target.

Poor Inventory Management

For Target, the issue was never on the consumer demand side, but instead on sorting out their supply chain.  Consumers who were shopping at Target would frequently find empty shelves and “out of stock notices”.  This lack of inventory availability had consumers flocking to social media sites to post comments and complaints, another factor that hurt the company’s Canadian launch and brand reputation.  It got so bad that at one point in time almost every single item on the front page of a printed weekly flyer was out of stock. Even after the big two-week data blitz, the company was still struggling with data quality problems that were negatively affecting the supply chain.  Because the company didn’t have time to address these issues before the next set of new stores opened, the problems multiplied, causing even more damage. From the distribution side of the business, it appeared that there were no supply issues at all, as vendors were overwhelming shipping yards and warehouses with product.  So much so that eventually Target was forced to rent more warehouse space.  In some instances supply became so overwhelming that distribution centers were overflowing with product and delivery trucks were stuck waiting to unload in parking lots.  Even when inventory was being unloaded, the process of shipping items to stores was rushed and disorganised, which led some stores to receive too much inventory and others not enough.  It can be easy to neglect the inventory management process when sales and demand are high, however, as Target discovered, without proper inventory management those high sales numbers will quickly fall.  When evaluating software systems, and during implementation, it is important to thoroughly assess the inventory management process in order to avoid such issues.  Proper software will allow users to set up minimum re-order levels, taking into account lead times, so that employees are notified when new product needs to be shipped, track backorders in order to easily allocate new shipments, manage multiple units of measure for easy picking, packing and shipping, calculate landed cost factors in order to quickly process and receive shipments and track inventory across multiple warehouses.

Other Issues

As if Target did not have enough problems to deal with, other issues kept arising throughout the company’s distribution centers and retail stores. There were problems with the company’s back-end ERP solution communicating properly with the company’s warehouse system, and the point of sale software used in-store at each retail location was not working properly.  According to one employee, the Canadian division did not do their due diligence when selecting its point of sale software, and they further explained that, “In the US, this never would have made it off the launching pad.  There would have been a robust process for testing”. Having a tight timeframe meant that the solution was not adequately tested for its fit, and as such employees were stuck dealing with long boot up times, incorrect change, and the system constantly freezing.

Improper training and bad data also skewed the information that management was seeing and made the situation at each retail location seem better than it actually was.  Only after the company had been experiencing continued supply chain issues for several months did a group of employees discover that some of the new hires were purposely turning off a key feature in the system – the ability to notify distribution centres that more product needed to be

By |