Dear Uncle, congratulations on the success of your business.
I amwriting this letter to inform you of the shortcomings I noticed in thebusiness. I heard from aunt that she manages all the book-keeping, payroll,taxes, etc. manually.
Hence, I propose to implement an ERP solution to managethe business as it grows in the future.Manualorders lead to product, quantity, and price mismatches due to typos andspelling errors. When ERP is implemented as a book-keeping method human errorand the time taken to perform complex manual price calculations are eliminated,including varying predefined discounts (can be input using this system), real-timedata manipulation and customer data history 1. The data entered bythe planner can be read by the production engineer who can start the productionwithout waiting for the planners consent and hence the manufacturing lead timeis reduced. ERP helps with inventory control 2 by planningreplenishment orders, surplus inventory management, inventory turnovertracking, demand forecasting, production planning in turn reducing wait times,cycle times, lead times, product delivery times, unscheduled and plannedmaintenance times, and increases revenue 3. The sales order numbergenerated through ERP tracks reverse supply chains, helps in returns andmanaging expired material inventory 4.
The ERP system has nobarriers against global exchange rates hence the present manual purchase orderand sales order creation can be eliminated. Accounting through ERP saves a lotof time in decision-making like make or buy raw materials, transactionsconsidering the customer credibility, quicker approvals of trade online, trackreturn on investment and managing the budget through profit analysis. 5ERP systems areavailable as on-premise and cloud-based. An on-premise system software is veryexpensive and not economical for a small business but cloud-based ERP systems 14 have becomepopular in recent years, especially in small to mid-sized companies because itis cheap. Cloud-based ERP is priced under a monthly subscription of around $150per user (17)and it varies provider to provider.
Since our company has five operationaldepartments, the total expense would be around $750 per month. Bell andCompany, an Industrial and Marine Supply Company, shifted to ACUMATICA, an ERPsoftware, because it has tighter integration between sales and purchase orders,unlimited user pricing, automated communications with the customers therebyimproving customer service, reduced accounting costs by bringing AP in-houseand has mobile access to increase employee productivity and moreover it is veryeasy to use and highly configurable. ACUMATICA improved access to resourcessuch as customer information, technical documents etc. So, I wouldrecommend implementing ACUMATICA to improve the overall management of thebusiness. Our goal should be to expand our business to global markets and thenwe may implement the on-premise ERP system with many users.