HVP Magazine – Using Enterprise Resource Planning to Avoid Supply Chain Problems

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Kevin Crowe, Senior Software Consultant at OGL Computer, discusses how Enterprise Resource Planning (ERP) can help plumbing and heating companies.

The pandemic had already created numerous supply chain and logistics problems for businesses across industries over the past 18 months, but with Brexit also happening, it created the perfect storm. A situation that savvy companies in heating, ventilation and plumbing have been able to overcome, often emerging stronger, thanks to computer and technological systems, in particular those centered on ERP (Enterprise Resource Planning).

ERP systems support the integration of previously disparate business functions, which help companies adapt to new ways of working, such as online rather than through window sales. Indeed, many HVAC companies have had to move their sales and trading online to stay in business during the pandemic.

The COVID-19 pandemic has caused a major disruption in supply chains and logistics, especially with price volatility and order turnaround times, due to microchip shortages, which are impacting many HVAC products, especially air conditioning systems, those with variable speed motors and compressors. Manufacturers have been subjected to shipments of microchips that are insufficient or do not appear. This has created huge unmet demand issues and is expected to continue until 2022.

ERP is a technological solution that ensures that businesses have good visibility across the enterprise during supply chain disruption as it combines all systems into one. By integrating information related to purchasing, inventory, finance, sales and marketing, ERP offers the possibility of increasing efficiency, responsiveness and productivity. This helps businesses provide a better customer experience and fulfill as many orders as possible.

Supply chain problems are exacerbated as companies are unable to accurately forecast sales and inventory levels. To remedy this situation, transparency and visibility into a company’s supply chain and understanding the gaps is essential, and this is where ERP systems come into their own.

ERP has enabled the HVAC industry to enter direct prices from suppliers, for example, on online inventory, minimizing the risk of margin erosion and keeping customers up to date with pricing information, while avoiding wasting time in continually contacting suppliers. for real-time pricing.

But not all HVAC companies are reaping the benefits of ERP yet.

Our survey found that 81% of those surveyed in the heating, ventilation and plumbing industry agreed that a central ERP system would give them much better visibility and inventory control. However, 34% of those polled also confirmed that they were concerned about handling the disruption such a migration to ERP would cause. This perceived barrier to implementation is simple to mitigate with just a few key considerations.

First, review your existing business processes to see how they can be redesigned to increase efficiency, then choose the right ERP solution to meet current and future business strategies. For example, if you are an HVAC business planning to sell online, the technology you need should enable simple and smooth integrated e-commerce functionality to maximize sales.

Regularly reviewing and cleaning all company data – customer, supplier, and product – will help increase the chances of a smooth migration when you move to ERP. So, take the time to do this and also schedule training for the leaders of the different departments who will use the ERP system the most so that they can use it without fear or misuse. Once these “super users” are comfortable with their training, they can even help train other staff.

Perhaps the most important consideration, above the selection of the ERP system itself, is to make sure that you choose a software vendor that provides support and will help your business achieve maximum return on investment.

ERP Benefits – Danfast Case Study

The effects of the pandemic and Brexit led to increased interest in ERP solutions and their adoption as smaller teams were able to process the same amount of work during the leave period with cloud software.

Being web-based and hosted in the cloud, ERP solutions are easily accessed remotely, rather than needing dedicated servers, so anyone working from home can work as they would in the office or on the go. But, again, it is advisable to use the services of a reputable IT partner to ensure proper ERP software integration and a robust level of cloud security.

The implementation of ERP can create new and better ways of working and can improve the customer experience. In fact, it can represent nothing less than the digital transformation of a business. This is the case with Danfast, a Hull-based plumbing, heating, electrical and general consumables supplier, which used ERP to deploy a large-scale data recovery strategy when its offices were flooded. .

The company lost all of its IT infrastructure but, thanks to ERP, was able to recover all aspects of its data and operational processes, from sales, purchasing, inventory management, marketing to CRM and accounting, with no negative impact on the business.

With ERP software, all Danfast systems and data were replicated every night in OGL’s maximum security offsite cloud data center. This allowed the company to be able to resume deliveries to customers a few days after the flooding.

The ERP solution also provided Danfast with remote access to its data within 24 hours, which was very important to ensure that the business did not have to shut down completely.

With the benefits inherent in digitalization in general and ERP systems in particular, now is the time to look ahead and ensure that your business is fit to be a profitable business in 2022 and beyond. No matter what happens in the HVAC industry or if there are other global disruptions, ERP can help HVAC businesses of all sizes weather most storms.

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