Kevin Crowe, Senior Software Consultant at OGL Computer, explains how Enterprise Resource Planning (ERP) can assist plumbing and heating businesses.
The pandemic had already created numerous supply chain and logistics problems for businesses across all industries over the past 18 months, but with Brexit happening too it has created the perfect storm. One that savvy heating, ventilating and plumbing businesses have been able to weather, often emerging stronger, thanks to IT and technology systems, especially those centred around ERP (Enterprise Resource Planning).
ERP systems support the integration of previously disparate business functions, which help businesses to adapt to new ways of working – like online rather than via trade counters. Indeed, there were many HVAC companies that had to shift their sales and trade online to remain in business during the pandemic.
The COVID-19 pandemic has caused major disruption to supply chains and logistics, especially with price volatility and order fulfilment timings, due to microchip shortages, which impact many HVAC products, especially air conditioning systems, those with variable-speed motors and compressors. Manufacturers have been subjected to microchip deliveries which are coming up short or failing to appear. This has created huge problems with unfulfilled demand and is likely to continue well into 2022.
ERP is a technology solution that is working to ensure that firms have good visibility across the whole business during the supply chain disruption, as it combines all systems into one. By integrating purchasing, inventory, finance, sales, and marketing information, ERP provides the opportunity for increased efficiency, responsiveness, and productivity. This in turn helps businesses provide a better customer experience and fulfil as many orders as possible.
Supply chain problems are exacerbated as businesses are unable to accurately forecast sales and stock levels. To remedy this situation, transparency and visibility of a business’s supply chain and understanding any gaps are key, and this is where ERP systems come into their own.
ERP has allowed the HVAC industry to input direct pricing from suppliers, for example, onto online stocks, minimising the chance of eroded margins and keeping customers up to date with price information, while at the same time avoiding the need to waste time continuously contacting suppliers for real-time pricing.
But not all HVAC businesses are switched on to the advantages of ERP yet.
Our survey found that 81% of respondents across the heating, ventilating and plumbing sector agree that a central ERP system would give them far greater visibility and control of stock. However, 34% of those respondents also confirmed that they worried about managing the disruption that any such move to ERP would cause. This perceived barrier to implementation is simple to mitigate with only a few key considerations.
First off, review your business’ existing processes to see how they can be redesigned to increase effectiveness and then choose the right ERP solution to meet present and future business strategies. For example, if you are a HVAC company that is considering selling online, the technology you need must allow for easy and smooth integrated eCommerce functionality to maximise sales.
Reviewing and cleaning all company data regularly – customer, supplier, and product – will help increase the chances of a smooth migration when you do switch to ERP. So, make time to do that and also schedule in training for leaders in different departments who will be using the ERP system most so they can use it without any fears or misuse. Once those 'super users' are comfortable with their training, they can even assist with training other staff.
Perhaps the most important consideration, above selecting the ERP system itself, is to ensure that you choose a software provider that provides support and will help your business achieve a maximum return on its investment.
ERP benefits – Danfast case study
The effects of the pandemic and Brexit have led to an increased interest in and uptake of ERP solutions, as smaller teams were able to process the same amount of work during the furlough period with cloud software.
Being web-based and hosted on the cloud, ERP solutions can be easily accessed remotely, rather than needing dedicated servers, so anyone working from home can work as they would do from the office, or on the road. But, again, using the services of a reputable IT partner is advisable to ensure proper integration of the ERP software and a robust level of cloud security.
Implementing ERP can create new and better ways of working and can improve customers’ experiences. In fact, doing so can amount to nothing less than the digital transformation of a business. This was the case for Danfast, a Hull-based supplier of plumbing, heating, electrical and general consumables, which used ERP to deploy a full-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 operational data and processes, from sales, purchasing, stock management, marketing through to CRM and accounts, with no adverse impact on the business.
With ERP software, all of Danfast’s systems and data were replicated every night to OGL’s maximum security off-site cloud data centre. This allowed the company to get back into a position to restart deliveries to customers within a few days of the flood happening.
The ERP solution also provided Danfast with remote access to its data within 24 hours, which was very important to ensuring that business did not have to grind to a complete halt.
With the inherent benefits of digitisation in general and ERP systems in particular, now is the time to look ahead and ensure that your company is fit to be a profitable business in 2022 and beyond. Whatever happens in the HVAC industry or if there are any further global disruptions, ERP can support HVAC businesses of all sizes to weather most storms.
Sourced from HVP