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In our prior post we began listing some of the red flags, incidents culled from real-life incidents as noted in a white paper from Tribridge, which hurt businesses in multiple ways.  As it turns out, there are a lot of them, so we’re adding a few more here to round out a two-part post.  The original document can be found here.

Continuing our list of issues we often see clients wrestle with – and waste TONS of time and money on – here are a few more that can be remedied by taking the plunge and finally updating that old, tired accounting system to one of today’s new offerings.

  1. Errors tracking time and equipment. Paper based tracking systems invariably lead to mistakes, but when those mistakes show up in somebody’s paycheck as the result of mistaken record keeping, things can get a bit testy.  Multiple teams performing manual time entry on paper sheets is one such recipe.  Not to mention a lack of insight into T&M performance (since it’s all written down instead of inside the computer).  Today’s modern systems provide web-based data collection opportunities for remote employees.  These can feed payroll – or a payroll service – and later provide all the reporting a company needs to track and manage its service performance.
  2. Document delays that slow month-end close. We see it all the time: companies that can’t close their books within a couple days of month-end.   (Some can’t do it within a couple months!)  While there are a host of causes, most have to do with manual processing of various sorts, often coupled with high transaction volumes and multiple silos of unconnected information. An ERP system is built to manage and consolidate exactly this type of month-end chaos.
  3. Service and warranty confusion. Service management software, often built piecemeal a decade or two ago and with few links to accounting, can cause delays to service work, lack of up to date inventory information and poor warranty tracking that makes tech’s lives difficult.  A fully integrated modern system utilizing tablets in the field can record service work, material consumption and keep warranty information up to date.  Orders can be placed and managed, and inventory and assets can be tracked accurately and almost instantly.
  4. Inaccurate inventory levels. Whether you’re in retail, wholesale or manufacturing, inventory counts.  Errors in counts, lack of consistent cycle counting, month-end closing complications, difficulty with counting bulk-weight items (like nuts and bolts), and no inventory into warehouse moves or inter-store transactions are but a few of the ways that inventory can become inaccurate, or worse.
  5. Unsupported inventory practices. A lot of older systems do not support all the recognized inventory accounting and costing practices (like LIFO, FIFO or Standard) or, if they do, they are often awkwardly implemented and difficult to use.  This can lead to using spreadsheets to manage inventory.  But manufacturers need to be flexible enough to manage processes unique to their particular build-to-order or build-to-stock or engineer-to-order requirements.   Today’s newer systems allow for better synchronization of build-to-order and –stock situations, and allow for a choice of costing systems (typically Standard, Average, LIFO and FIFO) which, with careful management and implementation, can better match up with manufacturers’ exact requirements.

Time and space prohibit us from sharing even more red flags.  Suffice it to say that if even a few of these issues are yours or sound familiar, it may be time for you to start your search.  The answers lie in today’s advanced, sophisticated, and yet very cost effective new ERP systems.

 

 

A recent white paper from a company called Tribridge highlighted 15 ways culled from real companies in in which those companies’ accounting system was hurting their business.  As we reprise a few of them here, it’s amazing to see how many similar situations we’ve run across with our own clients over the years.  How many look familiar to you?

  1. Unstable system, slow performance. This is the most common one.  Reports run slowly, the system locks up regularly and error messages are common.  Modern systems today are built on solid transactional databases, mostly SQL in the PC world, complete with transaction rollback capabilities to minimize corruption.  Newer systems – once properly installed and finely tuned – will run everything faster, from daily transactions to month-end reports.  (While the Tribridge report skews toward Microsoft Dynamics as a solution, it’s not the only good one out there.)
  2. A growing paper problem. Manually entering invoice data into the system.  Tracking down and matching up invoices.  Searching for old orders or payment history.  And so on.  With an automated Accounts Payable system, you eliminate much of the office paper flow.  As well, invoices can be coded intelligently or by approvers during a rules-based approval process.
  3. Production schedule delays. Delays, inaccuracies and frequent rush orders (with extra freight charges to expedite) are tell-tale signs of the problem.  Modern systems allow for full integration of EDI integrating them directly into production scheduling, thus eliminating many of the human errors that plague so many distribution and manufacturing companies.  Yes, it takes time and effort and patience to set it all up, but once you do, it just runs.
  4. Inaccurate cost calculations. Whether it’s losing a contract due to inaccurate pricing, or building in a cushion, or high raw material costs due to poor inventory tracking or simply the unending burden of manual, time consuming reporting – these are all common results of inaccurate costing.  Costing is tough, to be sure.  They comprise many of our own most complex implementation issues for clients.  But they must be tackled, in modern systems they can be, in order to ensure peak performance, accuracy and ultimately profitability.
  5. Time wasted having employees create reports manually. Employees often find themselves compiling report data from three, four, even five separate sources.  They often have to wait for others to compile their contribution.  And then there’s the number/data double-checking, the occasional Excel formula error (or change).  All lead to laborious, redundant and often inaccurate reporting.  Financial reporting need not be that difficult – once you have your system implemented properly, well-tuned and honed by trained users.
  6. Selling out-of-stock products. When accounting is disconnected from inventory, the warehouse or the e-commerce platform you might sell by, you may end up managing stock keeping units in more than one system.  In-stock quantity errors are not uncommon.  Mistakes happen.  You can end up buying out-of-stock items on rush orders for the wrong price.  You lose visibility.  When everything is disconnected, you lose money.

We’re not half-way through Tribridge’s list (white paper here), so we’ll look at a few more and wrap up in the following post.  Stay tuned.

 

… of jobs being lost to the new wave of automation, robots and artificial intelligence, total aggregate employment in our nation continues to increase relentlessly, even with bumps along the way.  In other words, robots are not going to steal all our jobs.

With Elon Musk recently warning that robots will “do everything better than us,” and a 2013 paper from the Oxford Martin School claiming that 47% of all jobs are at high risk of falling to computerization in the coming decades, the fact is that jobs are constantly changing, shifting and evolving.  It’s nothing new, and it’s nothing that we – especially those involved in U.S. manufacturing – need panic over.

A recent analysis by the Information Technology & Innovation Foundation quantified the rate of job destruction and creation for every decade going back to 1850, based on census data.  Among other things the report showed that 57% of jobs that workers did as recently as 1960 no longer exist today (adjusted for workforce size).  The largest losses were suffered among office clerks, secretaries and telephone operators.  That’s a lot of Mad Men era folks out of work, right?   And let’s not forget elevator operations, bowling pin setters and gas station attendants.

The point is, we have a long tradition of losing jobs due to automation, but invariably we see new jobs take their places.  More often than not today, robots, artificial intelligence (AI) and the like are often automating discrete tasks more than they are jobs.  By 2055, McKinsey predicts, more than 50% of all work-related tasks will be subject to automation.

So why, with this long history of job attrition, do some continue to insist that the sky is falling, or that this time is different… that we are headed to some jobless future of mass unemployment?

The gist of the doomsayers’ argument voiced by many futurists and experts, according to a recent article in the Wall Street Journal (7-22-17) seems to be that the new wave of AI computers and robots can “do virtually any job that humans can do, so everyone’s job is on the chopping block.”  AI is getting so intelligent, the logic goes, that it’s smart enough to recognize cats, drive cars, identify cancers and translate across languages, notes the Journal.  So won’t it soon be capable of doing anything a person can?

Not so fast.  What these tasks have in common mostly is finding patterns within large data sets.  It would be a mistake to extrapolate from this big data analysis some giant leap in duplicating human intelligence.  Today’s AI is often just straining through massive bits of data, whether it’s recognizing a face or putting bunny ears on your selfie.  They are no more a threat to “human primacy” says the Journal, than “automatic looms, phonographs and calculators, all of which were greeted by astonishment and trepidation by the workers they replaced when first introduced.”

Moreover, as wealth continues to increase (as it historically always has) those consumers are likely to allot a growing share of their income to personal services, the very sector where face-to-face interactions are critical to the value delivered.  Says the article’s author, Stanford AI Professor Jerry Kaplan, “the irony of the coming wave of artificial intelligence may be that it heralds a whole new era of personal service.”

And that means: plenty of jobs.  After all, once over 90% of us were farmers; today it’s 3%.  And unemployment is near an all-time low, while employment is at an all-time high.  Meanwhile, standards of living around the world continue to improve as we shuffle jobs from one category to another in the familiar cycle of creation and destruction.

Quantum computing encryption is secure, fast, hack-proof so far, and getting big in China.

We’ve written here before about quantum computing, the latest leap in computer technology.  Those of us involved in the industry since the dawn of the PC can only marvel as the technology keeps marching forward, beyond even the tacit bounds of Moore’s Law, and into the realm of quantum physics.

That branch of physics, often typified by the Heisenberg Principle which states, in simple terms, that at the very sub-microscopic, atomic-small level of physics, one can know a particle’s position or direction of travel, but never both simultaneously.  In quantum computing terms, this means that, unlike a normal ‘binary’ computer transaction in which a switch is either ‘on’ or ‘off,’ that instead, a particle (or a bit) can be both on and off simultaneously.  That new realm of multi-state properties defies our logical, if somewhat limited, knowledge of the larger world, but it opens up a lot of new possibilities.  And quantum computing is already beyond the theoretical stage; it’s already operational.

A physics professor at the University of Geneva, Gregoire Ribordy, has developed something called quantum key distribution, using the unique properties of quantum computing technology to create a data encryption system so secure that he says it can’t even be deciphered by an advanced quantum computer (and as reported recently in a Focus/Security special section at Bloomberg BusinessWeek).

Ribordy, formerly a researcher at Nikon in Tokyo, believes “our challenge is to help governments be ready.”  His company ID Quantique SA is based in Switzerland, and recently signed a joint venture agreement with a Chinese company.  As a result, sales of his quantum key equipment – whose quantum servers sell for about $100,000 a pair – are said to have surged at Chinese banks, government agencies, and even the China Railway Corp.

Ribordy reports he’s sold fewer than 100 servers in the U.S., but predicts the growing interest in China will spur interest elsewhere, and notes, “If China’s doing it, maybe it’s a good idea to look at why.”  Recently the Chinese claim to have launched a quantum-enabled satellite to securely transmit data.  Ribordy’s Chinese partner has built the world’s first commercial network secured by Quantum technology between two major cities, according to Bloomberg.

Quantum key does have one drawback, it is reported, in that there is a limit to how far about the machines can be from one another.  According to BusinessWeek, “quantum computers communicate by firing photons over fiber-optic lines, which become unreliable at distances beyond a few hundred miles.”

Still, the transition is beginning, and the U.K.’s National Cyber Security Centre predicts the cost will drop rapidly which, along with the highly secure nature of quantum encryption is bound to increase its popularity everywhere.  Recently, China has begun to pull ahead of the U.S. in some key quantum areas according to industry insiders, while the level of investment there continues to grow.

And of course, just to square the circle in a world in which hackers are always looking to leapfrog the security teams, Richard Murray of Innovate U.K., a government agency that helps foster new technologies recently noted, “The reason there is a market for this now is to prepare for the threat of a quantum hack in the future.”

And the beat goes on.

We don’t generally use our blog to “promote” the products we sell, but we thought it worth reprising a few highlights from the new release of TIW’s ALERE accounting and manufacturing software system.  We’ve be a TIW reseller for over 20 years, and they recently announced version 12 of their software – a full-fledged manufacturing accounting system for the small to medium size business.

ALERE functionality covers a broad range, including Accounting, Manufacturing, Mobility and automated Data Acquisition.  We’ve long considered it to be one of the premier manufacturing packages available in the market today for the small to midsize business (say a few million up to $100 million plus in revenues), with a robust suite of manufacturing and accounting modules.

For our many current users of ALERE, as a customer courtesy we provide the most recent updates as recently announced by TIW itself, below:

The release of ALERE Business Applications v12 will bring both new features and enhancements to existing modules into the fold. A few of the more notable additions…

Credit Card Processing: A credit card processing gateway will be built in. ALERE will utilize the Authorize.net gateway by default for transactions which still allows the use of your choice of merchant account. Processing will be handled through AR/Cash receipts as if it were another transaction.

64bit Office Support: A mechanism has been added to ALERE which allows it to export information in a manner which may be read by 64 bit versions of Excel. Additionally, an option has been added to control the launch of Excel.

InTouch Module (ALERE’S integrated contact manager): A number of enhancements and interface changes have been made to InTouch. The interface will be getting a more streamlined look, condensing down email chains to a blog style interface. The controls which handle the interface with Outlook have also been rewritten in order increase speed. Finally, InTouch will enable markup allowing graphics and general dress-up of content to be passed through to emails.

Commission Module. The Commission module is undergoing an overhaul to add a significant number of options which add further flexibility to the manner by which commissions are calculated and distributed. Notably, the upgrade will allow for both the combination of rules and split commissions.

TIW has announced that they will be releasing more information as the shipment date approaches.

 

 

There’s big business in finding and exploiting the software flaws we seem to hear about nearly every day now.

Google pays bounties of $200,000 to hackers who find holes in its software, and payouts of $20,000 or more are said to be common.  Companies like Google, Microsoft and others would rather pay this one-time bounty to the best of the hackers then risk the damages implicit in an exploit from ‘the bad guys.’

Last fall, a company called Zerodium boosted the rate they’ll pay for exploits that hack the iPhone from half a million to 1.5 million dollars.  According to The Economist (5-20-17), mundane exploits for web browsers that a few years ago earned $5,000 now sell for many tens of thousands.

Oftentimes, today’s brokers will buy hacks themselves from freelance hackers who make it a profitable hobby.  They then sell these to someone who can use them.  Government agencies in the U.S. and Europe are eager customers.

On the other hand, messages on WikiLeaks show that at least one broker called ‘The Hacking Team’ sold exploits to Egypt, Russia, Sudan and UAE among others.  It’s a complicated market.

As one can imagine, there’s a big demand in the shadow markets, where many customers are simply criminals.  The most recent famous ransomware hack, called WannaCry, is said to have been exchanged in this way.  Often, “someone will sell you an exploit,” notes The Economist, “so someone else will sell you a warning.”

A firm in Phoenix, AZ called CYR3CON produces reports of possible threats based on its online scraping of posts and blogs in 15 languages from hackers involved in the field.

In fact, just ahead of the WannaCry attack which froze data on Windows PCs around the world, CYR3CON’s software “picked up chatter about exploits designed for just that task.”  It later noted that over 60,000 computers had had the exploit installed but not yet activated.  Many were medical facilities that had previously paid up “without unnecessary conversations.”  Those subscribing to CYR3CON’s services could take precautions.  Others, Economist’s editors point out, “were not so lucky.”

People increasingly seem to have a fundamental disregard for security, nots independent security expert Bruce Schneier, despite the fact that worms and other malware infections caused billions of dollars of damage in the previous decade.  The defenses keep getting better but, it seems, so do the hacks.

 

In our prior post we suggested how additive manufacturing, also known as 3D printing, will be a major consideration in the customized world of the factory of the future.  We’ll wrap up the line of thought today with a few observations on why, and the economic impact, with some help from editors at The Economist (7-1-17).

Manufacturers often start production either by building small runs of prototypes, or sometimes by making small numbers of high-value items for special applications or markets, before tooling up to larger production runs on more mass-market items.

One British company called Domin Fluid Power is using 3D printing to change the equation.  When this design service company decided to start making its own products, they picked high-performance hydraulic pumps and servo-valves, devices that control fluids in a variety of applications from aviation and aerospace to factory plant floors.  The question they faced was which market to go after.  The answers are revealing.

While aerospace offers good profits from high margins, it’s a low-volume business, fraught with time delays, layers of prototyping and costly risks.  The industrial and general equipment markets are generally broader and arguably easier to enter, and they can help companies get up to volume production quickly; however, they’re price sensitive, with inherently lower profits and margins.

Domin had acquired a 3D metal printer from a German firm, and realized that economies of scale were different with 3D.  Changing designs meant only software modifications, not wholesale shop floor retooling.  Operationally then, unit costs were roughly the same whether they made five of an item, or 500 or 5,000.

And importantly, manufacturing with 3D requires less material.  Unlike traditional methods that require removing excess materials, as well as burnishing, abrading, cutting and drilling… 3D products can emerge fully formed with little or no waste.  Over time – and production volumes – that adds up to significant savings, and a reduced cost of goods.

An analysis done by Domin revealed that, as always, reduced product weights held value to varying degrees across applications.  For instance, saving a couple pounds of weight when building a Formula One racecar might be worth over $100,000 relative to the value of a win in a world of tight tolerances.  (“A kilo saved is a trophy won.”)  In spacecraft, they calculated the value at about $25,000, in aircraft, from $1,200 to $13,000, in automotive from $20 to $600, and finally, in factory equipment, from zero to perhaps $6 per two pounds of weigh saved.

All this makes for lighter, less expensive (i.e., less material) and often more valuable end products.  And with 3D printing, the costs per unit were essentially the same across any size product run.  In Domin’s case, the analysis led them to decide to enter the low-end of the market first with a competitively priced servo-valve.  But since essentially the same valve could be used in mobile hydraulics in tractors and trucks, they can move up the profit scale at little added cost.  And in fact, they’ve found aerospace applications for which they hope to qualify, and with some modification, they say they can crack the racecar market too, thus opening the way to automotive.

3D printing opened all these markets to them, and is making them competitive on the low-end and capable at the high end, all while managing production at lower costs very effectively.

The benefits of 3D will spread throughout industry, as Domin illustrates.  And weight reduction and cost reduction will always have the manufacturing marketplace advantage.