When choosing an inventory system or ERP system, the first three things you need to do are to
- document all of your requirements,
- make sure that you have documented all of your requirements and
- make absolutely sure that you have documented all of your requirements.
The documented requirements form a check list for use when evaluating systems. Without that check list, you will probably end up with a system which doesn’t satisfy all of your requirements. System selection needs to be approached with the attitude of “Do it once and do it right”. Getting it wrong can be costly.
When documenting your requirements, express them as functional requirements rather than describing what you want each screen or report to contain. One way to approach this is to think about what you want to do with the information concerned. What you want to achieve as a result is a functional requirement. Some systems are likely to facilitate the achievement of your objectives in better ways than you had thought of. It is the achievement of your objectives that is important, not how those objectives are achieved. Having a system developed from scratch or by modifying an existing system should be regarded as last resorts, partly because those approaches are highly susceptible to cost over-runs.
Once you have documented your requirements as described above, check with other stakeholders in your company to see if anything has been left out.
Then look for systems which are likely to satisfy your requirements, have good support and for which the cost is acceptable. System selection needs to be approached with an open mind. Some people have a preference for COTS (commercial off the shelf) systems. Others have a preference for open source systems. SaaS (software as a service) is increasing in popularity. Such preferences should take second place to ensuring that the system which you get satisfies all of your requirements. Do not be swayed by nice features. They do not make up for inadequacies in relation to satisfying your requirements.
If a system, in its raw state, does not satisfy one of your requirements, find out if there is a suitable plugin for dealing with that requirement. There is almost certainly a report generator available for each system. Using it can help to satisfy your requirements. However, most report generators are not well suited to applying mathematical algorithms. In such circumstances, appropriate data can be downloaded (e.g. with the aid of the report generator) and analysed outside the system. By using appropriate selection criteria, it is likely that the downloads can be made small enough to be analysed using spreadsheets with appropriate formulae entered into them. In some cases, it might be more appropriate for programs to be written to analyse the downloaded data.
It is highly unlikely that the forecasting algorithm used in the system which you obtain is the one which is best suited to your requirements. Poor forecasting of customer demands will result in poor inventory management. Replacement of the forecasting algorithm needs to be discussed with the vendor. Replacement could be a problem with COTS and SaaS systems in particular. If a suitable plugin can be written then that might solve the problem. Otherwise, it might be necessary for the forecasting to be done outside the system using extracted data. You are welcome to contact me to discuss the suitability, for your purposes, of the forecasting algorithm in any system you are considering obtaining.