In this whiteboard session, Jay Deakins, Founder and CEO of Deacom, discusses the approach that DEACOM ERP software takes to address the specific needs of batch and process-based manufacturing companies. The video begins by discussing the differences between what discrete manufacturers typically need in an ERP system vs. the more complex requirements of batch and process manufacturers.
Within a centralized ERP system, Deacom is able to provide all of the necessary functionality that batch and process manufacturers require such as formulation, quality control, warehouse management, document generation, and even mobile access. Because data resides in the core system, it is inherently much easier for Deacom to provide this functionality and enable our customers to grow faster… And that is why Deacom exists.
The full video transcription follows…
So we’re here today to talk about why Deacom exists as a company. Deacom provides software for batch and process based manufacturing companies, and there’s a big difference between what batch and process based manufacturers need and what discrete manufacturers need.
So in the discrete world you can take a basic system… you have AR, AP, GL, and Basic Inventory. For a typical discrete manufacturer that does like furniture or fairly simple products this type of basic functionality will work for most people.
So what happens is, a lot of really large companies make systems that they want to be able to sell to everybody. So they make a basic system and then they allow 3rd party companies to bolt onto that functionality for that specific vertical market, in this case batch and process is the vertical market, and they’ll add some functionality to that, including formulation, QC, and document generation.
We refer tot his model as EE. That means this is how everyone else handles this problem.
The reason Deacom exists is that we’re a little bit different.
So with the Deacom model we handle all of this functionality in one system. We handle the AR, the AP, the GL, basic Inventory, Formulation, QC, Document Generation, in one system. So basically Deacom is fighting and inherently simpler battle, because of the fact that we don’t have to bolt together functionality and we’re specific to the batch and process industry, our task is easier to get our customer their required functionality.
So this actually starts to get a little more complicated, because you say, ok I have this basic functionality, now I actually need a WMS system because I want to take something… A WMS system is a warehouse management system which is designed to manage the flow of inventory through your warehouse and through your production process.
So the problem with this system is that when you’re bolting on this 3rd system, some of the information the WMS system takes is from the basic system, some of the information is from this 3rd party bolt on. So now I’m trying to bolt together three systems to provide the functionality that’s needed.
You might’ve guessed from the Deacom model, we have our own WMS system.
Again, this is an inherently simpler battle because of the fact that the WMS system is living with the other functionality it’s inherently simpler.
Now in the last 5-10 years this model here on the left has gotten a little more complicated in that all of a sudden cell phones, iPhones, android phones, iPads became popular… People said, that’s great I want to be able to access this data when I’m not in the office or just from my mobile device, so there’s a whole other piece that gets bolted on here.
Again, go back to the Deacom model, we have our own mobile functionality because it just exists with all the other functionality.
Interestingly enough in the Deacom model you actually get the mobile automatically… so if I create a view of data, a report in the system, I automatically can see that in my mobile, whereas in the EE model, I may need to take that and tunnel in this system, some of that is going to come from the WMS system, some of that is going to come from this system over here… it’s an inherently more complex model trying to get that to work.
And you get into some very specific functionality that companies need, so when you’re in the batch and process industry, lets say one of your customers comes to you and say, we’re going to buy the same product from you that you make for other people, but for us we want this to be a little bit more specific. So say you make a product that has a Ph range that can be anywhere from .5 to 9. For a typical company that’s an acceptable range. You get a customer that says, no, for me that’s not acceptable I want to have a Ph range of 8.7 – 9 because our use of that product is a little bit different so we need a tighter standard.
So the problem is if you’re going to try to set that up in this model over there some of that data is coming from the AR system, the Bill-to file. So I need to asset that up as a customer specific thing. Some of the data is coming from the item master file which is part of the basic inventory, and some of that is coming from the QC, and potentially the formulation. So the formulation is what this product is supposed to be, the QC is what this product actually is. So trying to tie that functionality across these three systems can be very challenging in this model. Often times what happens is you get close with that model, but to the extent that you can’t do everything a company needs, you end up with some sort of workaround. So the problem when you get to the workarounds, is that I’m trying to create process control where I bat 1000, where I handle every situation exactly the same, and it’s fully automated; Meaning the people on the plant floor don’t have to think about it.
So to the extent that I have these unique requests from our customers, it may be challenging for me to set up that process control. I may have to resort to Excel, I may have to resort to some sort of customization, and I may have to have a manual process which is very challenging in order to get that true process control.
In Deacom we handle that scenario where we have customer specific QC in our single system. All this data resides in one spot, our WMS system knows about it automatically… it can actually pick, automatically, the right lot for the right customer, given that requirement and that setup that’s in this single system.
Another example that’s similar, it’s a little bit different, but it’s a similar concept… Is that a lot of our customers require different documents for the same product for different customers. So let’s say you have a document such as a COA document, which is a Certificate of Analysis, and one customer requires you to format that document differently than another customer. Again when we get back to this model, this is going to manifest itself during the time when I’m shipping a product, which will probably be controlled by the WMS system. The data is going to come from the Bill-to company, the Item Master file, and also this document generation. Again, I’m crossing over three systems at this point. It makes it inherently more complicated to do that over here.
In Deacom again, this is much simpler process because all this data resides in the same system. It makers it easier for us to deliver that functionality without having to resort to customizations or workaround Excel files.
With the Deacom model, when we get into implementation, and somebody has a request that we don’t handle we can change the system to handle it, but we’re only changing it in one system. In the model on the left, I might have to change it in as many as 3 or 4 different systems to deliver that functionality. It can be done, but it’s a very challenging process, tends to be more expensive, tends to be slower… tends to get in the way of company growth.
So that’s what Deacom is doing, by delivering an inherently simpler model we are allowing our customers to evolve and grow faster… that’s why Deacom exists.