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Supply Chain Network Optimization

Transformation

Enterprise Solutions 

Enterprise Solutions Evaluation & Selection

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Enterprise Solutions Optimization

Plex Smart Manufacturing Platform

Connected Devices

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ERP Design & Implementation

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One approach manufacturers can take on their journey toward Industry 4.0’s goal of continuous improvement comes from enabling transparency of the true product cost drivers, specifically by the implementation of Dynamic Costing™. Traditional standard costs can be helpful when looking at certain static business lines a manufacturer produces, but as production mixes at the plant are now changing faster than ever before, using only those historical standards may be hurting the organization’s actual overall equipment effectiveness (OEE) by focusing on the “low cost product” blind to its impact on through put. Most importantly, it may even be damaging the manufacturer’s bottom line by not having a proper understanding of which products are responsible for driving profitability today. In the recent webinar sponsored by the Original Equipment Suppliers Association (OESA), “Industry 4.0: Gauging your enterprise technology and the power of integration,” members of Baker Tilly’s supply chain and manufacturing consulting practice Peter Pearce, principal and practice leader, and Cameron Reid, director, discussed how Baker Tilly’s Dynamic Costing could help a manufacturer more reliably determine the range of its actual costs.  Depending on a manufacturer’s industry 4.0 maturity level, an organization may be able to leverage its existing information to enable Dynamic Costing. In turn, those insights can drive business results and help the organization make informed decisions in a rapid time frame. Traditional standard costing versus Dynamic Costing™ The main components of traditional standard costing are materials, labor, fixed overhead and variable overhead — but are not the only components that should be factored into a business’s costs. The data gathered when using the standard cost accounting method is most likely aggregate averages that lags current production. Standard costing depends on snapshots of costs for a given total period in time for most of its data, which creates challenges to see within a narrower production time window. Information used in this type of costing is not updated frequently and as a result it does not provide for a clear understanding of root cause for when a cost variance occurs. Without real-time data driving the costing models, manufacturers will lose the opportunity to see the detrimental effects on plant throughput, worker efficiency and product quality. These should be reason enough to leave traditional standard costing behind, but Pearce said, “the real reason standard costing is becoming obsolete is customers are only going to pay a certain amount for a product regardless of what it costs an organization to make it. The market drives the price and a company needs to be prepared to pivot to what they can manufacture to keep up with the price the customer demands.” Dynamic Costing measures real labor, real material consumption, real overhead and asset utilization, environmental factors, quality; scrap, and micro events that are tied to assets (e.g., shift changeovers, equipment downtime, etc.).   Benefits of Dynamic Costing™ Moving from cost accounting to cost management analytics is a significant advantage when using Dynamic Costing. Another benefit is being able to use real-time information, allowing an organization to be responsive to market changes. Dynamic Costing incorporates the intangibles that standard costing ignores, e.g., micro-events like equipment failure as well as quality, scheduling, scrap, environmental factors and suppliers and their materials. Separately, these costs may not seem to make an enormous difference to an organization’s bottom line, but together, they can add up quickly. Finally, it focuses on reducing costs across the enterprise versus looking at a specific product. To move toward Dynamic Costing, an organization will need some Industry 4.0 enabling tools. Data analytics is an “enabler” that will provide manufacturers with statistically meaningful information to help them make real-time decisions quickly — but only if they are tapping into the right information. This is where integration comes in. “An organization’s production technology should be integrated using a solution set, such as Plex, IFS, Oracle Manufacturing Cloud and other transactional business systems, which supports the needs and demands of Industry 4.0, from the top floor to the shop floor,” Pearce said. For instance, it should connect manufacturing assets with the financial department of the business, so they can really tune into what is happening immediately within the operation.
Baker Tilly has contextualized a five-step Dynamic Costing road map to execution within the Industry 4.0 environment below. Step 1: Planning One of the first things an organization needs to do is to identify its business objectives. For most organizations, their business objectives change over time. Reid said, “For example, when a manufacturer starts an initiative, it is solely looking to maximize profit. When a “black swan” event occurs, e.g., a pandemic, the manufacturer has to shift from maximizing profit to surviving.” Having an Industry 4.0 structure in place provides flexibility and allows it to rapidly change its business objectives and make appropriate decisions.  Another part of planning is assessing systems or infrastructure, whether it be software or staff, and making sure the organization has suitable tools and resources available. Lastly, by looking at its culture and structure, an organization can determine how it is progressing along the maturity continuum. Step 2: Gather data and analyzing operations An organization must understand the true source of data it’s using to make decisions. It could be from internal sources, such as its enterprise resource planning (ERP) system, manufacturing execution system (MES), or even spreadsheets. It may also come from external sources, like a third-party payroll administrator. A manufacturer should also be looking at its hardware needs — programmable logic controllers (PLCs) on the shop floor, human machine interfaces (HMIs), scales, robots, etc. — and if it has devices and machinery that can be included in the IIoT environment. When it has the right hardware, it will be able to identify where that data is and how to collect it.  Gathering data is also where an organization should be taking stock of its master data. Reviewing that master data and ensuring its accuracy is critical to that process because otherwise “garbage in, garbage out” is not just a saying, but an actuality for that organization. Step 3: Build a program to assimilate information This step is not based entirely on merely building an application for accessing information; it is also about putting in place the controls necessary to ensure movement along the continuum of Industry 4.0 is sustainable. The organization needs to have the correct technology to leverage this information, as well as the management wherewithal to capitalize on the information that is available.  Other items critical to this step are: The utilization of extract, transform, load (ETL) tools in terms of defining analytic workflows (both process and data workflows) and to the sustainability of the overall process The development of integration maps, which indicate where the organization is getting information and where there are possible gaps in the data The deployment of an analytic framework and associated models, showing how data and analytics flow Step 4: Implement and validate against business objectives  When first talking about an implementation, the organization often focuses on business objectives, but when it is time to get into the details of an implementation plan, those objectives are put on the back burner. It is important to continually validate against the business objectives and ensure the solution put in place supports the organization. At this step, an organization should assign a dedicated project champion to stay focused on the objectives, and demonstrate the benefits of the solution to team members as well as the employee base. The organization should review results against business objectives and then validate product level results to achieve confidence with a top-down view. The final part in this step is communication. At every stage within an Industry 4.0 deployment, Reid said, someone should be asking, “Is this appropriate for the organization?” It should be an open communication so everyone is confident the technologies being put forth are going to be beneficial to the organization. Step 5: Institutionalize Dynamic Costing™ Organizations now have the tools to collect and analyze data to make decisions rapidly and continuously over time. With Industry 4.0 integration of shop machinery to back-end systems, manufacturers have real-time information at their fingertips. Processes and procedures should be defined and implemented in order to make the institutionalization and continuous improvement aspect of this a reality. If an organization does not revisit improvements, it will either not progress or, worst-case scenario, slide back into previous behaviors. Finally, with Industry 4.0, manufacturers deal with contingency planning and should perform “what-if” scenarios, working with the technology that is in place. It gives the organization the capacity to analyze and take action upon near real-time information. If organizations look back to what issues they were talking about in December 2019 or January 2020, the conversations they are having now are much different. It is that ability to rapidly pivot on what their objectives are that will be key to their success over time. 
For more on this topic, please visit Baker Tilly’s Dynamic Costing services page.

Learn how moving from standard cost accounting to Dynamic Costing can provide visibility to product cost data and real-time insights to drive business results and help your organization make informed decision.

Dynamic Costing™ 

Industry 4.0

Oracle SCM Cloud

Supply Chain Analytic & Financial Solutions

Dynamic Costing™: empower operations to impact EBITDA

The latest data for 2020 predicts a significant drop in construction growth as a result of COVID-19, among other factors. With growth decreasing and significant losses in other industries, it’s important for contractors to understand what they should be focusing on in order to prepare for the economic rebound and protect their financial resilience.  As senior manager, Laura Cataldo states, “The important thing for contractors to focus on is to strategically diversify, complete projects based on prior experience and only take jobs that have the likelihood of profit potential. It’s important to invest in understanding the needs and how to meet the needs of customers post-COVID-19, because all industries have been impacted and if you can understand how your customers’ industries have been impacted, you’ll be well-positioned to be successful as a partner to them moving forward.” Listen to the entire recording where industry experts share lessons and examples from around the world of companies ensuring profitability, being proactive and challenging competitors.  IFS MindFuel is a series of industry specific, thought-provoking sessions where industry leaders share their perspectives, advice and “how tos” to navigate these turbulent times and build for the future.   Watch the video Create your free account and you’ll be directed to the video. Speakers Laura Cataldo, Senior Manager of construction and real estate services, Baker Tilly Vee Baker, Director of Global Campaigns, IFS For more information or to learn how our specialists can help, contact our team.

Baker Tilly speaks at IFS MindFuel session, which explores what construction contractors should be focusing on in order to prepare for the economic rebound as a result of COVID-19.

Construction

Construction Risk Management

Construction coronavirus resources

How can a construction industry challenger capitalize on the current circumstances?

Throughout the project lifecycle, having the ability to control the project commercials and financials is critical to optimizing margins and delivering to contract. As Baker Tilly partner Tony Ollmann states, “during this pre-construction phase, being able to bring all of the players in upfront, well before construction contract terms have been defined, is essential to a successful project. There will always be surprises, that’s the nature of construction, but that doesn’t mean we can’t all work towards minimizing the number of them that happen with good upfront planning and communication.” Listen to the entire recording where industry experts explore how best to attain and maintain control of project commercials and financials – delivering success for your business.  IFS MindFuel is a series of industry specific, thought-provoking sessions where industry leaders share their perspectives, advice and “how tos” to navigate these turbulent times and build for the future.   Watch the video Create your free account and you’ll be directed to the video. Speakers Tony Ollmann, Partner, Baker Tilly Russell Collie, Project Manager, IFS Steve Treagust, VP of Industries Programs, IFS  Robert Fitzmaurice, Director, CS Consulting Group For more information or to learn how our specialists can help, contact our team.

Baker Tilly speaks at IFS MindFuel session that explores how construction industry organizations can best attain and maintain control of project commercials and financials – delivering success for your business.

Coronavirus Resource Center

What makes for commercial and financial success in major construction projects?

Server Video Food service equipment manufacturer Server Products Inc. manufactures more than 1,000 innovative warmers, servers and dispensers for condiments, sauces, salad dressings and hot toppings. The family-owned business has grown to more than 135 employees in its 120,000 square-foot facility in Richfield, Wis., serving some 1,200 customers worldwide.  Server Products’ ERP system hadn’t been replaced since the Millennium. The system had become so outdated, unstable and customized that it could no longer be upgraded. The company decided to purchase and install a new ERP system and chose Baker Tilly to assist with the selection and implementation process. They replaced the outdated and unstable ERP system with IFS Applications ERP system, enabling real-time planning and inventory analysis, timely discrepancy resolution, and more.

Food & Beverage

Supply Chain Solutions & Applications

Server Products implements IFS applications ERP system with Baker Tilly

Client background Food service equipment manufacturer Server Products Inc. has been creating innovative warmers, servers and dispensers for condiments, sauces and toppings since 1949. The family-owned business has grown to more than 135 employees in its 120,000 square-foot facility in Richfield, Wis., serving some 1,200 customers worldwide. The company continues its mission to manufacture the highest quality and most cost-effective products in the industry, and to expand its position in the global marketplace by continually improving its products, equipment, processes and resources.
The business challenge For more than two decades, Server Products had relied on its homegrown databases to track quality-related issues with its products. In 2017, business leaders knew that the old method of quality management (QM), with disparate data and manual processes, couldn’t keep pace with mature QM processes required in the digital-first era. When a product discrepancy arose, the quality technician would be called to the production floor, the discrepancy would be confirmed by searching through manual documents, and then the technician would hand-carry the issue through the company, consulting with various departments, until it could be resolved. The issue and resolution were recorded in a database, never to be cross-referenced again.  The company had just completed a major implementation of the IFS Applications ERP system in June 2018, the centerpiece of its digital modernization. With the system in place, Server could now add the IFS Advanced Quality module to streamline, document and escalate inquiries in a mature system that could add value and lower risk for business processes in the entire organization. But could Server do it alone? The subject matter experts that were identified for the Advanced Quality implementation were not a part of the original core team that implemented IFS, so Server Products turned to the expertise of trusted partner Baker Tilly, which had guided them through the previous IFS project, for implementation help.
The Baker Tilly approach Baker Tilly helped the Server team define and follow a strict implementation process that would be critical to the project’s success. Together the team added new capabilities to Server’s quality operations and replaced an outdated legacy system. Baker Tilly conducted training and provided on-site support. Most notably, Baker Tilly helped Server navigate one of the most critical steps in a module implementation – the testing process and development of effective test scripts. The new module went live on August 26, 2019, seven weeks ahead of schedule. On the first day, the Server team simulated a problem with one of its product components to make sure the system worked correctly. They ran the issue through its Materials Review Board function and escalated the problem to the Non-Conformance Report (NCR) function for third-party product inquiries. They also conducted a finished goods audit in the system, a unique piece they had set up themselves. “Everything was working well from the first day. All the testing we did helped make sure that it worked like it was supposed to,” McMahon says.
The business impact  The Advanced Quality module now allows Server to streamline documentation and communication, eliminate the manual handoffs, and elevate issues for resolution in a timely manner. Now when a product discrepancy arises, all of the component inquiries -- the notifications, research, communication and resolution – can be done in one system. Among the many other benefits of the Advanced Quality module: Seamless escalation of third-party component issues to NCR and the Corrective/Preventative Actions (CAPA) functions Quality Management System auditing -- the ability to plan and track product compliance audits in IFS, and track the corrective and preventive actions. The ability to gather and analyze data, once on disparate systems, to generate reports and track product quality improvements. For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

Enterprise Systems 

Enterprise Systems Implementation

Server Products completes IFS Advanced Quality module implementation 7 weeks early

Client background Food service equipment manufacturer Server Products Inc. began in the basement of an old flour mill in Menomonee Falls, Wisconsin, in 1949. Today, Server manufactures more than 1,000 innovative warmers, servers and dispensers for condiments, sauces, salad dressings and hot toppings.  The family-owned business has grown to more than 135 employees in its 120,000 square-foot facility in Richfield, Wis., serving some 1,200 customers worldwide. The business challenge Server Products’ ERP system hadn’t been replaced since the Millennium. The system had become so outdated, unstable and customized that it could no longer be upgraded. Processes had not been well documented, and managers couldn’t educate workers on how to use the system properly.  The company decided to purchase and install a new ERP system, but it had never gone through such a pervasive implementation that could potentially overwhelm workers – many of whom had been with the company for decades and were accustom to manual processes. What’s more, a younger management team had little experience carrying out such projects. Server realized that it needed to leverage the expertise of a trusted partner who could help them select the right solution and lead them through the implementation.  Server Products chose Baker Tilly for its clear process approach to selection and implementation. They viewed the ERP implementation as all-encompassing, not just standing up the ERP system and walking away. Baker Tilly would evaluate the entire business and make sure that everything worked in the ERP, as well as with any integrated systems.
The Baker Tilly approach After several requirements-gathering sessions with Server executives and employees, Baker Tilly performed an ERP market analysis and came back with five ERP applications that met Server’s requirements. Its structured, fact-based approach leveraged data, not feelings or bias, to help Server whittled down the selection to two vendors, who were invited in for demos.  Baker Tilly recommended that the vendors perform a demo of Server’s specific requirements, instead of a traditional sales pitch, to ensure the application met their requirements and that process owners could actually see the Server business processes come to life in the applications. Server ultimately chose IFS Applications ERP system.  Baker Tilly took the lead on the ERP implementation with a methodical approach that helped redefine business processes that use industry best practices, leveraging many of the best practices already built into the IFS solution as guiding principles.  Throughout the engagement, Baker Tilly led Server through the critical change management process, including coaching, communication and training. First, Baker Tilly helped Server choose a core team for the project and a steering committee, and then helped coach the groups on their responsibilities. The team drafted consistent communication about the project that was sent to Server employees, and set up training sessions and training rooms where employees could practice on the system before its rollout. 
The business impact The new ERP system went live in June 2018. During the rollout, Baker Tilly staff arrived at the facility at 6 a.m. each day with the Server workers – walking the floor, taking shifts, helping anybody who had questions, and working the weekend to ensure that existing data was transferred properly into the new system. Server operations returned to full speed within a week and a half of go live.  Among the many business benefits of the new ERP system:  Shop floor planning is now done in real time in the ERP system. Planning time has been cut in half.  Receiving and purchase order discrepancies that wouldn’t be found for 30 days are now discovered within 24 hours.  Logistics and shipping daily workflows that were done on paper are now electronic.  Real-time analysis of inventory transaction histories help resolve issues with inaccurate inventory.  Download the case study >  For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

Food service manufacturer Server Products Inc., replaced outdated and unstable ERP system with IFS Applications ERP system, enabling real-time planning and inventory analysis, timely discrepancy resolution, and more.

Enterprise Systems Evaluation and Selection

Change management and process expertise are keys to ERP success at Server Products

We work alongside our clients and teach them all facets of their IFS implementation so they fully understand and can take complete ownership at the end of the engagement with confidence. 

With fully integrated change management and project and program management capabilities, we bring a proven methodology that combines “tried and true” implementation principles with flexible techniques for successful implementations. We focus on the business process rather than a simple functional installation; our approach to an ERP implementation is a differentiator in the market. 

Packaged-Enabled Process Re-Engineering and Software Configuration

Manage Integration / Third Party Applications

Support Inexperienced Functional Core Team

Support Capacity Constrained or Inexperienced IT Staff

"By the end of the implementation, people here at Server, regarded Baker Tilly as family. The dedication they showed to the project...not just to deliver IFS, but to keep our best interests in mind, from a business and even personal perspective, showed through in may ways. This solidified the promise they made during our interview of them...that they would be by our side the whole way through."

Robby Burmeister, IT Director at Server Products

Cindy Bratel is a director with Baker Tilly in their management consulting practice and is located in Milwaukee, Wisconsin office. She is a leader within the enterprise solutions team and has over 25 years of experience helping clients leverage technology to transform and grow their business.

Baker Tilly provides a full complement of resources and capabilities, and an approach to IFS Applications implementations that is transformational. Baker Tilly specializes in a package enabled process approach resulting in market leading digital transformation.

Baker Tilly provides a full complement of resources and capabilities, and an approach to IFS Applications implementations that is transformational. Baker Tilly specializes in a package enabled process approach resulting in market leading digital transformation.

Helping manufacturing and distribution companies reduce risk and improve efficiencies across their entire supply chain. 

We bring insight across the supply chain to improve efficiencies, reduce risk and offer solutions as market disruption continues.

Manufacturing and Distribution | Manufacturing Planning | Baker Tilly

Baker Tilly specializes in food and beverage manufacturing and distribution accounting and consulting services, rooted in supply chain analytics.

Food & Beverage Industry Consulting | Baker Tilly

What if your firm turned project management into a strategic competitive advantage over your competitors?

Baker Tilly’s program and project management consultants help companies create their own right-sized operating model for program and project management and transform program management into a strategic competitive advantage.

Structured data from traditional business intelligence systems and unstructured data from big data solutions are helping decision makers better understand why things are happening in their organizations.

Become insights driven with data and analytics.

Analytics are being used to harness vast amounts of internal, external, structured and unstructured data to extract insight for more intelligent decision making.

The amount of internal and external data available to organizations today presents both tremendous challenge and unprecedented opportunity.

In today’s disruptive technology environment, many organizations struggle with understanding how to modernize their legacy applications.

Our proven IT technology assessment, roadmap and software evaluation services help demystify the complicated technology ecosystem.

Baker Tilly provides a custom-tailored approach to help your organization manage the change associated with any complex transformation, and minimize impacts to your employees.

Our change management specialists work with you to build the right plan to drive adoption and increase the value realized from your technology, process, transformational and structural changes.

IFS

Dynamic Costing™: empower operations to impact EBITDA

How can a construction industry challenger capitalize on the current circumstances?

What makes for commercial and financial success in major construction projects?

Server Products implements IFS applications ERP system with Baker Tilly

Server Products completes IFS Advanced Quality module implementation 7 weeks early

Change management and process expertise are keys to ERP success at Server Products

Manufacturing & Distribution

Food & Beverage

Program & Project Management

BI & Management Reporting

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Big Data

Technology Enablement

Change Management

We work alongside our clients and teach them all facets of their IFS implementation so they fully understand and can take complete ownership at the end of the engagement with confidence.

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