For many medium-sized packaging companies, breaking free from the grip of legacy systems remains a daunting challenge. What are the stories behind their letting go of outdated management systems and embracing the latest ERP/MIS solutions?
Breaking Free from Legacy Systems: Three Stories of Modernization in Packaging Companies
Article from | HiFlow Solutions
Legacy systems exist across the packaging manufacturing landscape, and many companies find themselves shackled by outdated software or infrastructure that struggles to keep pace with the evolving technological innovation that can set them apart from the competition.
For many medium-sized packaging companies, breaking free from the grip of legacy systems remains a daunting challenge. What are the stories behind their letting go of outdated management systems and embracing the latest ERP/MIS solutions? Let's delve into the mindset of stakeholders as they contemplate this pivotal decision.
Understanding the Legacy System Mindset
A legacy system is like an old friend—familiar, reliable, and comfortable. It's the software or technology that has been in place for years, faithfully performing its duties without major disruptions. To many stakeholders, the idea of replacing such a system seems unnecessary, even daunting.
Jeff Collins, former VP of Manufacturing turned Solutions Analyst, sheds light on the prevailing mindset: "Why switch to a new system if it ain't broke? It works fine for us, and our profits speak for themselves." This sentiment is echoed by many CEOs, CFOs, principals, production managers, and IT departments within medium-sized packaging companies.
Fear and Apprehension
For many stakeholders, the thought of transitioning to a new system conjures up fears of disruption, complexity, and resistance from the team. "Why rock the boat?" they ask. "Our current system may be outdated, but it gets the job done. And besides, our experienced operators have mastered it—we don't want to alienate them with unfamiliar technology."
This fear of change is understandable. After all, implementing a new ERP/MIS solution is a significant undertaking that requires time, resources, and buy-in from all levels of the organization. It's a leap of faith into the unknown, and, some feel, without a guarantee of success.
The Hidden Costs of Legacy Systems
Legacy systems, however, only appear reliable on the surface; they come with hidden costs and limitations. Over time, an organization’s infrastructure become increasingly stressed as technology advances and business needs evolve.
Collins describes the situation at Colonial Printing Mailing & Packaging, where he was VP of Manufacturing. “The plant had a system that was had an MIS system that was cutting edge…20 years ago, and was no longer supported. We were keeping paper logs and entering data into Excel spreadsheets. It took 20-30 touches for an operator just to put information into a job. We were not monitoring KPIs, so at the end of the month, it took days to produce reports.
"We realized we needed to automate the flow from estimating to production. And that automation would save us a lot of money.”
Legacy systems simply can't keep up with the demands of modern manufacturing. Moreover, relying on outdated systems and manual processes stifles innovation and hampers competitiveness. In today's digital age, companies need real-time data, streamlined processes, and integrated solutions to stay ahead of the competition.
‘If you don’t know your costs, you’re lost’
Dale Ford, a seasoned management consultant specializing in print and packaging companies, recently encountered a telling case study that underscores the insufficiency of legacy systems in today's fast-paced industry. The client in question—a commercial and folding carton plant acquired by a large European company—operated in Georgia, serving prestigious clients in the automotive industry such as Mercedes, Porsche, and Volvo.
A Critical Gap in Cost Calculation
Upon closer examination, Ford discovered glaring gaps in the client's operations: the absence of a system to calculate budgeted hourly rates and the lack of an inventory system. While sales provided spreadsheets for estimating costs, these documents proved to be inaccurate and unreliable. “Without realizing it, the plant was missing the data that compare estimated costs vs actual costs,” states Ford.
This deficiency in cost calculation posed a significant risk, as it hindered the company's ability to establish accurate pricing, develop estimates based on operating costs, and ultimately, operate profitably. Without access to real-time data and streamlined processes, the plant was at risk of operating below cost and jeopardizing its financial viability.
Inventory Management Challenges
In addition to cost calculation issues, the plant struggled with inventory control—a critical aspect of any manufacturing operation. Relying on outdated Excel spreadsheets and lacking proper controls, the company faced inventory overages and inefficiencies. It wasn't until Ford conducted an inventory review that the full extent of the problem became apparent. “Prior to Covid, they had overbought inventory. In June of 2023, we did the first inventory assessment in 5 years…” Ford explains.
The limitations imposed by legacy systems had far-reaching consequences for the print and packaging plant. Beyond hindering cost calculation and inventory management, the outdated infrastructure prevented the company from being able to scale effectively.
Homegrown Systems
As the Principal of Wausau Container Corp, Amy Plier knows a thing or two about the challenges of managing a legacy system. Founded several decades ago, the company initially took a cautious approach to technology, opting to develop their own manufacturing order entry solution rather than invest in off-the-shelf software. Little did they know, this decision would shape the company's operations for years to come.
"When we started out, we were mindful of our cash reserves," Plier recalls. "So, we enlisted the help of my brother, a skilled computer programmer, to create a bespoke solution that would meet our specific needs." The result was a rudimentary system built on FoxPro—a database management system that was later acquired by Microsoft and eventually discontinued.
The Vulnerabilities of Legacy Systems
Over the years, Wausau Container Corp continued to evolve, adding features like shop floor data collection, barcoding, and inventory reporting to their homegrown system. However, as technology advanced and business requirements grew more complex, cracks began to appear in the foundation.
"Our system served us well for many years, but it became increasingly clear that it was no longer sustainable," Plier explains. "For one, our reliance on FoxPro left us vulnerable to compatibility issues and security risks. Moreover, the ongoing development and maintenance of the system became a burden for our programmer, who had other commitments."
Breaking Free and Embracing Change
As the limitations of their legacy system became more apparent, Plier and her team began to explore alternatives. "We knew we needed a solution that was designed specifically for our industry and could seamlessly integrate with our existing processes," she says. "We also wanted to break down the information silos that had formed within the business due to the limitations of our homegrown system."
After careful consideration, Wausau Container Corp made the decision to transition to a software solution tailored to their needs. The transition wasn't without its challenges, but ultimately, it proved to be a turning point for the company.
Transitioning from Legacy to Modern Solutions
"With our new system in place, we've been able to streamline our operations, improve efficiency, and gain better visibility into our business," Plier says. "Data that was once trapped in silos is now accessible in real-time, allowing us to make more informed decisions and adapt to changing market conditions more quickly."
Looking back, Plier reflects on the journey from legacy system to modern software solution as a necessary evolution for Wausau Container Corp. "While it wasn't an easy decision to make, it was the right one for our business," she says. "In today's fast-paced world, staying ahead of the curve requires agility and adaptability. By embracing change and investing in technology, we've positioned ourselves for continued success in the years to come."
Futureproofing Packaging Operations
Despite the challenges, the benefits of transitioning to a modern ERP/MIS solution far outweigh the risks. By embracing change and investing in the latest technology, packaging companies can unlock new levels of efficiency, productivity, and profitability.
From automated workflows and real-time analytics to improved inventory management and enhanced customer experiences, the possibilities are endless with modern ERP/MIS solutions. It's not just about replacing old systems—it's about future-proofing your business and positioning yourself for long-term success in an ever-evolving industry.
In Conclusion
The journey from legacy systems to modern ERP/MIS solutions may be daunting, but it's a journey worth taking. By overcoming fear, embracing change, and investing in innovation, packaging companies can chart a course towards a brighter, more prosperous future. It's time to break free from the legacy system mindset and embrace the possibilities of modernization. Consider HiFlow Solutions.
The content & opinions in this article are the author’s and do not necessarily represent the views of ManufacturingTomorrow
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