Turkey is one of the most attractive countries for textile manufacturers and exporters due to its long traditions of fabric and apparel production and mature market. However, because of high competition, textile businesses need to upgrade their production processes and introduce cutting-edge technology in order to get ahead.
We have talked to Hasan Atilcan, at Hersüreç company to find out more about the Turkish textile software market, the process of ERP implementation and the importance of having a reliable partner.
Are there any good ERP solutions for textile companies in Turkey? As you probably know, our 1C:Drive development team is currently working on a box solution that can be quickly implemented and deployed. What do you think about it?
There are a few specialized solutions for the textile industry in Turkey. But when you say “the textile industry”, you need to keep in mind that there are multiple types of businesses and production processes, from producing yarn to weaving to subcontracting manufacturers. So there are different tools on the market that were designed specifically for this or that purpose, and companies choose them accordingly.
There are a number of questions one might ask to determine whether the solution will fit their needs. Does the software solve the company’s tasks? Are all the important requirements and processes considered during the implementation? How helpful is the implementation partner? If the answer is positive to all these questions, the company will most likely benefit from the software.
Having a reliable partner is a crucial factor. Just purchasing good software is not enough. The partner should be well familiar with the software they sell. The knowledge, know-how and experience of the partner are crucial. Each solution already has approximately 70-80% of the documents which cover legal issues and business processes of the enterprise. But the implementation and development side depends largely on the expertise and technical savvy of the partner. That solution can either bring company success and skyrocket the business—or it can turn into garbage and end up a failed investment. But you cannot blame this failure on the software alone.
It is like a three-legged stool. A knowledgeable partner, a good software solution and a customer who knows what to expect from the system are the legs of a stool. If one is missing, the stool cannot stand.
Exactly! For example, you can automate the production process using 1Ci ERP solution for textile industry, and you can carry out all kinds of production operations in the textile sector. If your partner knows how to do it, they can also automate the subcontracted manufacturing processes and the re-introduction of goods produced as a semi-finished product by subcontractors. You can run three different types of operations at the same time in 1C:Drive, but other software solutions also offer them separately.
In connection with the previous question: What does flexibility and customization mean for textile companies?
Now, as you said, this question is actually related to the previous topic. The production process of each manufacturing company is unique. Operations they use at each stage can be different. Some need to automate operations related to machinery. They track the capacity of the equipment, for example. Others have more mundane requirements, such as to do salary calculations or manage performance of the staff responsible for machines.
However, if the software you use has the flexibility to do all this, and if the partner has the ability to implement it, you can have it all in one system. But still, there is no such a solution that would provide all the required modules out of the box. Usually, there are standard functions available with the core product. The partner develops and adds the required functionality. So you might say, the partner sews a haute couture suit, a custom dress.
No company’s production process can be fully standardized. Each company has a unique process. If the partner doesn't know how to customize the platform to fit the company’s needs, failure is inevitable.
So customization and flexibility are critically important for any production company, given that there are unique operations and routes.
There are a lot of unique processes in textile companies. Every company builds their workflow from scratch. What unique processes do company owners have to skip because of the lack of flexibility of the solution?
For example, in yarn production, what is the raw material to produce yarn? It’s cotton. You buy 20,000 tons of cotton, and you put it in your warehouse. Then you bale it according to the quality class. After getting the cotton, it should go through the carding process. Next, a BOM is created according to the quality category.
You won’t find a ready-to-use module aimed at classification of cotton quality, no out-of-the-box software has this function. So you need to find someone to develop this process on the platform. For example, if we take the first stage of producing yarn—it's a basic process, but you can't expect any software to do it out-of-the-box, unless it’s specialized software for yarn production. But if the ERP system you use is flexible and customizable, like 1C:Drive, you can add this functionality.
Do you think 1C:Drive suits medium and large textile businesses? Can it be adjusted to fit a smaller business? For example, the WhatIf brand.
In my opinion, a textile company with 2500 employees can easily be managed with 1C:Drive, there will be no problems. No matter how many employees there are, no matter how unique the processes are, for a flexible and customizable system, the size of the company does not matter. Regardless of the number of employees and the industry, you can run any company, big or small, with 1C:Drive.
If it is delegated to the right partner, the project will be successful. If not, the failure is most likely on the partner. The problem is usually caused either by the partner or a localization issue, or users themselves. Because I have been making money thanks to 1C:Drive for the last 2 years. I completed 20 projects. If 1C:Drive wasn’t good enough, I wouldn't be able to make any money.
Next question was born after an interview with an apparel brand WhatIf. They decided to implement 1C:Drive at the early stage of business launch. But I know a lot of cases when companies decide that they need an ERP solution only after a while. What benefits can you get if you automate your processes from the very beginning? What immediate results can be visible for the business owner, if they start using automation after the business is long-established?
It's actually a bit about the vision of managers or owners of the company.
What does ERP mean? Enterprise resource planning—in fact, we are talking about an internal control system. What does an internal control system mean? It is a system that meets the expectations of the legal authorities and, at the same time, helps manage your administrative and production processes.
Now, if the company owner wants to adopt an ERP system from the beginning and move forward with it, the ERP system can help a lot. Or you can implement it on the go, there will be no trouble here as well. What's the difference? What benefits can you get if you introduce an ERP system as soon as you establish the company?
In the first place, the system allows you to record all the expectations related to the legislation systematically, in terms of accounting, for example. If you are a manufacturing company, you can easily manage all your processes and financial records, including the cost of the goods produced. You see the cost of a product, but you also see the inventory costs.
What is the internal control system? It is actually a control mechanism at the same time. The purchasing employee goes to the supplier, spends your cash, makes purchases constantly, but is buying stocks that you do not actually need. So they keep your money in stock instead of cash. If you don't monitor stocks, you won't be able to catch it.
Therefore, managers or owners using an ERP system have the ability to manage their money and stocks, to see the cost of the goods produced if they are manufacturers, to get the profit and loss balance sheets and financial statements as soon as they click a button. Or, if the ERP system has its own reports that they want to follow administratively and the system allows it, it provides a perspective where they can see their reports as a dashboard or as a unique report.
Of course, if you do this halfway, there is no problem. Or you implement it at the beginning, again, there is no problem. Therefore, in any case, a company owner who purchases an ERP system should be a little more visionary and plan company policies within the system.
But I still believe that the right product does not guarantee success. Not every ERP system is the right system. When a customer who knows what he or she wants, the right partner and the right ERP system come together, success comes naturally. A good partner can run even a bad ERP system, but the right ERP system cannot be run with a bad partner.
What is the step by step process of implementation for a textile company? And is it possible to implement a system without interrupting the ongoing processes?
First of all, I meet and talk to the customer. At this stage, the customer already knows the cost of the license, but the main concern is the implementation and development cost. And of course, the costs that he or she will pay for the rest of the time, that is to keep the ERP system alive.
Let me be frank, because I know the industry, and this has to be said. Generally, eight out of 10 partners are probably not telling how much the total ERP’s operating cost will be. This is unethical, that's why I'm saying it. So I share all the costs at the initial meeting. I find out the customer’s needs and take notes, and then prepare an offer for the license plus customization.
Sometimes I visit the customer’s production facilities and analyze the processes for a few days. Based on the results of this analysis, I present a proposal. Because there are big companies and we really need to go in there with a serious team and analyze. I calculate the price as a result of the analysis. After that, we start the process of implementation.
There is a common issue for every industry, including the production industry and textile, that implementation may interrupt the production process, but it is in your hands to manage it. You may run the implementation correctly, but the user may not be able to manage it correctly.
For example, you create a BOM. First, you create the product card of a product that you will produce. What do we have in this product card? We have a parameter called the stock replenishment method. There are several parameters. Do we need to purchase materials? Is it going to be subcontracted? Is it an in-house production?
Then we create routes. We determine what materials we will use on the route. We run an operation. If it is subcontracted manufacturing, we also produce a semi-finished product based on subcontracting and add this to the BOM as well. Then we have to make production either for stock or for a special order. So we have two options. You either make a forecast and produce accordingly. Or you receive a sales order and you make a production plan accordingly.
I am talking about 1C:Drive here, but it is similar in other ERP systems. You make production planning based on sales orders. Then the system executes the operation and creates the operational documents related to them. It generates a GANT chart over these operation documents where the planning is done based on workstations and machines. It also creates an MRP according to this BOM. The system checks all warehouses to see if you really have enough goods in the warehouse for production. If something is lacking, the system makes a suggestion to you to buy these items before going into production.
In other words, Demand Planning is done with MRP. Next, we purchase the materials in the purchasing demand planning and go into production. After that, we implement all the operations and run them based on workstations. Then, when the production is completed, the system creates a production document. So we convert it from a semi-finished product to the final product.
We have the opportunity to see the cost of the goods produced. We have run operations, and to find out the cost of all of them, we added the price, the total cost of the materials we used for subcontracted production, and the cost of subcontracting, if any. That’s how we can calculate the total cost of the goods we produced. The difference between the sale price of the final product and the production cost is also calculated by the system as profit for the company.
Why do you think interruption of production may happen?
It can be interrupted either because of the partner or because of the user. If the partner is not experienced enough it can be interrupted. And sometimes it is the user’s fault.
Think about how effectively people use an iPhone, how many people use each and every function of an iPhone for real? There are also those who just simply make calls but nothing else. So there are people who can't use 1C:Drive fully as well. There are people to whom I was able to explain BOM in 15 minutes. And there are people to whom I had to explain it over and over again for 3 months.
But our task is to provide each customer with the opportunity to use 1C:Drive at the maximum level. In other words, we are trying to explain it differently to people of any level, according to their needs. We have documentation. When we hand in that documentation, a person who did not understand for a month can finally understand it after 3 months. So, if the implementation is interrupted, it takes 3 months at most.
How long does it usually take to start and finish an implementation?
It depends on the needs of the customer. There is a one-year project, a 6-month project and a 3-month project. Right now, I have a project that has been going on for a year, I’ve just finished it. Now we move on to the second phase.
After you finish an implementation project, do you continue to support your customers afterwards?
When I start a project, I embrace it like a marriage. Because purchasing an ERP system means that a company's life will now change completely. Controlling all company-related policies means people are dependent on you to design all the processes there.
For example, if production stops and the customer calls you, it would be very unethical not to help them to fix the problem. So I provide support, whether we have a maintenance contract or not. Of course, I prefer to continue with the contract, but even if we don’t have it, I help out when they call, say once a month, once every 3 months. Because they are in need of advice, so I act accordingly and try to support them.
Can an implementation project fail?
Yes, any project may fail. As stakeholders of our 1Ci ecosystem, if we do not want any 1Ci project to fail, so we must distribute the projects or incoming leads to the right partners. If a project fails, all the hard work we've done over the years will be wasted. I suggest employing the right partners and training them well. If they are giving it to any partner just to get a job, one day one of these partners will fail a project. We will also get in a difficult situation then.