SUMMARY

A legacy system is outdated computing software and/or hardware that is still in use. The system still meets the needs it was originally designed for but doesn’t have the capacity for growth. The following stories offer a glimpse into three legacy situations and offer a solution to legacy system challenges.

Legacy systems exist across the packaging manufacturing landscape, and many companies find themselves shackled by outdated software or infrastructure that struggles to keep pace with the evolving technological innovation that can set them apart from the competition.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 What are the stories behind their letting go of outdated management systems and embracing the latest ERP/MIS solutions?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.

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 print and packaging companies.

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 “Our current system may be outdated, but it gets the job done.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.

Legacy systems, however, only appear reliable on the surface; they come with hidden costs and limitations. Over time, an organization’s infrastructure becomes 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 an MIS system that was cutting edge…20 years ago…and was now 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.”

As the Colonial team recognized, legacy systems can’t keep up with modern manufacturing demands. 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.

Upon a 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 management 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.

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 was preventing the company from scaling to embrace new opportunities. Upgrading processes and technology is on the agenda as it moves forward under new ownership.

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.