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The North America ERP go-live in November 2025 caused severe system functionality issues that halted machine order entry and parts shipping for three full weeks.
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Management attributed the disruption to the unique complexity and scale of North American operations, which surpassed the stress-test assumptions and the previous successful APAC implementation experience.
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Operational constraints led to an estimated $30 million net sales shortfall in Q4, driven by limited plant capacity and an inability to provide customers with reliable shipment visibility.
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Profitability was pressured by $8.5 million in direct operational inefficiencies, including excessive overtime, expedited freight, and labor-intensive manual workarounds used to bypass system limitations.
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Despite regional challenges, international performance remained resilient, with EMEA and APAC delivering organic growth that validated the company’s global portfolio stability.
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Management emphasized that the ERP modernization remains strategically vital for long-term scalability and data integrity, despite the significant near-term execution hurdles.
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The 2026 guidance assumes a ‘tale of two halves,’ with Q1 heavily impacted by a two-week physical inventory shutdown to reconcile ERP data, followed by a recovery in the back half.
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Management has paused the EMEA ERP rollout indefinitely to focus 100% of organizational resources on stabilizing North American operations and achieving full efficiency by mid-2026.
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The company launched a dedicated ‘TNC Robotics’ group to accelerate autonomous solution adoption, targeting $250 million in AMR revenue by 2028.
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Guidance for 2026 projects 3% to 6.5% organic sales growth, with 75% of the growth driven by volume recovery and 25% by strategic pricing actions.
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ERP-related spending is expected to exceed $20 million in 2026, a significant increase from the original $5 million estimate, to cover remediation and ‘hypercare’ support.
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A global workforce reorganization was implemented in late 2025, expected to deliver approximately $10 million in annual savings starting in 2026.
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The company recorded an incremental $6 million accrued expense following a post-trial ruling in the OWT intellectual property dispute, bringing the total judgment to $20.2 million.
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Management noted that 2026 guidance does not yet account for potential impacts from recent Supreme Court rulings regarding tariffs, which may require future adjustments.
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The Board of Directors added two new members and committed to proposing the elimination of the staggered board structure by 2027 following constructive engagement with Vision One.
