RSSPrint

Choosing Goals for Your ERP Implementation


Has your organization defined the goals for your ERP Project?  I am sure you have and that you have some very specific goals, reduce inventory, increase inventory turns, shorten manufacturing lead-time.  These are great goals.  How are you going to achieve them? 


You may already know that there is no module to help you be more responsive to the customer, nor a button to push to help you reduce your inventory or task to run to increase your inventory turns.  There are no magic acts in a Business Management (ERP) package to obtain these goals. So, what goals should a company focus for assistance? 


When we begin working with companies, their goals are always specific.  As a result, they lose focus on the big picture according to Mike Roman, Business Capabilities Architect
 and founder of Manufacturing PracticesMike began advising small and midsized manufacturing and distribution organizations in ERP selection and implementation more than 20 years ago and performed more than 60 successful ERP implementations on three continents.  Today, Manufacturing Practices continues to work with the same types of organizations to help select and implement ERP System to move them from good to great. 


Mike says that focusing on the big picture is the first step.  “A business management system is more a people system than some companies understand, in the beginning.  They need to state the goals for the project in that light", according to Mr. Roman.  A very real and productive approach for an engineering focused manufacturer would look like this:

Vision:

Harnessing information systems tools to make them assets for the enterprise.

Mission:

To provide the enterprise with a roadmap to achieve lean business systems optimization in an affordable, timely manner so that all the stakeholders realize the most out of the 21st century Business Management toolkits.


Scope:

  1. Establish that systems are mostly people and business process activities and software/hardware issues are really secondary to achieving integration of information systems and business activities
  2. Define the available types (not specific offerings) of Business Information systems available. The goal is to identify an 80% fit between technology and business processes.  Use backbone systems that communicate with specific business requirements (i.e. An ERP system that accesses its core product and process information from engineering CAD, CAM, CAE and/or PLM systems).  Find point solutions that address specific functionality in a more or less stand-alone manner (i.e., software that integrates Work Center Machinery with the ERP System)
  3. Divide the functional business requirements into Major and Minor areas of importance.  Major areas are Operational Management using the ERP System, project management tracking and reporting, product and process design & configuration management using PLM toolsets, and requiring ERP and PLM to work together seamlessly.  Minor areas might be HMR, Sales and Marketing, Accounting, Quality Assurance, and Governmental Regulation reporting.
  4. Define system selection and implementation activities that would require either replacing or upgrading legacy systems.
  5. Define the basic business metrics like Inventory Turns, Days Outstanding AR, Days to Quote, Later Shipments and defining performance metrics for the new business processes deployed because of upgrading or replacing legacy systems.
  6. Define team-building activities and goals to facilitate Intra-departmental and Inter-departmental integration to remove potential silos of information.

“Once the organization agrees to this plan, the departments adopt what contributions they will make to the organization to execute the plan”, says Mike.  “Those contributions are defined in point 5 above”, he says.  “In this manner, top management is driving the process with each department making the proper contribution to the overall success of the organization.  When the team is moving toward a common goal, they act in concert.”  The common goal is the proper implementation of the system, the departmental goals are the objectives available from the proper functioning system”, says Mr. Roman.


What are those metrics?  “Again, the departments contribute and measure their activities according to KPIs (key performance indicators).  KPIs help companies let their people define the success measures they will make and be held accountable to achieve.  Companies that Keep People Involved, accomplish far more than those that do not”, says Mike.  For information about define and using KPIs, read,
Using KPIs to Get a Handle on Your Business

The Vision and Mission stated here are rather generic and with a few minor changes might serve as the rally point for many organizations attempting to find and implement the business management system to move them from good to great.  Make sure that your goals for the implementation are ‘big picture’ goals.  Department objectives, like inventory turns, inventory reduction, and shorter lead-times, are really KPIs to help measure how well people use the ERP System.

If your organization is seeking assistance to select, implement, or gain better results with an existing ERP System, Manufacturing Practices, Inc. can help.  Call us at 770-772-6894, Skype:michael.a..roman, email:operations@manufacturingpractices.com.