Follow Us On Twitter RSSPrint

About ERP Systems

Top Three Questions prospects ask Manufacturing Practices, Inc.

Michael Roman - Monday, February 28, 2011

Top Three Questions Asked of Manufacturing Practices, Inc.


We receive and comment on a number of questions on a regular basis.  Here are the top three questions we receive.

What specifically is an ERP System?

Although there are some differences between the details of what comprise an ERP System, there are basic pieces that must exist to manage an Enterprise.

  1. Planning in the short term – (2 years or less)
    1. The planning system allows proactive activities to plan what is needed in terms of Material and Labor for the planning period
    2. To gain the best advantage in using the planning system, Inventory, Bills-of-Material, and Bills-of-Operations (Routings) need to be accurate
  2. Execution – activities that allow the plan to be performed
    1. The execution system operates on the planning system data to procure the materials and labor needed based on the dates and quantities from customer orders or the Master Schedule (or Forecast) data
    2. To gain the best advantage in using the execution system, reporting methods must be timely, and work center efficiencies and Part Master Lead-times need to be correct
  3. Control – activities that tie back to the planning and execution systems that identify if the plan is on target to meet customer goals and where is it failing to meet expectations
    1. The Control system operates on shop floor and purchase orders from the execution system and creates data that identify if dates and quantity deliveries are being met
    2. To gain the best advantage in using the control system, proper attention needs to be focused on the dates created in the planning system

Contrary to most beliefs, any company can and should plan resources in both the short and long term.  Sometimes those resources are internal people, equipment, and materials.  Sometimes these resources lay outside of a company’s boundaries.  Regardless, a company must and can plan them.  Starting and maintaining a planning activity like Sales and Operations Planning (S&OP) is not difficult.  The difficulty is getting past the objections for performing the needed planning activities.  The S&OP Process lays the foundation for the hours of production needed, the types of raw materials needed, and the delivery of customer expectations as well as a product so that daily activities becomes ‘business as usual’ instead of fire fighting activities.

What is the biggest hurtle companies face in implementing an ERP System?

Small and midsized organization all have a common factor that contributes directly to their achievements, the entrepreneurial spirit.  They act quickly and forthrightly and face the consequences.  Planning is not one of their strengths.  To the question in point, more than anything else ERP is a platform for planning a company’s activities.  That said education has proven very successful in bridging the cultural gap for entrepreneurs that now need to learn to plan.  Two types of education are necessary.

The top management of a company needs to understand the details of the ERP System to some degree.  They need an understanding of which modules perform what function, how those modules interact, and the benefit of a module to the overall success of the organization.  Educating top management separately from mid-level managers and users has shown to be the best way to achieve this goal.  There are several reasons for this but the strongest reason is that this method allows company executives to discuss delicate company issues without fearing that the other groups might misunderstand those discussions.  Another reason is attendees can discuss the details at the appropriate level for each group.

The second type of education involves how to plan.  Any company will benefit from utilizing a formal planning system and ERP is certainly that.  Learning to effective plan the activities of procurement and operations is not a difficult task.  The largest part of the process is getting Sales, Operations and Financial people to meet for the first, second and third times.  The process usually manages itself after the third or fourth meeting.

Properly educating the company has shown to deliver unexpected benefits for organizations that create extraordinary results.  It is difficult to know the actual ROI, but APICS suggests that the ROI on education is about $3 for every $1 spent.

How long a period is required for finding and implementing a system?

There is not a simple answer to this question except to say that IT DEPENDS ENTIRELY ON THE ORGANIZATION!  I have been involved in selection and implementations that took 9 months.  I have been involved in implementations that took 9 weeks.  I also worked with organizations that took several years to implement the basics of Master Scheduling, Engineering Change Control, Inventory Management, MRP, Work Order Scheduling, with Financial Integration.  It depends completely on how committed the organization is to making the implementation its TOP PRIORITY.

Every company is different because every organization’s management team manages a company differently.  Sometimes implementing an ERP System requires changing the fundamental approaches of a company’s TOP Management or even its personnel for sundry reasons.

Usually education is the First Step in the process.  The Second Step is to clean-up (LEAN or remove the non-value added activities) associated with the company’s daily activities.  The Third Step is to identify the key business requirements of the business.  The Fourth step is to find software that can demonstrate how to support the key activities with process steps that most closely match those of the Organization.  The Fifth Step is to train to use the software.  The Sixth Step is to adjust and test the processes.  The Seventh Step is to perform the Conference Room Pilot.  With the successful completion of the Conference Room Pilot, the system is ready for use.  How long does this take?  How close to executing Step 4 is your organization?  Is Step 2 complete?  Have you performed Step 1?


Anonymous commented on 27-Apr-2012 05:36 PM
This is the perfect website for anybody who wants to find out about this topic. You realize so much its almost hard to argue with you (not that I actually would want to…HaHa). You definitely put a brand new spin on a topic that has been discussed for many
years. Excellent stuff, just great!
Anonymous commented on 01-May-2012 09:45 AM
It's amazing in support of me to have a site, which is helpful in support of my knowledge. thanks admin
Anonymous commented on 03-May-2012 08:04 PM
This is my first time go to see at here and i am truly impressed to read everthing at one place.
Anonymous commented on 05-May-2012 10:53 AM
I appreciate reading your site. Thank you so much!
Anonymous commented on 06-May-2012 10:28 PM
My family members always say that I am killing my time here at web, except I know I am getting familiarity everyday by reading such fastidious articles or reviews.
Anonymous commented on 09-May-2012 06:44 AM
Superb Webpage, Preserve the fantastic work. Thank you.
Anonymous commented on 09-May-2012 11:18 AM
Thanks for a marvelous posting! I definitely enjoyed reading it, you are a great author. I will remember to bookmark your blog and will often come back someday. I want to encourage yourself to continue your great work, have a nice weekend!
Anonymous commented on 03-Jun-2012 03:13 AM
These are in fact impressive ideas in on the topic of blogging. You have touched some good things here. Any way keep up wrinting.
Anonymous commented on 13-Jun-2012 08:05 PM
What's Going down i am new to this, I stumbled upon this I've found It absolutely useful and it has aided me out loads. I'm hoping to contribute & aid different users like its aided me. Good job.
Anonymous commented on 20-Jun-2012 08:16 AM
bookmarked!!, I love your blog!
Anonymous commented on 24-Jun-2012 06:25 PM
Way cool! Some very valid points! I appreciate you penning this post plus the rest of the website is also very good.
Anonymous commented on 25-Jun-2012 07:21 PM
After looking at a few of the articles on your website, I seriously appreciate your way of blogging. I book marked it to my bookmark site list and will be checking back in the near future.
Anonymous commented on 06-Jul-2012 04:10 AM
Hi, neat website you have got going here.
Anonymous commented on 07-Jul-2012 04:52 PM
Hi, I do think this is a great blog. I stumbledupon it ;) I will revisit yet again since i have book-marked it. Money and freedom is the best way to change, may you be rich and continue to help other people. raspberry ketones
Anonymous commented on 09-Jul-2012 02:15 PM
I was excited to discover this page. I wanted to thank you for your time for this particularly wonderful read!! I definitely enjoyed every part of it and I have you saved to fav to look at new stuff on your web site.
Anonymous commented on 12-Jul-2012 01:19 PM
After exploring a number of the blog posts on your web site, I honestly appreciate your way of blogging. I book-marked it to my bookmark webpage list and will be checking back in the near future. Please check out my website too and let me know what you
Anonymous commented on 12-Jul-2012 04:12 PM
Very good article! We are linking to this great post on our site. Keep up the good writing.
Anonymous commented on 16-Jul-2012 04:21 PM
This is a very good tip especially to those new to the blogosphere. Short but very precise info… Thanks for sharing this one. A must read post! raspberry ketone
Anonymous commented on 17-Jul-2012 03:02 PM
Nice post. I learn something totally new and challenging on blogs I stumbleupon everyday. It will always be helpful to read content from other writers and practice something from their sites. ladbrokes
Anonymous commented on 17-Jul-2012 08:28 PM
Excellent site you have here.. It’s hard to find high-quality writing like yours nowadays. I honestly appreciate people like you! Take care! ! quick loans
Anonymous commented on 20-Jul-2012 10:58 AM
An interesting discussion is definitely worth comment. I think that you need to write more on this issue. All the best!!
Anonymous commented on 27-Jul-2012 04:58 PM
Oh my goodness! Incredible article dude! Thanx!!
Anonymous commented on 29-Jul-2012 08:14 AM
I truly love your site.. Very nice colors & theme. Did you make this website yourself? Please reply back as I’m trying to create my very own blog and would love to know where you got this from or what the theme is named. Cheers! estate agents
Anonymous commented on 29-Jul-2012 08:54 PM
You actually make it appear so easy along with your presentation but I to find this topic to be really something that I feel I would by no means understand. It sort of feels too complicated and very huge for me. I'm looking ahead for your subsequent publish,
I'll try to get the hang of it!
Anonymous commented on 01-Aug-2012 08:37 PM
Aw, this was a really nice post. Finding the time and actual effort make a great article…

Post a Comment

Captcha Image

Trackback Link
Post has no trackbacks.