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About ERP Systems

COMPLACENCY KILLS

Michael Roman - Tuesday, January 27, 2015

COMPLACENCY KILLS  by Jerry Tiarsmith, VP Operations, Manufacturing Practices, Inc.

Complacency kills; a simple but true statement. One writer described complacency as “the enemy of intelligence.” The typical definition of complacency (a noun) often includes words such as a feeling of satisfaction or security, unaware of some potential danger, defect, or the like. My guess is that most manufacturing executives would not describe their business using the word complacency or complacent (an adjective). They are, after all, hardworking, caring, and concerned individuals trying to do right by their employees and families. We get it, we really do!

Are some company management teams complacent? Yes! Do they recognize the fact? Not some we see. So how do companies exhibit complacent tendencies? One of the best indicators is when a CEO acknowledges the company’s process problems and then dismisses any concerns with the statement, “But, we are making a profit!” On consulting engagements, we often hear CEOs and senior managers using the term, “tribal knowledge,” and doing so proudly. That makes us cringe. “Tribal knowledge” highlights a process, or design flaw, and maybe both! It indicates a probable out of control process. The resulting variations create an inability to calculate accurate product costs. At the very least, a reliance on “tribal knowledge” exposes a company to unnecessary risk and creates a competitive advantage for “the other guy.” By allowing front-line “tribal knowledge” to persist, a CEO (and his management team) remains complacent regarding the bottom line – just because they are “still making money.”

Another form of complacency involves companies that become reliant upon the use of technology in lieu of standard Operations and Supply Chain Management training & education. Creating additional work for employees, without enriching the work (i.e., gaining user buy-in), creates a complacent and demoralized workforce. Far from empowering employees, wrongly depending upon technology helps create or reinforces the impression of distrust. If employees are smart enough to figure out how to work around incomplete or ineffective processes and design flaws, they are smart enough to train to do the job you ask of them and to do it well. Good pay and benefits are a poor substitute for increased responsibility and participatory decision-making. Those ought to exist as employee satisfaction and engagement processes.

Manufacturing Practices, Inc. consultants assist small- to mid-sized manufacturing and distribution companies to unlock unrealized value in their businesses through the effective use of their Enterprise Resource Planning (ERP) system. We also see how complacency negatively affects ERP systems. Much like any business management system, garbage in, means garbage out, and ERP systems prove no different. As an example, failure to input an accurate Bill of Materials (BOM) to the ERP system results in a system that can do little to produce meaningful reports to help management make effective procurement and production decisions. The mere installation of an ERP system does not guarantee an improved decision-making process. It takes time and commitment throughout the organization to enter complete and correct data and transaction information. Technology does not replace the human factor, judgment, nor common sense. An ERP system is not an autopilot, a plug and play app, or a default management decision-making system. It is a management decision-making support system, a very capable tool when combined with proper understanding and deployment. Successful Management Teams create it upon the groundwork of Operations and Supply Chain education and procedure based ERP training. Such a deployment almost guarantees its proper use.

Complacency kills! Root it out of your business to improve your competitiveness and bottom line. Manufacturing Practices, Inc. can show you the way! 

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