Two years ago, I wrote a blog about working smarter and harder (READ THE BLOG). At that time, the economy was in the dumps, gas was approaching $4 per gallon ($US), unemployment was in double digits, and the economic outlook was grim. My suggestion in the blog for improving bottom lines in manufacturing operations was to improve their use of the ERP Systems. Late last week, I heard a report on Public Radio that the real unemployment today is above 17%. Gas is still high ($3.35 for low grade blended fuel in Atlanta), and the economy does not seem to be picking up with any apparent speed. Small and midsized manufacturing companies (my focus) continue to struggle. They are still looking for help, and they still need to improve their bottom lines.
Recently, I read a report by Simon Macpherson, Senior Director Operations, Kronos EMEA (READ THE REPORT) that mentions that managing people is a big concern for a number of manufacturers. It makes sense; manage the people, and manage the processes. Those activities have the effect of making improvements, which improves the bottom line. I liked the report and Tweeted a recommendation to followers to read it. Surprisingly, it mirrors my blog from two years ago, but it has a tighter focus on managing the people in the company. I would expect that from an operations man who works for a company that sells workforce management solutions. His report did an excellent job, and in my opinion, he made his points very well.
My work for the past 20+ years has been helping companies focus themselves on properly deploying another type of management tool – specifically ERP Systems, the toolsets that manage businesses. Like the proverbial blind men describing an elephant by touching different parts of the animal, Mr. Macpherson and I are describing a different part of the same creature; EXCEPT my work manages the workforce AND the organization.
So, what’s my point? The short answer is the same old song and dance; that is, focus the organization on properly using the ERP System, and profits will follow. Our formula to achieve that effect is simple. We start with education, which explains what the ERP System is and is not. Education clarifies what the ERP System will do for your organization and to your organization. Our education includes both management and other company personnel, though not at the same time.
After education, our next step helps the organization remove the non-value added activities from their processes. We call that implementing LEAN, and that occurs both in the shop AND throughout the organization. As that occurs, the processes that still take place add value to the organization.
The next step is to complete the ERP implementation, during which time we identify the KPIs that management wants to use to measure success throughout the organization. Defining the KPIs is a critical step in process, because it measures how use of the system contributes to the success of the organization.
A more detail explanation of our process exists in our blogs and on our website. If you want experienced, professional help in finding the right way to implement or re-implement an ERP System, just ask. Even in difficult economic conditions, you can still improve your bottom line.