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About ERP Systems

Is the Glass Half-Full or Half-Empty?

Michael Roman - Wednesday, February 10, 2016

I am in the midst of a conundrum. Clients ask me to analyze, assess, and recommend changes for improvement opportunities in their company processes. My findings, at times, shock business owners and company managers.

I educated myself in the Body-of-Knowledge for my field. I trained to become a Management Consultant, tutored by the industry experts. I maintain credentials for my field (APICS Certification and now am on the APICS ECO Committee). I have been doing Management Consulting for thirty plus years. So, why are clients shocked by the findings? After all, they ask for the analysis. I muse about this conundrum daily, sometimes when I should be asleep.

I was reading a magazine recently called, Korn Ferry Briefings. An article on Optimists and Pessimists caught my eye. The article by David Berreby suggests that situationally people are either Optimistic or Pessimistic. It reminded me of a Graduate School conversation with my Major Professor, Dr. Kelly Wells. I was in the final weeks of my Masters Work, having passed my orals and written exams and was preparing to defend my thesis paper on eye blinks (we found high correlation between eye blinks and memory types).  After some discussions, Dr. Wells asked me, “Have you always been someone who sees three sides to a coin?” I said, “If you mean when someone asks me if the glass is half-full or half- empty and I reply, well, maybe the glass is just too big, then I guess so, you brought that out in me.” He smiled and rolled his eyes!

There is something at work, within the minds of clients, when I arrive on the scene. Maybe their Optimist-Pessimist tendencies appear. Maybe they see the glass as half full and my findings threaten their inner-peace. Maybe they see the glass as half-empty and my findings goes further to threaten their inner-peace. Why do people who ask for assistance become defensive when a report states, ‘improvements in these activities will contribute to the bottom line’?

Mr. Berreby’s article supports the “inside the mind” idea. Both Optimistic and Pessimistic approaches have benefits and drawbacks.  Where Optimists see the long-range benefits, Pessimists see many dangers in activities. Optimists often fail in careful planning; Pessimists often encounter analysis paralysis.  Optimists take the ‘damn the torpedoes, full speed ahead approach’ while Pessimists fear missteps. When Optimists succeed, the cost is sometimes detrimental to the organization. When Pessimists succeed, the chosen path is sometimes very stressful to those who execute the plan. Regardless of which personality type sits in the C-Suites, Management Consultants have the skill-sets and tool-sets to assist organizations pass the challenges of Change Management.

What are your thoughts?

Dream Big

Michael Roman - Monday, September 07, 2015

Here is one from the archives...

We Stopped Dreaming

The driving force that led me to become a Management Consultant was a simple idea: Dream bigger. The big moment of realization for me happened at a rather comical lunch meeting with my boss at the time, the company’s owner, who wanted to discuss a problem we had with missing shipping dates for a new customer. The Chinese restaurant where we met was a favorite of mine and not far from the plant, and my boss had reluctantly agreed to go there even though he was leery of eating “different” food, especially Asian.

We arrived just as a supply truck passed by and pulled around to the back of the restaurant. We entered the establishment, and I introduced my boss to the owner. She directed us to a quiet area not far from the kitchen, and my boss was noticeably nervous about the place. I assured him not to worry because their food was fresh and delicious. We focused in on the discussion, and I explained the engineering problem that caused the order to ship late, as well as the best way to avoid the problem in the future. Satisfied with my assessment, he acknowledged how much he appreciated my ability to get to the point quickly and explain the situation in a simple and concise fashion. He then added that my work ethic was inspirational, especially in light of the fact that I was not really a part of the “wealth stream of the business.” I asked him to explain what that meant, and he replied, “You are not family or one of the company’s lifelong friends, so you will never get to share in the wealth that we have planned for our retirement years.”

I was speechless for a moment, and then said, “I thought there was enough opportunity to include all of the company’s employees in the wealth stream”. He replied that it was simply impossible to do so, that it was his mission to ensure that this small group of stakeholders had a comfortable future.

At that moment, the server came through the kitchen door with our meal, followed by the chef who was chasing a cat with a meat clever and shouting at it in Chinese. The look on my boss’ face was priceless. He immediately arose and said, “I’m leaving. Fresh cat is not in my diet.” He headed for the door, and I stifled my laughter as I left money to pay for the meal and followed him out. The owner stopped me to apologize and explain that the cat snuck in while they were unloading supplies from the delivery truck. I told her it was okay and suggested she may want to institute a policy not to accept supplies during the lunch or dinner rush.

I was reminded of this true story a few days ago while I was watching Neil deGrasse Tyson’s videos on YouTube. It is entitled “We Stopped Dreaming Part 1” and “We Stopped Dreaming Part 2”and is worth a few minutes of your time to watch and consider. I left that company shortly after that incident, because I realized that the owner’s dreams for his company were too small to include rewards for the very people who were most responsible for his success.

Today, my goal when working with companies is to help them dream big. The odds of properly implementing an ERP System increase proportionally with the commitment of C-Level people and with dedicated involvement of the user community. As my business adviser so often and simply states, “A company can't stop dreaming. It has to take bold steps. It has to become a team with a bold mission. It cannot rest on its laurels and wait to see what everybody else does before taking a new step forward.” And he is absolutely correct!

In my opinion, the best motivator is to help everyone see a bright future. Let them know that the future is brightest when the organization unites around a common goal and all the players are doing their part to focus the company around that goal. That is what ERP systems are all about, helping people in different departments of an organization come together to manage the business better and build the business to the point that everyone can reap the rewards.

Don’t stop dreaming, and don’t let your dreams be small. Dream big, and include everybody in that dream.

 

 

 

 

 

 

Smile2

Michael Roman - Tuesday, June 30, 2015

Smile when you do that!

Recently reviewed improvement opportunities on the website and came across this blog from several years ago. It is time for a re-broadcast.

Most of our engagements are tactical. Sometimes we assist in Strategic events like an ERP System implementation or re-implementation. When we do, we understand that we are there to assist in creating a “new” cultural focus for their organization. Here is how we approach those types of very political undertakings. This approach took genesis under the direction of a dear friend while working at an ERP Software firm. What follows is Bob Green’s sacred work.

Start Every Meeting with a Smile

Smiles become contagious with time. Smiles are disarming and most often met by returned smiles as well. You never know when a smile is just what someone else needs. Bob started every conversation and meeting with a smile regardless of the point of the conversation. Even when Bob was upset with a client, a colleague, he started the conversation with a smile. Part of Bob’s success was due to his smile.

End Every Meeting with a Smile

Closing is a skill. Whether the closing is for a sale, an educational lesson, or a conversation, the most important closing activity is to have the participants feel good about the activity when it is over. Smiles go a long way to help ‘close’ the activity. Bob sometimes upset people for things he did, but seldom for what he said. That smile at the end of the conversation made you think that there might be some grain of truth in his comments.

Have People Tell People Two Things about Themselves

Manufacturing Practices holds an introductory meeting with the management and project team when we do implementation and selection projects. The meeting has three main functions.

1.       We use it to introduce the teams from our organization

2.       We use it to get to know the team from their organization

3.       We set the tone for the work that is to follow


The “I am such as such and I do whatever” speech is a standard activity when consultants work with companies. We get to know them and they get to know us. Nevertheless, that is not how we work. We have all parties tell one of their most embarrassing moments and one of their greatest accomplishments. We do our introductions and stories first. This tells the client that we are all in the “same boat,” that we will never ask them to do something we would not do ourselves, and it lets everyone understand that we intend to have ‘fun’ while we perform this very important work for their company. The advantage is that it gives us the opportunity to set the tone for what is to follow.

Appoint a Person at Each Meeting to Tell a Funny Story

At the client site, we start each meeting on a light note. At each meeting, someone is responsible for telling a funny story. It takes a few meetings for everyone to remember to do that, so we have a number of stories ready to tell in case someone forgets. Again, the point here is to have fun and not to take ourselves too seriously.

Have a Contest to Create a Funny Tag Line for the Project

This one requires the help of the management team. The company sponsors a prize for the best ‘slogan’ or "project tag line.” The rules are simple, people in the company submit the slogans to our team; we work with the management team to pick the “best” slogan. Management usually awards a “Dinner for two” certificate to the winner and we throw in a gag gift like a “Pimp my Cube” kit. 

At one company, the head of engineering won the contest with a picture from a Gary Larson cartoon. The picture was of some fish standing outside of the fish bowl that was on fire. The caption read, “Of course, you now realize, we are equally screwed!” The Head of Engineering was the only person in the organization who wanted to keep the previous software. As such, he had a little fun with the team with his tag line.

Appoint a Person to be Responsible for Taking Weekly Pictures of the Project Team as They Work, Post it in the Lunchroom and Allow People to Post Funny Comments

Everyone has fun with this one. Of course, there are rules, like no profanity, or suggestive tones. Some very funny comments appear and even management contributes to this one. One of which was of a picture of yours truly walking away after a meeting. The president of the company commented, “Here’s Mike Roman, presenting his best side to the camera.”

At each weekly Status Meeting Award a “Can Do Trophy” to the employee with the best attitude

One company warned us about working with “Coni.” Everyone said she was difficult, short tempered, and the reason she worked in Accounts Receivable was that she “liked” being mean to people. 

Coni won the attitude award every week for the 15 weeks at that company. We are still friends and she sends jokes at least once a month. Coni was a real delight! At the last meeting, whoever won the award gets to keep it. Manufacturing Practices usually sponsors this award, and we present a flashlight with the words, “Follow me” on it.

Find the humor in everything

Now, back to Bob. Bob talked about starting a consulting company when we left the software firm. Sadly, that never happened. Bob died during quintuple bypass heart surgery. He had begun to create our charter for our company.

Bob did not want the traditional funeral or remembrance ceremony after his death. Instead, we gathered outside of his favorite park in the hills just outside of Las Vegas and scattered his ashes. It was a somber affair, no wind and a little warm. Just as we began to spread his ashes, a breeze blew those ashes over every one present. Christine, Bob’s widow commented that Bob wanted everyone to take part of him home. We did, in our eyes, in our hair, on our clothes, and most importantly in our hearts. Christine’s laugh and comments made everyone else laugh as well - a nice send off for a dear friend.

 

But Your Duck is STILL DEAD

Michael Roman - Tuesday, May 19, 2015

There is a page on the Manufacturing Practices website that has been there for about five years. It tells the story of a company that called asking for an opinion about interfacing their "Job Management Tool" to an ERP System. Their goal was to use the accounting piece of that system. Here is the link: I'm Sorry But Your Duck Is Dead.

I won't drag out the issues involved, but suffice it to say that they contracted for remote custom education to help them better understand what an ERP System is and is not and what the ERP System will do for them and TO THEM. The effort was a success. The son and the feisty business owner who thought the proposal was "outrageous since I did not EVEN know their business" (his words, not mine) signed the note.

During the education, we explained why KPIs were more than Key Performance Indicators and why we refer to them as “Keeping People Involved®.” Many benefits were automatic outcomes of that education including, proper Forecasting, Forecast Error measurements, Cycle Counting efforts, On Time Shipments, Throughput Improvements, Project Management considerations, and Leadership requirements during and after the ERP Implementation. You know, those things that make manufacturing companies competitive in the marketplace instead of, “oh yes, by the way, we also make things.”

The thank you letter did not come immediately after the class; it was months after they started using that ERP System that the letter came. By sending the letter, they were saying that we truly helped make them successful.

I remember my first argument about the role of education; it came when I was a programmer at Control Data, writing an MRPII System for mini-computers. The education effort involved having other peers (programmers) review the LOGIC, produced before the code writing. What a stupid idea, I rationalized, I’ve been programming for more than 6 years, why should I have to think about what I am about to do before I do it. The ANSWER came when management asked us to write a program to put a Bill-of-Materials and put all the parts in a table arranged by Low-Level-Code.

Half of the group just wrote code for the request and half the group did it the “new way.” My program was 100+ lines of code long, which was about half way between the upper and lower number of lines of code for others in the first group. The ‘other group’, as a team, wrote the program in ten lines of code after creating the proper logic to deploy to write the code.

The real shocker really came with our tests. Where our group did not have a “successful” first run attempt with test data, the other group did. With that, both groups saw the reasoning behind management’s desire for us to think first, and only after that, act. Our “ready, fire, aim,” quickly became, “ready.., aim.., fire.” When Manufacturing Practices, suggests that companies understand what ERP is before they look for, implement or re-implement an ERP System, we teach them the lesson of “ready.., aim.., fire.”

Here is a take away. Business owners and C-Suites must constantly monitor the expense of education against an investment in their people. Businesses have no way to measure the accumulative costs of remaining complacent. However, by failing to invest in people, leaders assume absolute business risk and at best, the possible loss of any competitive advantages. As Ralph Waldo Emerson said, "The mind, once stretched by a new idea, never returns to its original dimensions." 


LIVING WITH (and Surviving) A COMLEX WORLD

Michael Roman - Wednesday, May 06, 2015
By Jerry Tiarsmith, VP Operations, Manufacturing Practices, Inc.

The way we live, work, and play describes an environment that experiences a constant state of change and reflects an ever-growing increase in complexity. These changes, or external stimuli, require each of us, individually and collectively, to react―to improvise, adapt, and overcome―on a daily basis. What is true of our personal lives also proves true in the lives of our corporations, which remain nothing more than a microcosm of society.

Corporations experience a daily state of flux and even the best run organizations suffer from entropy―a natural state of decay―or as others describe it, a “drift into failure.” Organizations, such as Operational Excellence, promote continuous improvement programs to help corporate leaders cope with the challenges presented by this increasingly complex global system, but these programs merely reflect the true challenge of our time―that we must constantly evolve in our thoughts and actions in order to survive and we need to do so in real time!

What do we mean by “complexity?” The Oxford Dictionary defines “complexity” using terms such as convolution, intricacy, involvement, but a simpler way of looking at complexity involves examination of an open-system, our inter-relationships, of the woven pattern to our lives that illustrates a myriad of interdependencies. We live in an interconnected world, more so since the advent of the internet, and one in which knowledge becomes a commodity. Today, if you have a question about almost anything, the typical response or helpful advice proffered says, “Google it!” The Knowledge-based system in which we operate today has changed the way we operate, sometimes for the better, but not always. A company failing to keep up with the modern world simply falls further behind, experiencing a more rapid “drift into failure,” and fail it must.

There can be no doubt that the corporate mindset must change in order to survive. This responsibility falls directly to the corporate leadership.

  • Complexity increases uncertainty and resistance to change, but also creates opportunities. Leadership must “get comfortable being uncomfortable!”
  • Leadership must challenge their thinking, inject innovative ideas, methods, products or services to improve performance, grow their businesses, and reverse entropy.
  • Leadership must understand and convey to all managers and employees that there are no shortcuts to success―that everyone’s actions and decisions effects their shared future.
  • Time is not your friend, instead, it remains a “wasting resource” that requires effective decision-making in “real time.”
  • Leadership must remain aware of external opportunities and be prepared to act decisively to take advantage of those opportunities as they unfold.

Manufacturing Practices, Inc., a veteran owned and veteran staffed company, has the expertise, experience, and knowledge to assist company leadership teams in developing these capabilities by exploiting the internal advantages afforded them through the optimization of their business management systems. Our consultants are APICS certified, an important distinction, in that ERP systems use the APICS Body of Knowledge (BOK) as the basis for the internal system logic. ERP systems provide the “real-time” information the leadership team requires to make effective decisions and we know ERP systems.

Save the Date!

Michael Roman - Monday, April 06, 2015

Assemble an Innovative Inventory of Business Tools and Processes

 A Three-Prong Approach to Operational Improvements

 

  

Save the date! 

You won't want to miss the opportunity to participate in this seminar that will cover multiple facets of operational excellence and efficiency for manufacturers. Presenters with various areas of expertise in working with manufacturers will share insights, tools, tips and takeaways that you can implement immediately for operational improvements. 

Mark your calendar for Thursday, May 7 and keep an eye out for more details
in the coming weeks.

 

Topics to Include:

 

Management as Leadership
Presented by John Purcell of Transform

If you've always heard that leadership and management are different, you will be interested in John's perspective that management is leadership. We'll also discuss getting results as you build relationships and why both are critical. We'll also paint a picture of what a healthy leadership team looks like.

 

Effective Accounting Processes: Grow Profits, Reduce Risks

Presented by Iliana Malinov, CPA of HLB Gross Collins, P.C.

Business leaders must continually identify opportunities to grow build upon existing profits. Often there are untapped resources and overlooked opportunities within a business that can be unleashed, creating the opportunity for increased profitability. Effective navigation of industry-specific regulations, documentation requirements, tax credits and deductions is critical for manufacturers. Improve your bottom line through some simple planning steps and available opportunities that are often overlooked.

 

Operations & Supply Chain Management
Presented by Mike Roman, CPIM of Manufacturing Practices, Inc.

Improving a company's bottom line does not happen magically. Companies earn it through smart improvements. Smart improvements come from smart people using smart technology in smart ways. ERP is smart technology and Operation Excellence fosters its smart use through KPIs (measuring results that keep people involved), and Operations and Supply Chain Management mastery which Manufacturing Practices calls planning for success. This presentation is a must see for C-Level people, interested in improving the value of their company and the value contributed by their employees.

Save the date: 

May 7, 2015

11:00 a.m.- 4:00 p.m.

At the Office of HLB Gross Collins, P.C.

More details will be forthcoming

Sponsored by:
HLB Gross Collins, P.C serves clients both locally and around the globe.    
  
  

Keep People Involved

Michael Roman - Wednesday, April 01, 2015

Keep People Involved™

Years ago, as Operations and IT Manager for a small company, I was charged with finding a consultant to help us through an improvement project. One thing we learned that was entirely counter-intuitive was how easy it was to change the corporate culture – in less than a year! The consultant implemented a process to measure individual performance within the company, and the positive transformation in the organization was truly remarkable.

The process was a deceptively simple, inexpensive, and powerful tool called Key Performance Indicators (KPI). KPI help change the way people do their jobs, approach their day, and deal with daily roadblocks. KPI help people focus on the BIG PICTURE. KPI help people distinguish the important from the trivial, the “must be done” from the “could be done”, and allow employees to set their own priorities. When the boss reviews performance charts, questions follow. People begin to learn the importance of those measures. When people focus on activities and apply what they learn from the KPI, good things happen.

KPI differ by industry; and KPI are not just for individuals.

  • Inventory Turns is a very important KPI for manufacturing and distribution companies
  • For telemarketers, the number of phones calls made is an important KPI
  • For retail, the average dollars per sale is a good KPI
  • For accounts payable departments, the number of AP Days outstanding is important
  • For accounts receivable departments, the number of AR Days outstanding is important
  • For managers, employee turnover is an important KPI

Using KPI reaps great rewards, and the secret lies in its focus on the business scorecard activities of revenue, costs, and cash.

Displaying KPI results is a vital part of the process. For example, some companies post the results of inventory accuracy counts with several positive results: 

  1. People understand that the activity is an important company function
  2. People take pride in their work, because everyone knows how they are measured
  3. KPI provide a level of control that is not apparent when those values are not measured

During our implementation, everyone including the president had KPI, and we posted performance to those KPI. The fact that the “person at the top” reported measurements had a unifying effect on the entire company. We all understood that everyone had a role to play and our measurement criteria. Everyone did! We felt that since the “BIG GUY” showed us his, we would show him ours, and we accepted the fact that things were changing. We wanted to join the crowd; consequently, the corporate culture changed almost overnight.

KPIs reflect the performance to company policy. The easiest way to implement KPI is to start slowly. Choose a couple of performance measurements that are important to your industry and make sure that they produce the desired outcome. You can always add additional KPIs after this simple tool demonstrates its value. The most important idea to remember about KPI is that they Keep People Involved™

Q and A with Mike and Jerry

Michael Roman - Thursday, March 19, 2015

A few weeks ago, Jerry Tiarsmith, VP of Operations at Manufacturing Practices, Inc. and I sat down for a Q&A session.

Q. Mike, Manufacturing Practices, Inc. (MPI) recently had its 10th anniversary. What were the reasons for initially forming the company?

I saw a number of fundamental flaws in the manner that ERP Software companies sold their products. Their strength is that they explain what ERP Systems will do FOR companies. The major flaw is that ERP Software companies do not explain what ERP Systems will do TO companies. Manufacturing Practices, Inc. (MPI) explains to companies what ERP software will do both FOR and TO a company, how to use the ERP tool to manage the organization, and helps clients integrate their ERP System INTO the business. A recent client found success with our efforts and in gratitude, wrote the Preface to our book, The Turnaround.

Q. We often learn from our mistakes – what do you consider to be your biggest mistake and what did you learn from it?

I have made several mistakes, some from ignorance, some from omissions, and some for being unable to “reach” clients. It is hard NOT to make mistakes from ignorance but those are rectifiable. It is forgivable to make mistakes from omissions and those too are rectifiable. Nevertheless, I take being unable to reach people as a weakness in me. To counter that short-coming, I stay current with the consulting industry, with the Supply Chain and Operations Management Body of Knowledge, and have weekly conferences with clients to assess progress, address issues, and to ensure we are all in agreement with the course we are taking.

Q. On the other hand, what do you consider to be your greatest success and why?

This might sound strange, but the greatest pride comes, not from the successes that the owners or the C-Level teams achieve, but from the people that do the grunt work for these clients, their employees. Walking through a plant, seeing the benefits of everyone’s hard work, and hearing those machine operators, inventory people, production people, planners, buyers, and supervisors, say, “Mike we really did something wonderful, didn’t we?”, fills me with pride. A great satisfaction is that they helped their organization improve, and they now know how to create a project and continue to improve the company’s profits and reduce the stresses associated with performing their day-to-day activities.

Q. How long have you been involved with APICS, in what capacity and why should that be important to your clients?

I have been ‘involved’ with APICS since 1981. I have been a member of APICS since 1984. In those 30+ years, I served as a chapter member, a member of the chapter’s management team, as President of the Chapter (Atlanta), and as an instructor for the Body-of-Knowledge (BOK). I also served as a member of the team that helped create the ‘awareness’ of a missing piece of the BOK, the Basics of Supply Chain Management. I now serve as a writer of the test questions used on the certification exams (my second committee). I feel honored to have been able to serve this group of professionals. More importantly, I am thankful for being able to sit at the feet of the founders and BOK developers like George Plossl, Hank Jordan, Don Frank, James Cox, and Eliyahu M. Goldratt and the Oli Wight organization. It is said that you only get out of an organization what you put into it. That is not a correct statement. The opportunities I received from my association with these giants and the APICS organization pale in comparison to what I have learned and can share with my clients.

Q. How have your relationships with such industry giants as Oliver Wight organization, George Plossl, and Eliyahu (Eli) M. Goldratt, among others helped shape your approaches to consulting?

Though I never met Oli Wight, who died in 1983, I have had dealings with his organization. In my opinion, they are probably the best education company with whom, I have ever had the pleasure of doing business. They are superb at creating an understanding of what business management systems are all about. I model my classes along their successful approach path.

My relationship with George Plossl was very different. George was a consultant’s consultant. George was a contributor to the APICS BOK and to the development of the APICS Society as well. I was fortunate to have George as a mentor for a number of years. During tenure and as President of the Atlanta APICS Chapter, we did a roast of George, recorder the experience for them, and George and his wife Marion both told me it was the “highlight” of George’s career. A comedian and double-talker presented himself as a protégé of George from early in his career. Attendees at the event were actually rolling on the floor with laughter. George helped me to understand that the APICS BOK is what is created in ERP Software. George also helped me with my first “successful” implementation, in 1989. His business partner, Don Frank started that mentoring process and introduced me to George.  Don and I were developing a textbook and an ERP Seminar when he died, in 2004. I am still unable to finish the book and the seminar. Regardless, Don was one of those mentors that saw more promise in me than I did.

Dr. Goldratt (Eli) was a challenger. It seemed that he took delight in making me feel uncomfortable and comfortable at the same time. In one sentence, he could both challenge and complement me and he did several times. A sentence he said, drove me to write the ERP book, The Turnaround. He said to me, to paraphrase, ‘you have a lot of knowledge in you. Just when are you going to get off your lazy butt and show someone what you got?’ Unfortunately, I missed completing the book before he died. Now, procrastination is a pet peeve, something that, at times, puts a sharp edge to my dealings with customers who also procrastinate. 

Hank Jordan taught the art of Inventory Management and tempted me to become a consultant before I thought I was ready. Neville May, worked with me to understand MAPICS, an IBM mrp system. There were also mentors who taught operations and supply chain management when I worked in their facilities, early in my career.

I am fortunate to also have had family-member mentors. My father and his father (both Ford Motor Company employees) were my earliest mentors. Both taught the art of question asking, a very necessary characteristic for a consultant.

These mentors formed me into what is necessary helps others succeed. They paved the road to help me understand what I know. I believe this is my strength as a consultant. By the way, I hate the word consultant. It implies something that is not true. People think that consultants are ‘experts’ that have the right answers. These giants taught me that that is a fallacy. These hero/mentors taught that consultants have the right questions. That is why my title is “Business Capabilities Architect.” 

Manufacturing and National Security

Michael Roman - Wednesday, December 24, 2014

By Jerry Tiarsmith, VP Operations, Manufacturing Practices, Inc.


I read an interesting article. It noted that for the first time China’s Gross Domestic Production (GDP) exceeded that of the United Sates. My strategic interest in China began in the mid-1970s. At that time, China ranked amongst the poorest of the world’s nations, but I believed then that China, a “sleeping dragon,” would emerge as a formidable foe in the near future.

 

China forcefully declared its interest in territorial expansion and regional dominance in 1979 when it invaded Vietnam. Despite overwhelming military superiority, the Chinese achieved little. If nothing else, the conflict highlighted problems in Chinese manufacturing: a lack of standardization, poor quality control, and little understanding of logistics, just to name a few. The Chinese worked hard to correct those problems. Since then, Chinese military technologies and capabilities have dramatically improved.

 

Today, Chinese companies account for three of the world’s top ten companies by annual revenue. In contrast, only Wal-Mart (2nd) and Exxon (5th) represent the US in that group. In 2007, GM led the list, once dominated by the likes of IBM, GM, and Ford. Apple, the technology darling, occupies the 16th position while GM slipped to number 23. Regarding trade, the US imports more than four times the goods from China than it exports. This generates a tremendous trade imbalance favoring China. China also holds more than $1.23T in US debt obligations on which it collects significant interest payments. These hard currency flows from the US help fuel China’s growth and tend to diminish US domestic growth.

 

Other reports note a slow-down in China’s growth rate from a 40-year average of 8% to 7.3%. America’s recent growth rate remains slightly above 2%. If these numbers continue, what could we expect in the next forty years? Using simple analytics (i.e.; the Rule of 72), we extrapolate trends that show China’s economy potentially doubling every ten years over the next forty years while the US economy doubles only once in that same time frame. That means that by the year 2054 the Chinese GDP could approach $240T, greatly dwarfing that of the United States at $30T.

 

While an unsavory thought for many, China already wages war against the United States. A war fought in the realm of intellectual property, on the battlefield of economics and in cyberspace, and one that the US is losing! Some wounds appear self-inflicted. American manufacturing suffers, in part, from poorly conceived governmental policies regarding taxation, trade, regulation, and education. As a result of those policies, the US hollowed out its manufacturing sector over the past forty (or more) years, businesses increased off-shoring activities, neglected the domestic development of critical skills and tradecrafts, and struggled under costly government-mandated burdens. American manufacturing became less competitive. This must change!

 

At Manufacturing Practices, Inc., we witnessed illiterate, low-wage Chinese workers taking great pride in the aesthetic quality of the work they produced. Their work ethic, enthusiasm, and dedication prove commendable. One only has to recall the mass choreographies of the Beijing Olympics; precision performances by thousands designed to impress (and, perhaps intimidate) the world. These performances proclaimed China’s arrival as a major force on the world’s stage, one that includes industrial production. China uses American universities to help educate the next generation of Chinese computer literate, techno-savvy, and highly competitive minded business leaders, the same ones who will ensure China’s global economic dominance, a position once enjoyed by the United States. Americans must relearn the lesson that a strong manufacturing base makes for a stronger, healthier economy and a wealthier, more productive middle class.

 

This is one reason why Manufacturing Practices, Inc. assists small- to mid-sized manufacturing and distribution companies. Our proprietary processes help C-level management understand and access the hidden value in their ERP systems. We help clients unlock the ability to enhance the speed and efficacy of management decision-making through better use of their ERP system. Our proven methods enable management to implement continuous improvement programs that refine processes, improve procedures, and empower employees through Lean and other methodologies. As a result, our clients gain a significant competitive advantage, leading to increased revenue growth, improved cash flow, and significant cost reductions. We believe that Operational Excellence comes first from an effective implementation and deployment of a business management system. We remain committed to our clients’ successes. This has been the hallmark of our company since its inception.


What Worries Manufacturing Executives

Michael Roman - Tuesday, October 28, 2014

Companies worry about shop floor throughput but change shop schedules before completing them.  Companies do not properly define specifications for suppliers but worry about supplier quality.  Companies miss customer shipment dates because they misunderstand shop floor loading concepts. 

All of these are disturbing events.  However, something more disturbing is happening in the majority of small and mid-sized manufacturing that is correctable with minimal disruption and chaos.  This “disturbing thing” costs companies millions of dollars annually.  This “disturbing thing” is the misunderstanding of the proper use of an ERP system. 

This misunderstanding, leads to the major issue that causes companies to fail in the ERP implementation process.  Research published by firms like KPMG, the Standish Group, and others shows that 61% of companies fail in properly facing the challenges of the work before them.  Moreover, the results are costly. 

ERP Implementations commonly fail to deliver the anticipated benefits and requested services; these projects have huge cost over runs; projects fail to meet implementation schedules, and worst of all, some companies abandon the ERP project altogether.  It takes little effort to prepare properly for the ERP system implementation.

The most important effort to thwart this problem is the commitment and leadership from the C-Level team to create necessary expectations for the company.  This means that the leadership of the company has to understand ERP, develop the implementation criteria and commitment to provide hands-on oversight of the ERP system deployment with the user community.

Education about what ERP is and what it will do both for and to an organization is necessary at both executive and user levels.  It creates a common understanding of what is necessary when companies use an ERP system. 

Something else many companies miss is the benefits and understanding of the application of Lean Thinking.  Such a philosophy assists organizations in creating processes that are clean, efficient, and self-sustaining.

The last activity to aid an implementation is a proper project management activity.  This keeps the project on track. 

Failure to follow these simple tasks costs manufacturers more in money, productivity, throughput, customer satisfaction, and worker morale than all other problems manufacturing executives spend their time in daily worries and battles.

Manufacturing Practices, Inc. is a Management Consulting firm that works with small and mid-sized manufacturing organizations.  ERP Systems that C-Level teams use confidently to make important business decisions is the product that Manufacturing Practices delivers to these organizations.   

Our proprietary processes give organizations a common understanding of ERP System capabilities.  Our proprietary processes educate C-Level and users teams independently to understand what ERP Systems will do both to and for an organization.  Our proprietary processes create users that understand why ERP data needs to be timely, accurate, and complete.  Our proprietary processes make ERP Systems key to organizations’ success.