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About ERP Systems

ERPOrchestrationII

Michael Roman - Wednesday, January 13, 2016

Re-introduced from an old blog…

A long, long time ago, William Congreve, in The Mourning Bride, (1697) wrote:

Musick has Charms to sooth a savage Breast,
To soften Rocks, or bend a knotted Oak.
I've read, that things inanimate have mov'd,
And, as with living Souls, have been inform'd,
By Magick Numbers and persuasive Sound.
What then am I? Am I more senseless grown
Than Trees, or Flint? O force of constant Woe!
'Tis not in Harmony to calm my Griefs.
Anselmo sleeps, and is at Peace; last Night
The silent Tomb receiv'd the good Old King;
He and his Sorrows now are safely lodg'd
Within its cold, but hospitable Bosom.
Why am not I at Peace?

Three hundred and fifteen years after their penning, these soulful, pleading words have application today, even in consulting work.  I frequently work with small and mid-sized manufacturing and distribution organizations facing the lack of “Harmony to calm my (their) Griefs.”  I hear less poetic words from company owners and managers who are attempting to re-implement a business management system, but the sentiment is the same: Why am not I at Peace?

In my never-ending search to find the best way to describe the challenges of any ERP implementations, I have used comparisons as obscure and varied as death and dying or growing tomatoes. What would a successful stress-free implementation look like? My business adviser suggested we needed a better way to paint that picture, something that explains how there can be synergy and harmony among all the players. A couple of days later, when I was discussing analogies with a colleague of mine, I digressed by talking about the fact that when we weren’t fighting, my brother and I enjoyed a remarkable harmony when we played musical instruments together.

At an early age, when we were not fighting in the back yard, my brother Dan and I learned to play musical instruments. We practiced hard, and it did not take long for us to become skilled enough to play duets at the yearly church festival. Those duets were very intricate works, arranged by our father, and the experience taught Dan and me a lesson about how important learning your individual part is to the success of the group as a whole. Unlike playing in a band or an orchestra, having only two of us in the group meant there was no place to hide if one of us hit a dissonant note. Of course, even during an orchestral performance, a good conductor will recognize who hit the dissonant note. The lesson here is that, in any organization, everyone should learn, practice and perform their part without introducing dissonance into the mix of work. When we played well together, my brother and I found a peaceful harmony that was a sharp contrast to our tussles in the back yard. We made beautiful music.

Unfortunately, we don’t see that very often in many small and mid-size manufacturing operations. Dominant personalities (the squeaky wheel gets the oil), tend to rule the workplace, which leads to more disharmony through the organization.  What an organization facing that kind of challenge needs are:

  1. Leadership
  2. A business management tool that provides the leadership team with “state of the union” information

An ERP System is that proper business management tool, but just as an orchestra needs a good conductor, a properly managed ERP implementation needs a strong and capable leader, a conductor with a good ear who can identify where the dissonance originates. The orchestra conductor orchestrates playing of the notes, and at what tempo or volume. Likewise, the business owner needs to make sure his “musicians” are all well-informed, proficient with their “instruments,” and working in harmony with other departments and individuals in the organization.  The ERP System represents the notes on the sheet music.  Just as musicians play the notes written on the musical score, company employees must understand the roles defined by the ERP System, under the leadership of the conductor.

The benefits of a harmonious ERP system are numerous. Some of the specific successes I have witnessed include reducing the quote process time; increasing inventory turns; increasing plant throughput;  reducing the quote-to-cash cycle time; increasing percent-fill on customer shipments; and increasing the on-time customer shipments. In a properly implemented business management system, even the time given to creating management reports is reduced, simply because all the pieces are in place to get the reports directly from the ERP system instead of creating spreadsheets that pull data from various and independent sources into a reporting scheme.

So think of your organization as an orchestra, and know that regardless of personalities, internal squabbles, or tussles in the backyard, a well-orchestrated operation will flourish as long as leadership keeps everyone focused on their individual assignments and roots out any dissonance before it ruins the performance.

 

What Makes a Good Client?

Michael Roman - Wednesday, September 30, 2015

By Jerry Tiarsmith, VP Operations

I have three rules: Do the right thing, do the best you can, and always show people that you care.

 -  Lou Holtz 

Earlier this month, Mike and I went to a potential client site. During discussions with Mike, the company president said he read Mike’s comments on ITToolbox and a recent blog I wrote. That blog was, “ What makes a Good Consultant”.  We were eager to do our look around to learn whether we could help.

Our no-fee Gemba Walk took several hours and initial assessment findings coincided with the president’s undisclosed beliefs. The president then hired us to present a five-day ERP education program to the management team. Additionally, we held two days of informal education for employees to explain the importance of an ERP system implementation and their involvement. Clients who see education as the critical first step to improve operations excellence for their organization enjoy greater success. 

C-Suite commitment helps increase employee engagement as a basic rule.  This company’s employees enjoy that level of support. Initial skepticism quickly gave way to active involvement early in the education process. 

  • On day two, the group asked questions, clarified concepts, and began to speak a common language 
  • On day three, they challenged us and engaged one another non-stop for more than 45 minutes 
  • On day four, the team shared process improvement ideas and redefined their roles and responsibilities 

We discussed Policies, Processes, and Procedures as well as performance metrics on the fifth day. At Manufacturing Practices, Inc., we use the expression Keeping People Involved™ when addressing Key Performance Indicators (KPIs) and this management team really understands that. 

 As part of the Keeping People Involved™ presentation, I introduced the Lou Holtz quote. It generated significant and impactful discussions. The management team whole-hardheartedly adopted itMore importantly, the company president reiterated it at each employee session! 

As a veteran owned and veteran staffed organization, we continue to support those we work with; only now, we call them successful clients! 

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.

 

 

 

 

 

 

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.

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.” 

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.   

ERP & LEAN

Michael Roman - Wednesday, October 15, 2014

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

Proponents of LEAN processes often seem at competitive odds with those who support the use of Enterprise Resource Planning (ERP) systems. While we at Manufacturing Practices, Inc. (MPI), favor the use of ERP systems by our clients, we also recommend complementary LEAN processes to effect discreet process improvements where needed.

LEAN processes improvements differ dramatically from ERP system deployments. Lower level management personnel and frontline supervisors typically conceive and execute LEAN projects.  LEAN processes most often focus on small scale, tactical process improvement to eliminate various forms of waste from that process. More than just a process, an ERP system acts as an important management decision support system that holistically integrates key corporate functions. This integration helps reduce internal communication barriers, enhance cross-functional management awareness, and speed the management decision-time cycle process to provide a competitive advantage.

The assorted benefits of incorporating LEAN processes within an ERP system deployment prove important, but empowering employees to support needed change and pursue continuous improvements to productivity are priceless. We see ERP as the “Go To” System when making decisions about resources (labor, cash, materials) necessary to run the organization.  We depend on ERP to determine which monetary investments will deliver the biggest bang for the buck.  ERP also helps us understand which markets need a focused sales campaign and where to position inventory for better customer service.

One cannot simply describe ERP systems as a process methodology. In effect, ERP systems connect the strategic vision and business planning of the corporate executive team to the execution of the planned production processes and to the control systems on the factory floor. 

Ready to convert your legacy data?

Michael Roman - Tuesday, July 08, 2014

Ok.  You educated the company about what an ERP System is and is not.  Everyone now knows the difference between a Master Schedule and a Master Production Schedule.  They have reviewed and addressed the non-value added activities in their processes.  They used those processes to define a set of vendor scripts and the company found the best fit for those new processes from a list of potential ERP vendors.  The contracts are signed the kick-off meeting is over and user training is finished.  Now you can convert your legacy data.  Is that correct?  Well, maybe not.

Have you cleaned up that legacy data?  How many part numbers do you have for a 12” by ½” Standard Thread Bolt?  You hope that there is only one per material type.  Nevertheless, there is also Part 11205 - 12” by 0.5” Standard Thread Bolt.  There is also Part 1205 - 12” x 0.5” Bolt with Standard Threads and also Part 112005 -  twelve inch x ½ inch standard thread steel bolt.  You also looked at your vendor list and you see Jones Plumbing and Supply, Jones Plumbing, Jones Plumbing Supplies, and Jones Supplies.  Strangely, they all have very similar addresses like 1225 Oak, 1225 Oak Street, and 1225 Oak St.  You find some of the same problems in your vendors.  You check the AP Terms and see a Net 10, a Net 10%.  Do you still think it is time to convert your data?  Where else should you look?

You can ignore those problems and choose the one Part, Vendor, or Customer most often used, but what happens if there are balances for some of those abandoned items?  Say Part 1205 has 12000 on hand, Part 11205 has 400 on hand, and Part 112005 has 400000 on hand.  You must not forget you are you are using last cost, and each of those Parts has a different inventory value.  What if there is an AR balance for a customer with three names but the same entity?  Alternatively, what if there are open balances for the same Supplier with three different names?  Do you still think it is time to convert data?  How will you be able to compare inventory values after the conversion to insure data integrity?

That is not an easy question to address and if you ask an accountant they will likely say compare the inventory value between the old and new systems.  So are you going to bring those problems into the new ERP System?  That may be ill advised.  What do you do?  Currently there are not a lot of tools available to remove data duplication for these types of problems.  Often times, companies accomplish control through a set of manual standards. 

We had this problem at a company and quickly addressed the problem for the parts file by creating a description definition template.  The client had 30 Engineers in the company and each was responsible for product development.  Our implementation time line did not allow time to spend attempting to reach consensus in that effort, so the VP of Manufacturing made a command decision.  He defined by material type for our source materials (steel, titanium, aluminum, etc.) and by function, bolt, screw, washer, nuts, etc.

We also created a set of database rules that looked at how we defined supplier and vendor addresses and applied processing rules to not allow ST, St, ST, St., Ave, AVE, etc, etc., ETC, ETC.  We spent a good portion of the conversion effort creating those database rules and new screens.  Continuity moving forward was our goal and besides, we had a huge number of Bills-of-Material that needed changing to remove the old parts and use only one version of those parts moving forward.  This whole effort required much more time on the schedule than the original implementation plan had.  Nevertheless, the company management felt that it was time well spent.

How has your organization addressed this issue?  What have you done to clean-up legacy data during the conversion process?