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About ERP Systems

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." 


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™