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About ERP Systems

Future Manufacturers of America?

Michael Roman - Monday, April 04, 2011

I recently read a blog from Brig. Gen. Robert E. Mansfield Jr., USAF (Ret.).  It stirred my creative juices.  What I found in General Mansfield’s blog should be of interest to Mom and Pop manufacturing shops, mid-sized manufacturing organizations and the bigger manufacturing giants as well.  His idea was a suggestion to create a program for youth that educates them about manufacturing.  He suggests forming a group much like the Future Farmers of America that brings the benefits of a manufacturing career into the spotlight for American young.  Here is a link to the blog Exciting American Youth about Manufacturing.

What a great idea.  As well as exposing our youth to career opportunities, like Engineering, Accounting, and Operations, it could educate them in the role of Operations and Supply Chain Management and expose them to the ideas espoused by APICS – the Organization for Operations Management.  It could expose them to the benefits of Quality Management systems like Six Sigma and Total Quality Management.  It could expose them to the operational efficiencies found in the LEAN Manufacturing approach.  It could expose them to the ideas of managing plant floor constraints like the Eli Goldratt strategy called Theory of Constraints (TOC).  It could expose them to properly managing the enterprise with business management systems like the Business Management Systems called Enterprise Resource Planning (ERP).   

These are all very important things for people involved in manufacturing to understand and to learn.  I hope that by learning what these tools do, our youth will learn when and why to deploy them.  Nevertheless, as important as these tools are, there are things that are more important for our youth to embrace and understand.  In my humble opinion, the most important thing that this group can teach our youth is leadership.

Some say that leaders are born and not made but I say, nay, nay, nay.  I believe that what is “born” in an individual is the desire to succeed and that the desire to succeed exists in all people.  I also believe that some people “learn” not to succeed.  Such negative activities extinguish the thirst for success in some people. 

Now, I am ready to explain why these comments appear in my “About ERP” blog.

ERP gets a bad rap, and maybe justifiable so.  Many companies attempt to implement ERP Systems and a large percent of these attempts do not create the expected results.  Some companies realize  some benefits.  When these companies compare the benefits to the cost, they do not feel that “the juice is worth the squeeze”.  Maybe too many horror stories exist in the media about failed implementations, poor execution attempts, etc., etc., etc.

It is my firm belief that we can teach these young people the right way.  These things define the “right way” in my book.

  1. Commit to such a project to guarantee success
  2. Educate the workforce to understand what is necessary to deploy and use ERP Systems
  3. Engage the user community’s proper involvement
  4. Guide and encourage the user community during the process

These four principles are the qualities of leaders and I know for fact that people are open to understanding, using, and deploying these principles.  

Leaders and Managers

Michael Roman - Monday, March 28, 2011

ERP System implementation does not appear to be very easy to do.  There has been a lot of research on why and I have written a lot on the topic.  Regardless, management must accept responsibility for the ERP System implementation failure.  Real leaders do not allow people to fail (without a recovery plan).  Moreover, there appears to be some huge distinctions between being a leader and being a manager.

Business literature is full of distinctions that some very smart people make between a manager and a leader.  I read a bit of business literature, it tends to relax me and help me think.  Over the past several years, I have collected a number of business “thought leaders” comments and documented some of the more important ideas they present (“more important” by my humble definition).  Here are some of those with a link to their book.

 

  • “…Leaders are concerned with what things mean to people. Managers are concerned about how things get done.”Abraham Zaleznik
  • “Leaders are the architects…Managers are the builders.” – John Mariotti
  • “Management is getting people to do what needs to be done. Leadership is getting people to want to do what needs to be done. Managers push. Leaders pull. Managers command. Leaders communicate.” – Warren Bennis
  • “Management is coping with complexity; leadership is coping with change” – John P. Kotter
  •  “Leadership has about it a kinesthetic feel, a sense of movement. Management is about ‘handling’ things, about maintaining order, about organization and control.” – Kouzes and Posner
  • “Leadership is communicating to people their worth and potential so clearly that they come to see it in themselves.” – Stephen Covey
  • “Management is nothing more than motivating other people.” – Lee Iacocca  YouTube
  • “A great leader has two key qualities. He knows where he wants to go; he’s able to persuade others to go with him.” – Ted Turner 
  •  “The first responsibility of a leader is to define reality.  The last is to say thank you. In between, the leader is a servant.” – Max DePree
  • Management is doing things right; Leadership is doing the right things. - Peter Drucker

Managers are important for a company; but leaders providing leadership are vital.

Nothing improves a company better than ensuring the basics are being performed as efficiently as possible...

Michael Roman - Monday, March 21, 2011

For the past several days, I have had an opportunity to review material for one of APICS CPIM certification areas - The Basics of Supply Chain Management.  That course uses the APICS dictionary, the Exam Content manual and reference materials for the course subject matter.  As part of my responsibilities, I reviewed one of the primary texts from a 50k foot level (Introduction to Materials Management by J.R. Tony Arnold, Stephen N. Chapman, and Lloyd M. Clive).  During the process, a thought struck me.  If I was one of the C-level people in a manufacturing company, this book would be in the company’s library and it would be required reading for anyone wanting to hold a management position in my company.  Passing the APICS BSCM certification exam would be a requirement for them to demonstrate their understanding of the basis of supply chain and operation management concepts. 

There are several reasons why I think this way:

  1. Most manufacturing organizations plan and procure raw materials, schedule and work the material in some fashion, store material, supplies, and finished goods, distribute these materials, and ensure customer orders are produced in the most efficient manner possible, and available when the customer requires them.   This book discusses the “best way” to perform those activities.
  2. The book presents information in an organized fashion and at a high enough level for most people to understand without becoming lost in the details.
  3.  I was part of a team that used the first edition of this text to teach many manufacturing companies the principles of operations and supply chain management before it was an offering of APICS. 
  4. I could not find a better book on this subject and have yet to find a better offering.
  5. The text discusses almost everything that an ERP System manages, (at least for manufacturing and distribution organizations).
  6. This book would serve an enterprise well as an ERP education tool for both management and users.

I had forgotten the value of the book.  Why did that happen?  I was part of a team that began using this book when it was in its first edition, 20 years ago.  I use it when I work with customers and suggest they buy it as a reference guide for themselves, especially when we have issues that take longer to address than they should.  Maybe, like my customers, I sometimes get so deep into the jungle I cannot see the forest because the trees get in the way.  Maybe the events like this past weekend are a good opportunity for me to ‘renew’ my familiarity with this topic and to breathe new life into such a crusade.

This past weekend was quite a wakeup call for me.  It gave me an opportunity to see this body of knowledge again in a different light.  It also suggests that maybe we should all review our workplaces to see whether we are performing the basics in the most efficient manner.  That was the subject of our activities this past weekend, i.e., do we present the Basics of Supply Chain management in an effective manner?  APICS reviews the effectiveness of the material & processes a regular basis and I am suggesting that other organizations ought to do the same.   Nothing improves an organization better than ensuring that the basics are executing in the most efficient manner possible.  Does your organization review itself on a regular basis?  If so, what tools and processes does your company use?

Working Smarter and Harder

Michael Roman - Sunday, March 13, 2011

Just as profits for manufacturing and distribution organizations began to increase, the cost of heating, shipping, and fuel threaten to wipe out the gains.  The impact on the heart and soul of American Manufacturing, the family owned, small and mid-sized manufacturers are again the hardest hit by the increase in fuel costs.  Shipping costs have more than doubled.  It now costs twice as much to ship half the weight of the loads as it did prior to January 2011.

Looking forward, the cost of fuel will continue to rise well into summer, and exceed $4.00 per gallon according to the short-term energy outlook - http://www.eia.doe.gov/steo/ .  The same article predicts an increase in the use of electricity, which probably means an increase in costs there as well.

The rise in costs of fuel and shipping will continue and will continue to squeeze the largest part of the US economy, the small and mid-sized manufacturing and distribution family owned businesses. 

So, how are the majority of companies to cope with the continued pressures of making do with less?  They will have to work smarter AND harder.  So, how do they work smarter?

Manufacturing Practices answers this very question.  The focus of the organizations is to educate small and mid-sized organizations and it works wonderfully.  We educate an organization in Operations and Supply Chain fundamentals.  We education an organization about what ERP Systems do for the enterprise and what ERP Systems do to an enterprise.  We educate enterprises in managing the shop floor.  We educate organizations to better utilize their current ERP System.

When education takes root in an organization, the pay back is short in coming and continues for many years.  It is much like the effects of a Tsunami.  A small amount of movement deep in the roots causes a large wave of prosperity to flow through the organization. 

This is what happened when I was a materials manager for a family owned manufacturing organization.  The company management went through a full week of ERP education.  We then selected and began to implement an MRPII system.  At the same time, we began to educate the shop floor teams and the rest of the organization in LEAN methodology and Total Quality Management.  The education of the organization’s workforce took about 4 weeks.  The implementation effort dropped lead-times from six weeks to one week and then to almost one day.  We then followed up with an implementation effort for the MRPII system using those new procedures.

The only thing it took to achieve those fantastic results was C level support; C level leadership and C level commitment.  The user community was involved in the efforts to learn to do their work differently. 

It is not rocket science after all.  What it is is just a commitment to want the workforce to work smart and be productive.  The management team works harder to lead the teams and gain their support for the project.  All the C level people really do is to work with the teams to ensure they have the right tools (education and leadership) to do the job right the first time.

Top Three Questions prospects ask Manufacturing Practices, Inc.

Michael Roman - Monday, February 28, 2011

Top Three Questions Asked of Manufacturing Practices, Inc.

 

We receive and comment on a number of questions on a regular basis.  Here are the top three questions we receive.

What specifically is an ERP System?

Although there are some differences between the details of what comprise an ERP System, there are basic pieces that must exist to manage an Enterprise.

  1. Planning in the short term – (2 years or less)
    1. The planning system allows proactive activities to plan what is needed in terms of Material and Labor for the planning period
    2. To gain the best advantage in using the planning system, Inventory, Bills-of-Material, and Bills-of-Operations (Routings) need to be accurate
  2. Execution – activities that allow the plan to be performed
    1. The execution system operates on the planning system data to procure the materials and labor needed based on the dates and quantities from customer orders or the Master Schedule (or Forecast) data
    2. To gain the best advantage in using the execution system, reporting methods must be timely, and work center efficiencies and Part Master Lead-times need to be correct
  3. Control – activities that tie back to the planning and execution systems that identify if the plan is on target to meet customer goals and where is it failing to meet expectations
    1. The Control system operates on shop floor and purchase orders from the execution system and creates data that identify if dates and quantity deliveries are being met
    2. To gain the best advantage in using the control system, proper attention needs to be focused on the dates created in the planning system

Contrary to most beliefs, any company can and should plan resources in both the short and long term.  Sometimes those resources are internal people, equipment, and materials.  Sometimes these resources lay outside of a company’s boundaries.  Regardless, a company must and can plan them.  Starting and maintaining a planning activity like Sales and Operations Planning (S&OP) is not difficult.  The difficulty is getting past the objections for performing the needed planning activities.  The S&OP Process lays the foundation for the hours of production needed, the types of raw materials needed, and the delivery of customer expectations as well as a product so that daily activities becomes ‘business as usual’ instead of fire fighting activities.

What is the biggest hurtle companies face in implementing an ERP System?

Small and midsized organization all have a common factor that contributes directly to their achievements, the entrepreneurial spirit.  They act quickly and forthrightly and face the consequences.  Planning is not one of their strengths.  To the question in point, more than anything else ERP is a platform for planning a company’s activities.  That said education has proven very successful in bridging the cultural gap for entrepreneurs that now need to learn to plan.  Two types of education are necessary.

The top management of a company needs to understand the details of the ERP System to some degree.  They need an understanding of which modules perform what function, how those modules interact, and the benefit of a module to the overall success of the organization.  Educating top management separately from mid-level managers and users has shown to be the best way to achieve this goal.  There are several reasons for this but the strongest reason is that this method allows company executives to discuss delicate company issues without fearing that the other groups might misunderstand those discussions.  Another reason is attendees can discuss the details at the appropriate level for each group.

The second type of education involves how to plan.  Any company will benefit from utilizing a formal planning system and ERP is certainly that.  Learning to effective plan the activities of procurement and operations is not a difficult task.  The largest part of the process is getting Sales, Operations and Financial people to meet for the first, second and third times.  The process usually manages itself after the third or fourth meeting.

Properly educating the company has shown to deliver unexpected benefits for organizations that create extraordinary results.  It is difficult to know the actual ROI, but APICS suggests that the ROI on education is about $3 for every $1 spent.

How long a period is required for finding and implementing a system?

There is not a simple answer to this question except to say that IT DEPENDS ENTIRELY ON THE ORGANIZATION!  I have been involved in selection and implementations that took 9 months.  I have been involved in implementations that took 9 weeks.  I also worked with organizations that took several years to implement the basics of Master Scheduling, Engineering Change Control, Inventory Management, MRP, Work Order Scheduling, with Financial Integration.  It depends completely on how committed the organization is to making the implementation its TOP PRIORITY.

Every company is different because every organization’s management team manages a company differently.  Sometimes implementing an ERP System requires changing the fundamental approaches of a company’s TOP Management or even its personnel for sundry reasons.

Usually education is the First Step in the process.  The Second Step is to clean-up (LEAN or remove the non-value added activities) associated with the company’s daily activities.  The Third Step is to identify the key business requirements of the business.  The Fourth step is to find software that can demonstrate how to support the key activities with process steps that most closely match those of the Organization.  The Fifth Step is to train to use the software.  The Sixth Step is to adjust and test the processes.  The Seventh Step is to perform the Conference Room Pilot.  With the successful completion of the Conference Room Pilot, the system is ready for use.  How long does this take?  How close to executing Step 4 is your organization?  Is Step 2 complete?  Have you performed Step 1?

 

LEAN Six Sigma ERP

Michael Roman - Tuesday, February 15, 2011

Today is Tuesday and I am way behind on my weekly blog.  It is not that I have been sitting in front of the television watching my Detroit Red Wings climb in the standings now that most of the team is healthy, I have just been busy working ON my business and not IN my business.

I just finished a conference call with another consultant (Joe).  Joe and I were discussing how we might work together on future projects.  Joe does LEAN - Six Sigma projects. We spend about 2 hours learning how the other approaches a consulting assignment.  We discussed how we defined the deliverables of the project (gains for the client), how we define goal setting within the project to show small and quick gains, we discussed the involvement of the C Level people and the involvement of the user teams.  We also discussed the toolsets that we use in our activities.  

I understand the LEAN - Six Sigma approach.  I began and made a great deal of progress in a Just-in-Time (now called LEAN) for a manufacturing facility in the 1980s.  I was also a quality manager for a tier-two automotive supplier.  At that plant, we had to perform within the “tolerance” range for delivery quantities, delivery date, delivery time, delivery packing sequence, and delivery quality.  

I am going to digress here and reflect for moment.  In the 1980s, there were arguments within the APICS Community (http://www.apics.org) about LEAN – Six Sigma – and ERP.  My mentor was one of the more vocal commentators and he said that they all were pieces of the same pie. 

He said Six Sigma sets quality limits to understand when something was not “under control” regardless of whether that something was a process, activity or a manufacturing operation. 

He said LEAN (JIT) was an activity that eliminated waste in something regardless of whether that something was a process, activity or a manufacturing operation.

He also said ERP was a tool for managing the interactions of the enterprise that employed processes, activities, and manufacturing operations, which Six Sigma controlled and for which LEAN methodology removed inefficiencies.   

When I said these words to Joe, he laughed.  He asked me if I had ever worked with George Plossl or just read his books.  I told him that yes, I had read his books and yes, I worked with George.  Joe then told me that we had a great deal in common.  He said George was also his mentor.

Joe and I take the same approach to our projects because our efforts address the client concerns to improve company profitability.  Joe and I only differ in what tools we use to focus the client.  For Joe, it is the Six Sigma and Lean philosophy, and for me, the ERP System is the tool.  I believe that when we work together a common voice will emerge and I believe the voice will be George Plossl.

When properly deployed, the ERP System provides an opportunity for companies to gain a competitive advantage in the marketplace.  It provides a standard way of performing work, it formalizes the business activities, and when properly deployed, it provides a measure of the effectiveness of the activities managed by the ERP system and the people using it.  A properly used ERP System contributes directly to the bottom line for whatever area the client targets. 

In LEAN - Six Sigma the goal is the same: to remove the inefficiencies in the system, and then to measure whether the activity is within the target range.  This creates a savings for the client and that savings increases the profits in the organization.

I am not sure when we will work together but it is comforting to know that we both had the same teacher and both have the success of the client as our short-term and long-term goals.

This is Not About ERP

Michael Roman - Monday, February 07, 2011

I am not someone who believes in coincidences.  I learned than when three or more parts of a central theme happen in a very short period, one must “Wake Up.  Something or someone is trying to tell you something!”  On Tuesday morning of last week, three things came together.  The total time between all three events was about 24 hours.  Here is what happened.

I had a discussion with a potential business colleague (Andy Farris) on Monday evening.  We were discussing his involvement with my organization in a sales role.  We discussed the challenges of the role, the tools at his disposal and a general discussion of expectations from us both.  It was an enjoyable discussion.  

In summarizing how he felt about the position, he mentioned that he would be interested in working together on a part-time basis.  When asked why only part-time, he mentioned that he was heavily involved in working with Vietnam, Iraq, and Afghanistan Veterans with PTSD (Post Traumatic Stress Disorder) and he could work no more than 20 hours per week with my organization.  I mentioned that it was an admiral activity and he said, “It is not an activity, it is a passion”. 

He is a Vietnam Veteran and was a Company Commander of an Infantry Unit.  He and I shook hands and we agreed to consider working together on a part time basis.  As I was leaving the restaurant, my cell phone rang.  A business colleague was asking if I was going to the Atlanta Vietnam Veteran Business Association lunch meeting the following day.  I asked the topic and he said it was about PTSD.  He said the speaker was discussing the family problems resulting from the solder’s medical condition.

I made a glib comment that I thought that it was not very interesting.  I mentioned that treatment occurred in the combat zone, the condition was well understood, and not much of a problem because of the recognition of the condition and immediate attention.  My colleague laughed and said, “See you tomorrow, you need an education”.   Let me mention that my colleague is a Vietnam Combat veteran and an Infantry Company Commanding Officer.  His laugh bothered me so I thought I would go, you know, just to humor him.  

I arrived at the Luncheon a bit early, met with some friends and looked for my colleague who was running late.  I was surprised to see such a huge turnout.  The meeting started and after the usual business activities, we met the speaker.  Lt. Colonel Lee Stuart spoke for almost an hour about how families of solders suffer.  He was involved in assisting the family of solders suffering from PTSD.  Families suffer emotionally and physically.  Lee mentioned that his efforts were entirely independent of the federal, state, and local governments.   He mentioned the suicide rate of returning veterans, and he mentioned how the families of those veterans often blamed themselves for the failure to help someone who could not be helped.

Well, I learned something last week.  The three things all coming together meant something (Andy, the Luncheon Meeting push, and Lee).  I learned I was not as smart as I thought.  I learned that old dogs could learn new tricks. 

I introduced Lee Stuart to Andy Farris.  You can go to my website and contact them both.  I hope that soon, they will be working together to help both the soldiers and their families as a unit.  Maybe if both the Vets and their families address the problem together, they can emerge stronger and as the single entity as they hoped when they spoke their wedding vows.

If you would like more information or to help returning service men and women and their families, click this link, go to the bottom of that page and visit their websites by clicking their links (Warrior Family Program) and (Healing Veterans) .  You can also, click here to visit Andy’s (Healing Veterans) site or click here to visit Lee’s site (Family Warrior).

As I was writing this blog, I was only halfway listening to the background music on the Web Radio – Hearts of Space.  It was 15 versions of “Amazing Grace” – program 872.  Before I could finish the blog, the Super Bowl between Green Bay and Pittsburgh began.  Our eldest daughter’s team is the Pittsburgh Steelers (she now lives in Pittsburgh).  It just so happens that my wife and I named our oldest daughter after a my father’s mother, who’s favorite song was – “Amazing Grace”.  What a coincidence as well!?

It is not business as usual, and they will have two jobs to do!

Michael Roman - Sunday, January 23, 2011

It is not business as usual, and they will have two jobs to do!

I enjoy performing ERP implementations.   It is even more enjoyable when the management team is properly prepared before my arrival.  One such project was with a manufacturer that made water purification equipment for municipalities.  The client site was on the east coast; they met me at the hotel on Sunday afternoon for dinner, drinks, and an overview of what the project entailed.  There were five of them and me.  The team was the President / CEO, the VP of Operations, the VP of Finance, the VP of Sales and the Director of Human Resources.  At that time, an ERP Vendor employed me and I was going to be the only ‘consultant’ on the project.  That meant that I was to do all the training, manage the project, write the status reports to both my company and to theirs, manage the data conversion, create the data for the conference room pilot (CRP), work with the departments on their individual mini-implementations before the CRP and manage the CRP itself.  That is if the implementation made it past the training. 

I was impressed with the President, he was a listener and asked his team for their input when I raised questions.  It was a refreshing approach, one I had seen very little of during my three years of doing ERP Implementations for this ERP vendor. 

The client had bought the full suite, from HR through manufacturing including the planning pieces of Rough Cut and Master Scheduling and the customer interface pieces of Sales Force Automation and the Activity Help Desk.  I was looking forward to working with this company. 

During our discussions, I learned that they had already attended ERP education and that this Senior Management group was the Steering committee and the people I was to train on the use of the software.  This group would manage the implementation project and they would train users in the new departmental procedures as well as how to use the new ERP Software. (This would shorten the implementation cycle by at least 1/3).   For me, this was a first; usually the senior managers distanced themselves from the real work because they did not want to be associated with a failure.  I learned that that attitude general was the reason that a number of ERP Projects failed.

They told me their timeline was 9 weeks; I told them it was an aggressive schedule.  The Operations VP told me that this project was getting in the way of other projects and needed to be complete before other projects started.  I asked if this was the only company project and the Ops VP said, “Absolutely, we already have our regular jobs and this one”.  He added, “It is difficult enough doing one job, and the thought of doing an ERP Project for more than 3 months is too much of a disruption to the normal business to languish beyond that timeline.  We just want to get back to our regular jobs and we want our people to do the same.”  The company president reinforced the statement, “It is not business as usual, and they will have two jobs to do.  We cannot overwork them for too long.  Too long is 10 weeks”.  Another first!  This company president and his management team were truly concerned about the work force.

We did the software training off-site for several reasons.

    1. It allowed a free flowing discussion
    2. Sometimes heated debates ensued, which was to be expected  and concerns that someone (outside of this group) would misinterpret the discussions did not exist
    3. We could focus on the activities at hand, without interruptions about other business matters
    4. We could discuss the pros and cons of options and the implications to the overall effectiveness to the business without others misinterpreting the intent of the discussions

Using this group to focus the ERP project performed economies of scale.  To reinforce the training, users input data from the legacy system.  We did not convert data.  Instead, at the same time as the training occurred, legacy data was scrubbed and input.  This removed a good part of the implementation activities and created a momentum for the implementation.  Users could actually see the light at the end of the tunnel and know it was not an oncoming freight train.  The other unique part of this client’s project was that the management team wrote the user guides.  The rational was that if the management team was to ask for data, they needed to understand the method for data production, the reliability of those data, and the validity of the data.  Being intimately associated with the details, gave them a unique perspective and effective method to manage the company with the actual data the ERP Software produced! 

The implementation progressed as planned.  It also survived the replacement of the Operations VP.  Five weeks into the implementation, he had a sudden heart attack and died.  Here, their planning paid for itself.  Instead of looking for an outside replacement, the Purchasing Manager, became the VP of Operations, a position he was educated and trained to perform.  The company president and I worked with him after hours to bring him up to speed.  He lived up to the demands of the new position.

One of the things that the company had learned at their ERP seminars was succession planning.  If that plan had not already been in place, the ERP Implementation would have suffered.  Because of their foresight, we minimized the possibility of a delay by the simple plan of preparing for it.  The delay was minimal; the project did not suffer a loss of momentum.  Instead, the company president took delight that the project stayed on track and on budget; the Purchasing Manager was excited about the promotion to VP of Operations; and my company loved the fact that we had another successful user.  It was a win-win-win.  The ERP System was operational in 9 weeks!

This company was remarkable for a number of reasons:

    1. Education occurred before the software was in place
    2. The education occurred at all levels of the company
    3. New processes were in place before the software
    4. The management team worked harder than the users.  Thought this is rare in the companies with which I work, sad to say that many companies are not comprised of real leaders.  This team was comprised of real leaders and lead by the best one I have ever met
    5. Managers were teaching the users.  This removed a number of ‘garbage filters’ and allowed the managers to show users how the job was ‘to be performed’
    6. Users understood that the boss knew what was possible with the new software and bought into the project because of the leadership shown by the management team

Smile when you do that

Michael Roman - Friday, January 14, 2011

ERP Selection and Implementations are a major focus of Manufacturing Practices.  We prepare the clients for success by:

    1. Educating the client company before the selection process
    2. Structuring the teams for the selection and implementation process
    3. Helping them “LEAN” the business processes before the selection process
    4. Clearly identify the key business activities before the selection process
    5. Finding software that fits the business processes
    6. Training users in software functionality
    7. Testing the business processes
    8. Reviewing the business about a year after the “Go Live” event

The mechanics are very successful, and people have fun when we do our work.  Helping people enjoy the activities is very important to us.  A colleague, Bob Green taught me that.

Bob Green was VP of operations for number of manufacturing companies before becoming an ERP Consultant.  Bob and I worked together at a company doing ERP Implementations.  He did the Distribution Modules and I did the Manufacturing modules (most of the time).  We talked about forming a company and striking out on our own but that never happened.  Bob died of heart failure before we could get our ducks in a row.  Bob and I always had fun doing our work and our clients enjoyed themselves; Bob taught me that fun was an important part of our jobs, and his influence was contagious. 

In honor of Bob, here are some of the lessons he taught me:                

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, or even me, he started the conversation with a smile.  I think 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 and me 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.  However, the other activities are not standard.  The advantage is that it gives us the opportunity to set the tone for what is to follow.

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.

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 I 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 my team or me; we review them and 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 calendar.  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. So, 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 those I remember was of a picture of me as I walked away from a meeting.  The president of the company commented, “Here’s Mike Roman, presenting his best side to the camera”.

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

One of the companies I worked with warned me 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 I worked with that company.  She and I are still friends and she sends me jokes at least once a month.  (I think the people in the company were having “fun” with me.  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 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.

I thought I knew why companies implement ERP Systems

Michael Roman - Tuesday, December 28, 2010

I thought I knew why companies implement ERP Systems.  After all,

1.       I managed ERP Projects as a user multiple times

2.       I have consulted on more than 60 successful ERP projects

3.       My ERP Consulting firm is more than 6 years old

4.       I have authored a book on ERP

5.       I sit on an APICS Certification Committee

6.       I am still in touch with many of my clients

However, an “ERP GURU” recently released an article that said I have been doing it wrong.

The GURU says that although there are many reasons to implement an ERP System, “One of the key reasons is to incorporate best practices" into the business.  I have been doing it wrong for almost three decades!

My clients and I have had have had a single vision for the project.  The reason we implement their ERP System is to create an opportunity to contribute to their bottom line.  We establish policies to help focus that effort and users translate the company policies into processes and procedures to support those policies.  We do define KPIs, we do set expectations for cost reduction, we set expectations to increase inventory turns, and we set expectations to increase customer service as well.  We do that by streamlining the processes they used and closely matched them to the software.  Where their processes produce a marketplace advantage that the software does not have, we change the software to match their processes.   Now I find out that my approach is in error.  Hmm… what do I do?

I could start by calling all my customers and tell them we did it wrong and that we need to go back and do it differently.  OK, I will test that idea out.  Let’s see, I will call Karen and have a talk with her.  We have not spoken for a while; it will be good to catch up on things.

“Good afternoon, Karen, this is Mike Roman, how are you?  Good… What about your son?  GREAT news!  I knew he’d be a great hockey player!  Are your folks doing well?  Oh, they have both retired.  Now they spend their fall and winter where?  No kidding!  Are your sister and brother both well?  Wonderful!  Good to hear that and still working there too; they must really like what they do.  I am so glad you three still work together, you are all so very lucky.  Yes, the girls are all well and so is Susan, thanks for asking.  How is the company doing?  Wow, great news, good niche for a focus too!  Hey, I know you are busy, so let me get to the point of my call.   I just read an article by an ERP guru and I wanted to tell you we did your ERP Implementation all wrong and need to redo it.  What, of course it is billable.

How long will it take?  Well, if we are going to do it right, it will take a long time.  Because the GURU said that companies implement ERP System to incorporate best practices into their business operations.  Well, he is the GURU so he must be correct!  No, I never claimed to be a GURU; I am just a person that helps companies focus their processes to increase the company’s bottom line.

Why will the new implementation take so long?  Well, we have to find out what the ‘best practices’ for your industry are.  Why?  So, we can change your processes to match them, of course.  I do not know who the experts are, that is one reason why the implementation will take so long.  We have to find those experts, and ask them.  You said what?  Ask your clients?  They are the experts!?  Why do you say that?

Yes, Karen, you are in business because of your customers.  Yes, Karen, if you do not satisfy your customers, you will not be in business long.  Yes, Karen, if you engage them in product design sessions, and you give them a good price for the product, if your bottom line is in the black, and if your customers continue buying and if you continue to meet their expectations by definition, you are satisfying your customers.  OK, Karen, you might be on to something.  Maybe your customers are your business experts.  What, that is what I educated you and your team to understand?  Oh, yes, so I did.  No, Karen, I am not a guru; I am just a person that helps companies focus their processes to improve their bottom lines.  I guess if your ERP System does that for you, we implemented it correctly.

Thanks for your time, Karen, that means a lot to me; please give my regards to your family and the team.  It was great speaking with you again.  Bye!”

Well, I guess the ERP GURU and I have a difference of opinion.