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Enterprise Resource Planning System Implementation Considerations

Enterprise resource planning involves integrating all business management functions but also requires the input of talented, creative individuals who can manage these areas of responsibility effectively.

Enterprise resource planning: you can dress up the concept any way you want: implement a lot of flashy flow-charts and throw around a lot of impressive titles, but at the end of the day effective enterprise resource planning (ERP) depends on people.

I. Your best resource

Food for thought: if the life-cycle for running a business centers only around your computer i.e. you store the fixed information the company needs to run its business, bills of material, part number data (lead times, order quantities, safety stock etc.) and add some processes such as sales order processing, inventory control, works orders, purchase orders and a bill of material explosion have you improved the business?

More specifically "have you improved customer service, reduced inventory, stabilised manufacturing, provided everyone with a better quality of information with more visibility to do their job and, last but by no means least, have you got your money back from the not inconsiderable investment in hardware, software and everyone's time?"

Sure, enterprise resource planning involves integrating all business management functions, including planning, inventory/materials management, engineering, order processing, manufacturing, purchasing, accounting and finance. But ERP also demands talented, creative individuals who can manage these areas of responsibility effectively.

II. It's not rocket science, just common sense (or maybe its cents)

Did some mention quality-control standards for ERP success? How about these:

- Realise that plans must be realistic and achievable (any plan with due dates in the past is neither realistic nor achievable) and they should only release orders when they have checked that the material is available.
- Recognise that it is in everyone's best interests to follow the plan, planning in advance if they don't hit their target date.
- Orders must only be accepted on the basis of available, planned capacity.

Now it's easy to say all this is obvious, which it is. It is harder to admit that you do not do some or all of it as well as you could. Changing hardware and software is not the hardest part. What's difficult is the cultural change needed to make an integrated planning tool work. Simply put: without the cultural change you will not change business behavior.

III. Stakeholders anyone?

Before you can change performance measures, however, you need to have developed a shared vision of the new way of working. It is impossible for anyone to hold down a line function and keep up to date with current best practice. It is not only much cheaper but also more effective for you to learn best practice techniques and then get a strictly limited amount of help from consultants to help you apply the generic ideas to your business in the most effective way.

The change process happens much faster and more reliably if at least the project leader is full time. In addition to a project leader you also need a project team to co-ordinate the change process. You should set up task forces to tackle each change area such as sales and operations planning, master production scheduling, data accuracy (bills of material and inventory in particular), performance measures, manufacturing and purchasing. The task force members must become the company experts in best practice in their area; some should become internal educators.

It is vital that you do not overlook the need to have in-company experts in both the software and the generic planning principles. Any help from outside consultants must be as coaches not players. You should check that any consultants who will actually be working with you (not the consultant group or partner you first speak to) have experience of successful implementations in a similar type of business.

To recap:

- For change to happen in enterprise resource planning people have to do something different, a change of culture and people will not change until they understand what's in it for them.
- To change performance measures in order for enterprise resource planning to work, you have first to develop a shared vision, a new way of working together.

And finally, no-one should be expected to know the best way to change their way of workingBusiness Management Articles, they need help and guidance from people who have done it before.


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