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Strategic ERP Implementation
Part 1 of 4
Lean Manufacturing, Basics, Principles, Techniques
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This case study describes lessons learned from the ERP implementation at a leading metal container products company. It is a $200 million, 53-year-old company, headquartered in the United States, with facilities in multiple states and in Europe. It is a leading producer for the wholesale, retail, OEM, and industrial markets. The company was in the midst of a successful turnaround during the project, which was initiated primarily to deal with the Y2K problem, as a new management team provided new direction. During the project,
the company was also transitioning to focus factory management, flow
manufacturing, product rationalization, and reorganizing business
units, all this in the midst of a major facilities consolidation. In
spite of all this, the project was probably in the top 10 percent of
ERP efforts. The founders sold the firm in 1996 to the present owners, who faced a number of challenges to bring the company up to their expectations: • need for more
emphasis on quality In that context,
the company was attempting to modernize, rightsize, and streamline
for the future, but nearly lost the race with time. About six years
ago, the company engaged a major consulting firm to study major
improvement opportunities. One of the chief recommendations was to
upgrade ERP systems, but due to many other priorities, the company
only started moving on the recommendations in mid-1997, with a
looming Y2K deadline. Therefore, schedule and implementation
priorities were somewhat mandated by the situation. The unresponsive business systems weren't solely attributable to ancient software. There were also data integrity problems in inventory, purchasing, and production. Practices and procedures were in need of updating. Much training was needed. Existing systems tools were not even fully implemented. There were philosophical differences between the way the business was run and how the systems were designed to work, not an atypical situation in many companies. THE ERP PROJECT The company had a "legacy" system, consisting of Data 3 MRPII, HFA Order Entry/Accounts Receivable, S2K. (Infinium) Financials and the old ADP payroll system. These were all pretty good products in their time, but they had not been kept up to date. Although vendors did offer newer versions, required customization made some impractical. For a variety of reasons beyond the scope of this paper, the company chose a very expensive but good set of platforms, including Oracle applications and systems software, Hyperion Pillar budgeting, ADP PC-based payroll, ADP HR systems, HP hardware, and HP-UX operating system and other mass storage, networking, and data warehousing products. The company set up an implementation team consisting of an executive steering committee, project manager (from Engineering!), project leaders from middle management, and 10 "superusers," mostly high-potential administrative people, to become their departments' experts in the new system. In addition, there were a number of Oracle technical and applications consultants, as well as third-party contract programmers, database administrators, and business consultants. There was a fair amount of personnel "churning," until the company got the right combination of Oracle and other outside consultants. Several internal team members fell by the wayside, principally due to operational workloads or people moving on. The team leaders were especially vulnerable to their heavy departmental workloads and some were not able to devote sufficient energy and time to the project success. To a significant extent, the superusers, outside consultants, and IT personnel picked up the slack. Progress was relatively slow in the initial months, even requiring a rededication at one point. But the company and the team never gave up and ultimately progressed to a successful and fairly smooth implementation, but not without a struggle during the preparation. To Be Continued STAY CONNECTED To stay current on Lean Management Basics and Best Practices, subscribe to our weekly MBBP Bulletin... and we'll send you our PowerPoint presentation "How to Survive in an Entirely New Economy." All at no cost of course. Your personal information will never be disclosed to any third party. privacy policy
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