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ERP Implementation
Part 2 of 4


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A business needs analysis is a careful, step-by-step examination of how a business functions. It includes the collection of data from a va­riety of areas within the manufacturing organization. The needs analy­sis asks questions concerning

      on-time performance in shipping and receiving

      inventory turns by inventory type

      effectiveness of order entry processing

      costs associated with satisfying difficult customer requests

      effectiveness of materials planning

      plant layout and material movement

      sales and marketing strategies

      vendor relationships

      internal rewards and measurements.

In addition to asking a series of questions, a business analysis includes techniques to help organizations understand their own business processes and how they are impacted by an ERP implementation. Two of the more effective techniques are diagramming and "walking the process."

Diagramming is an excellent tool for understanding internal processes. First, determine what symbols to use for representing the different parts of the process. See figure 1. Gather all employees with a part in the process and have them each draw the process using the predetermined symbols. When finished, ask the employees to compare and contrast their separate drawings of the same process. This will typically yield fascinating and sometimes frightening results. When the group reaches consensus on the actual process, have the process diagrammed and posted in an area as close to the actual process as possible. During the compari­son stage, take notes on the areas of difference among process partici­pants. These differences are usually areas in which trouble occurs during

the ERP implementation. These differences need to be addressed prior to automation.

Once the diagram is agreed upon by the group, label each step in the process using the following codes:

     V—This step adds value to the process and must be kept.

     R—This is a rework step and needs to be eliminated.

     U—This is an unnecessary move or wait step.

     P—This step is important but problematic.

These codes will help the group determine the true value-added steps and separate them from the steps that do not add any value to the process. The goal will then be to simplify the entire process so only the value-added steps remain.

Another powerful technique for gaining process understanding is to simply "walk the process." This is done by carrying a customer or­der, work order, or purchase order through the entire organization. For example, a work order is walked from operation to operation until the item is completely manufactured, packaged, and shipped. While walk­ing the process, it is important to look for unnecessary wait, move, or queue time. In addition, identify any search and retrieval tasks, extra handling of material, and other non-value-added work.

The results of the business needs analysis are a solid assessment of a company's position and the identification of opportunities for im­provement. Once the business needs analysis is complete; a company has an accurate "understanding" of its processes.

The next step is for personnel within the company to gain an under­standing of what exactly an ERP implementation will entail. The proper level of understanding can only be achieved through proper education and training.

 

Few implementation teams receive any training in team building, project management, negotiation skills, decision-making, need analy­sis, or any other soft skills essential to implementation success. In­stead, companies tend to focus on hard skills or the more technical aspects of ERP.

 

Technical training or hard skills training in the areas of material requirements planning (MRP) or inventory formulas, while important, should not be the focus of ERP training. Technical training alone does not result in implementation success. When implementing an ERP sys­tem, the practices and procedures of the entire organization are chang­ing. Employees must be taught how to handle the change and adapt to the new procedures. When all the training revolves around punching buttons and reading screens, employees focus on the computer and not the manufacturing practices introduced by the ERP system.

 

Separate the computer from the process and procedures of the ERP system. If possible, conduct "computer" classes within your manufac­turing organization that focus purely on computer literacy, word pro­cessing, or spreadsheets without any mention of ERP. Show employ­ees that the computer is simply a tool and not the focus of the ERP implementation.

 

In addition, conduct ERP classes without discussing the computer. Show employees the overall picture of the organization (the business analysis process can help) and how an ERP system will improve manu­facturing and profitability within the company. Show employees how an ERP system is a collection of practices and principles. Mention, in an offhand manner, "Oh, by the way, the ERP system runs on a computer."

 

Not only will such soft skills training improve and simplify your ERP implementation, the skills gained will prove highly transferable to other corporate improvement projects. For example, the skill of "ne­gotiation" can be used daily when talking with customers, vendors, and co-workers.

In addition to an emphasis on soft skills training, the project team should be trained to avoid any technical computer jargon when discuss­ing the implementation. Language frames how people perceive an envi­ronment. The project team and upper management should continually refer to the ERP implementation as a computer project, then everyone will view the new ERP system as such. Even in closed-door meetings, the conversations should revolve around the impact on manufacturing and not the computer. The idea to help everyone within the organization to understand that the ERP system is an improved method of manufac­turing, not simply automation of old processes.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 11


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