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ERP Implementation
Part 4 of 4


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Automate

The final step in the USA Principle is automate. Once a process has been understood and simplified, the automation step becomes critical. Unfortunately, there are three fundamental errors most companies make in the area of automation.

The first fundamental error companies make when evaluating and eventually choosing an ERP system is to limit their thinking to consid­ering how the technology can perform current tasks better. Instead, the company should look at the features of the ERP system and think of ways in which the technology will allow the organization to do things it is not currently capable of doing. The power of an ERP system can only be fully realized when it is used to break the rules limiting how work is currently processed.

The second fundamental error typically made when implementing an ERP system is that the implementation team believes that everything must be entered into the system and 100 percent accurate before any module can be utilized. This leads to inactivity because it is virtually impossible to ensure 100 percent accuracy. This is especially true in an environment as dynamic as a manufacturing organization. Organizations must determine when perfectionism is getting in the way of progress.

ERP systems can begin to yield ROI results prior to having every single module online. For example, a purchasing agent from a com­pany that manufactures electron microscopes said that if he wanted to know how much business he did with a certain vendor for the year, he would have to go to a file cabinet, pull all the invoices for that particu­lar vendor, and manually add all the totals. This process could be com­pletely automated with the implementation of a purchase system that keeps year-to-date statistics. All good ERP systems have such a sys­tem. The benefits realized from just automating purchasing would save this purchasing agent possibly two or three days a month and provide him with an effective negotiating tool. Again, these savings can be realized without having every vendor in the system with 100 percent accuracy or having the entire ERP system fully operational.

 

The third error is falling into the HAL Syndrome. In Stanley Kubrick's 1968 film 2001: A Space Odyssey, the spaceship computer, HAL, takes over the ship, killing several crew members in the process. HAL's origi­nal role was to support the ship, not control it. In an ERP implementa­tion, the computer has the same role—to support manufacturing, not control it. The HAL Syndrome occurs when a manufacturing organiza­tion focuses on the technical aspects of an ERP implementation while ignoring the importance of people, processes, and data. An ERP system cannot be successfully implemented without a strong focus on the indi­viduals responsible for the day-to-day operations of the company. Dur­ing an implementation project, the computer must not be allowed to con­trol the implementation. Successful ERP implementation teams utilize the USA Principle to safeguard against a computer takeover.

CONCLUSION

The proper application of ERP technology is critical to corporate suc­cess. If a company undergoing the ERP implementation process can avoid the common mistakes, it will have a competitive advantage few can match. When a company focuses on the power of ERP technology to simplify and streamline old, ineffective processes, then the company will be able to react to customer demands with speed, quality, service, and low cost. This reaction will mean lifelong customers and lifelong profits. Any manufacturing organization, which successfully navigates an ERP imple­mentation by utilizing the USA Principle is provided with a strategic advantage in today's fast-paced, ever-changing environment.

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

Lean Manufacturing Articles and click on Series 11


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