Most of those folks would also quickly point out that ERP still has certain shortcomings. When you throw in a rocky economy, globalization, mushrooming amounts of data and activist stockholders, the shortcomings of ERP become even more obvious.

In the not-so-good old days, things were simpler. Sales would submit a forecast; managers would build budgets around the revenues contained in that forecast and the projected expenses to produce the products sold in support of the forecast.

All of the assorted budgets would roll up under a financial plan for the year. The financial plan would then be manifested in a production plan for the factory and an acquisition or purchasing plan to acquire the supplies, parts and other necessities required to build the product to fill the forecasted sales.

ERP provided the managers with a way to track reality against the plan.

Early on, this was provided in the form of batch-generated hard copy reports. Reports were delivered on a daily, weekly, monthly, quarterly or annual basis. Each manager would receive those reports relevant to their own piece of the enterprise. After analyzing the contents of the report, the manager might make changes in the forecast, raising or lowering the quantities of supplies and parts ordered in response to the sales reported for the preceding report period.

In a world where most customers were located close by and where suppliers were just down the street, where sales reps physically called on customers with regular, weekly or monthly frequency, this system worked remarkably well.

Today, things are different. Today the customers are all over the planet. Suppliers are likely spread around just as much. Pricing volatility is magnified by the distances involved and by other factors such as political stability, weather, labor availability and a host of other things.

Demand is just as volatile. A large seismic event can drive demand for certain types of product through the ceiling. A local fad can cause a spike in demand for one product and leave a previous best seller looking for sales.

Political climate, cyclical weather events, world agricultural crop performance and a myriad of other things are all relevant to the manager, director, CFO and other ERP consumers of today. The reason for this is that these events affect price, supply demand and other fundamental factors that ultimately result in determining how many widgets the enterprise buys, makes or sells.

Even if you run a 20-person factory in a basement in the middle of Kansas, you probably are buying and selling stuff all over the world.

With this geographical range and with these market sensitivities, the days of looking at last months sales to figure out what you’re going to order for next months production simply will not get the job done. You can’t drive a car by looking in the rearview mirror and basing your forward motion on where your car has been.

Today, managers and CFOs are looking to ERP to provide much more information, to provide it in real time and to provide it in an understandable format. The new management paradigm is not so much based on reaction to previous performance, but rather, to modify activities as they happen; the ultimate goal being to change the outcome of the current reporting period.

This kind of requirement means each manager, director and every C level exec needs to have delivered to them the specific, actionable information required to make these critical decisions intelligently and in a timely manner.

To do this, ERP systems have to be well past the batch reporting mentality that more or less has defined them for so many years. Data reported must be available in real time. That data must at once have sufficient detail to supply a granular image of business activity, but simultaneously it must be readily distillable into actionable information.

In a previous piece, we talked a bit about roles in ERP and this is where true role based ERP makes its mark. Each role has unique and variable needs. The persons associated with those roles should be able to configure and re-configure their own information dashboard to reflect specific needs at different times of the day, month and year. They must not be locked into a fixed format or report nor should they be subjected to a deluge of data trying to cover all possible needs at all times.

It’s like driving a car, there are times when you need to pay close attention to the speedometer and other times when you are more focused on the fuel gauge. Managing a production process or enterprise is the same, on different days you’ll need different data in order to do your job. Your ERP system must facilitate that.

Today, great ERP systems must truly facilitate the management decision-making processes, not just supply piles of data to be sifted and pondered. Highly detailed, massive reports are essentially useless if the information within the data is too obscure to be understood.

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In this case, the word is Roles or Role-based. So you are probably asking yourself, why should I care about Roles in relation to ERP systems? What do Roles mean to my ERP system or to me as a user of ERP?

The good news is that Roles and Role-based ERP are not just market-speak buzzwords. Role based ERP is a natural evolution or movement toward a leaner and more responsive type of ERP.

Historically, early ERP manifested itself to most users in the form of periodic reports that were delivered to specific individuals within the enterprise. These reports were typically fan-fold print outs, very thick and pretty much locked in terms of format, sort order and presentation of the data within. The recipients would flip around one or several reports, collect some data and make plans for the coming month, quarter or year based on what they felt that data signified.

Who you were within the organization determined what reports you were entitled to receive. If you were an accounting clerk, you might get a detail report of payables and receivables for a particular period. If you were a plant manager, you might expect to receive several cartloads of reports containing a vast amounts of data that would require a lot of time and research to absorb and react to as a decision maker.

As time went by, ERP became more sophisticated and the applications that made up ERP systems became more tightly defined. These applications used that same vast amount of data to drive themselves and to inform the application user in their decision-making processes. These apps tended to be very large and usually complicated.

If you worked in a Finance area, you probably needed to know or understand the entire finance system or application set in order to do your job, even if your job was simply to prepare invoices for customers. If you were a warehouse worker, you probably had to have a good understanding of the whole production system family of modules just to make sure the right supplies or parts made it to the production line for each shift. A plant manager might spend most of their day in front of a screen bouncing back and forth between this module and that to make sure things were moving smoothly.

Role based ERP architecture changes all of this. Role based ERP starts by asking the question; what do you need to do your job? From that point, your workstation, your view into the ERP system is defined by the answer to that question. The only functionality and data access delivered to you is that which is required to get your job done.

No longer do clerks need to understand and know the entire finance system to process payables. No longer do line workers need to know the ins and outs of the scheduling system just to send an electronic Kanban signal to the warehouse for more parts or supplies.

Everything is done on a need to know basis. Workers aren’t weighed down with the necessity of learning an entire system to perform the tasks associated with their job. Managers have the same advantage. Their view of the world is defined by that information required to make the decisions necessary to run their part of the organization.

In some cases, this flexibility is almost infinite. Some systems will pre-package specific functionality associated with a pre-conceived idea of how that role should be functionally defined. Other vendors will allow each role to be functionally adjusted, tweaked, modified and changed to suit the needs of that organization and the needs of the individual user.

So what’s the big deal?

The advantages of role-based architecture are numerous. Let’s look at a few.

Training – Learning to handle individual roles is vastly simplified if the role itself does not require learning beyond the requirements of the role itself. That receivables clerk just needs to learn about processing receivables rather than learning the ins and outs of the entire finance system. This means new hires are productive sooner, implementations are delivering advantages sooner and that more cross training time is available to assure an adequate level of redundancy within a department.

Security – Let’s face it, whenever an employee leaves an organization a lot of proprietary information goes with them. Most folks are honest and don’t go out of their way to divulge your trade secrets, but it does happen. Role based limitations limit access to the “big picture” to those who really need it to do their job. This limits the unnecessary exposure of proprietary information.

Better Execution – When you are able to define the parameters of a job effectively, the person in that job will more fully understand what is expected of them in terms of performance. This facilitates better measurement of employee output, quality of output and it isolates areas that need attention. You have tangible, measurable factors to evaluate rather than subjective feelings or gut impressions. Problems become evident sooner allowing fixes to be implemented, which minimizes the negative affects of the problem.

Better Management – Because actionable information is delivered to each manager based on their requirements and needs, they will spend less time sifting data and more time planning and executing. Managers will reap the same benefits that clerks do in the area of reducing the chaff around their jobs and increasing access to actionable information.

Economy – It only makes sense that roles utilizing less ERP resources would reflect lower fees and resource overhead expense. This is very good news in terms of the run rate associated with large ERP systems.

For more information on role-based ERP, and how it can be beneficial to your organization, drop us a line at info@cincom.com . We’ll put an expert in touch with you.

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But is rapid deployment ERP for you?

There are three areas that require your consideration in the process.

• Your specific needs in terms of the system and the usage of the system.
• The vendor’s ability to address your needs in terms of functionality and the performance of a quick implementation.
• The contract agreement or legal issues governing your relationship with the vendor.

Let’s consider these in more detail.

Functional Needs
This is the toughest question or area of consideration. You need to look at what your ideal or full-featured system is expected to accomplish and then start trimming away everything that is extraneous or non-essential. Remember your temporary system is meant to serve as an interim solution. For this system, you really only need the most basic functionality to enjoy the main benefits associated with ERP. For instance, the performance reporting aspects may be critical for operational planning, but the lot serial traceability may have little application in your line of business.

Also, you need to look at how the system is going to be used. Full-blown ERP eventually touches everyone in the enterprise; your temporary system may need to touch far fewer. This is important if your vendor is pricing and licensing by seat or by functional module. Who really needs to access or use this system and what level of use do they require?

What types of users are needed? Are they all just end-users? Do you require multiple administrative licenses? What about programmers? Will the code be modified or require maintenance?

It is desirable to have these questions answered and understood early in the selection process.

Vendor Requirements
Obviously, the individual product offerings from selected vendors must meet your requirements as determined in the preceding section. If you have to have German language support, you don’t need to waste time looking at products that don’t have it.

Just as important is the vendor’s ability to handle the quick implementation. Here you should require some references related to the vendor’s implementation track record. Not all disasters make the newspapers, so take your time with this aspect of your evaluation. Talk to end-users. Don’t just listen to vendor reps or read user stories. Get a firsthand account of a real implementation.

• Did it start on time?
• How did they handle problems along the way?
• What the biggest issues with the implementation?
• Would you do business with the vendor again?

All of these sorts of questions should be explored.

Contract Agreement and Legal Issues
Flexibility is the word here. You need to be able to transition off the system quickly and without punitive fees. Your vendor must understand that their solution is not the long-range solution and their opportunity here is to facilitate your move to the ultimate ERP solution.

Another area might be usage levels. Perhaps you need 150 users at the onset, but as areas move over to the permanent system, you might need to move them off the license (and see some subsequent fee reduction).

There are several mutual advantages in this relationship that should give you and your vendor some benefits.

First, your vendor has a great opportunity to feature a showcase account in a market they had previously thought to be out of their reach. This is of great value to any company. Anything you can offer them in terms of testimonials, user stories and endorsements should be considered as having value.

To the degree possible, make this something that you can offer the vendor as consideration for some standard-contract language concessions. For instance, the standard contract may only allow full-year maintenance cycles. No one knows when your primary ERP system is going live, but it will likely not correspond to the anniversary date with your short-term contract. Consider trading five one-on-one live interviews with your vendor’s prospects in consideration of a 60-day opt-out maintenance notice.

The likelihood is that this relationship will continue longer than planned. Negotiate an agreement that is focused on short-term needs but also that can be fair over a longer term.

Conclusion
Rapid-deployment ERP and short-term ERP are alternatives that make sense to some users. This is not a strategy for all users or for all vendors either. But, in the right context, it is a great way to meld the future with the present, to have it both ways and to keep the enterprise from being bogged down in a paralyzing process.

This is an edited excerpt of “Rapid Deployment ERP: A New Way to Make Implementation Painless.” To view the full paper, visit our Lean Resource Center at www.cincom.com/lrc. (One-time, email-address-only registration required.)

Image: Wallpaper-Driving Fast by Chris Havard-Berge

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Tell me, How long, do I have to wait?
Can I get you now?
Or, must I hesitate?

Hesitation Blues, by the Reverend Gary Davis, tells a story of the frustration associated with unrequited love or perhaps it’s from misaligned goals. The fellow in the song suffers an endless wait because the target of his affection has other priorities. He must wait

Waiting is one of the key types of waste. Waiting occurs when Work in Process (WIP) is not moving through the production process. Workstations and personnel are idle, waiting for work. You’re on station, your parts inventory is ready, your tools are primed for action, there’s just nothing to do. Therefore, you wait. If this is a five minute, once a month event, it’s not so bad. If it happens continually, it is extremely wasteful.

The minutes spent waiting add up to hours, the hours compound themselves into weeks, and soon the weeks are extending over multiple months of time spent in complete inactivity.

In the world of manufacturing waiting occurs within the assembly process because of an imbalance in the flow of materials through that process. Each station has a throughput capability. One manufacturing process my require 30 minutes to process a single unit while another requires ten minutes and yet another requires a full hour.

This disparity in processing time causes Work in Process (WIP) to stop moving forward, which in turn causes down line processes to wait on work. This is made worse in linear processes where each successive process depends on completion of the previous process.

The goal is to synchronize the production process to match customer demand. This, in turn, facilitates a steady, even production of product with no bottlenecks along the way. No one waits on product and no one is overwhelmed trying to keep up with demand for product.

The first step in this process is to establish the Takt time. This is taken from a German word, taktzeit. Taktzeit translates roughly to clock cycle or time cycle. In manufacturing the desire is to establish a steady, minimally fluctuating production pace. This is almost like the heartbeat or pulse rate of the production process.

Takt time is calculated by dividing available production time by demand. If your plant operates on eight-hour shifts and your demand per shift is 8 units, the resulting takt time is 1 hour. If your demand is rated at 16 units, your takt time is 30 minutes.

The takt time is used to tailor your production process, making resources available and capacity adjusted to match, as closely as possible, the established takt time.

An examination of your production processes will reveal the assorted throughput capabilities of each sub-process or workstation. Some of these will exceed the takt time requirement and other will fail to produce sufficient volume to keep up with demand.

If station A is through putting 100 units per hour and Station B is only able to handle 50 units per hour, there are two options. You can reduce resources available at Station A thus cutting the production to match Station B. Similarly, you can add resources to Station B bringing the throughput there up to that of Station A. Takt time tells you which of these two options is the most desirable.

By organizing your production processes into work cells you can make you overall production process more responsive to changes in customer demand. Work cells combine multiple assembly or processing steps into a single unit. Each unit is balanced in terms of takt time and through put. As demand fluctuates, cells are added or taken away to meet changing demand needs.

This facilitates a steady amount of work distributed evenly over the entire production process that minimizes backlogs, bottlenecks and downstream waiting.

If we pay a short visit to our hamburger stand, we can see ample evidence of this as well. The number of people flipping burgers, dropping fries and taking orders is widely variable between noon and 3:00 pm. The number of customers is also variable. At noon, you will see 20 customers waiting in five lines. There will be five cashier/order takers, three burger cooks and two fry cooks making sure the orders are processed quickly. Each customer is waiting no more than three minutes from the time they step into line to picking up their bag of goodies and heading for a table.

By 3:00pm, the scene has changed. Four customers wait in a single line, one cashier is taking orders and one person is in the back cooking burgers and making fries. But even though over all demand is reduced to 20% of the peak demand experienced at noon, the customer is provided with the same level of service as are the lunch patrons . . . fresh burgers and hot fries in about three minutes.

In conclusion, no one likes to wait on love, hamburgers or work in process.

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See reasons 1-5 for automating your manufacturing compliance here.

Reason 6: Create a Compliance System of Record

When manual processes dominate the quality management process workflows of a manufacturer, it is common to find disconnected or totally isolated systems that contain only a small proportion of the total quality management strategic performance of the company.

Manufacturers that rely extensively on manual workflows have only an anemic, fragmentary compliance system of record. The majority of the fragmented data records are in Microsoft Access, Excel or Word, or in any number of other mostly PC-based database systems.

For any manufacturer to realize the benefits of pursuing quality management strategies, there needs to be greater integration across the many fragmentary databases, data sets, historical performance data, supplier audit results, non-conformance history and, corrective-action reports.

Once these are organized into a single compliance system of record, the manufacturer is able to effectively define and execute quality management strategies. One example of this involves the historical analysis of suppliers and the effectiveness of supplier management. Having a compliance system of record would show just what aspects of supplier management led to increased quality levels, that didn’t, and what the trends are in suppliers and their ability to meet quality levels.

Reason 7: Ensure Engineering Change Notice (ECN) and Drawing Compliance

The more complex the manufacturing environment, the greater the impact of ECNs and drawing modifications across engineering, design, purchasing, production, and quality-management departments. Many manufacturers have had their ECN processes in place for decades. However, while they operate efficiently and have well over half a dozen colored sheets with specific routing workflows designed (before Visio was ever visualized), the sheer volume and complexity of changes required is dramatically increasing. Design engineers working on the in-cockpit electronics for the Airbus A380 remarked that at nearly three inches thick, the ECNs for the A380 are now thicker than a large metro telephone book. Admittedly, the A380 is one of the most complex aircraft ever produced, and the in cockpit systems rely on over two dozen integration points across dozens of onboard systems. This example, however, underscores why even the most well-worn paths of ECN process workflows in manufacturers are increasingly overburdened with ECN volume and complexity, the likes of which they have never seen before.

The effectiveness of your business depends on your ability to enforce standard operating procedures, share knowledge, and document control process. There is no easy way to properly control changes in products, processes, and master records. Change control is a complex process. Failure to have an adequate change control system can cause equally complex results.

Inadequate change control can expose a company to product liability action resulting in product recalls, internal confusion, and a violation of product, processes, and equipment regulations.

The bottom line is that the managing of change control through a more effective approach to classifying, analyzing, and responding to ECNs electronically is critical to stay competitive. Manufacturers that have grown through acquisition face the daunting task of reconciling their ECN process from two or more systems, factories, and process sets. However, by automating compliance, the ability to automate ECN workflows, including the allowance of multiple and often parallel signatures, can save hundreds of hours a year and ensure higher levels of product compliance.

Reason 8: Use Compliance as a Catalyst for Process Improvement

Creating and executing a compliance strategy has to do with redefining supplier qualification, management, incoming inspection, product non-conformance, and corrective-action processes so that a consistently high level of product quality can be delivered. The impetus for process improvement is customer-driven quality standards that need to be met in order to keep sales levels up. This is certainly the case both in commercial and consumer markets, where consistently delivering to a specific level of quality can mean the difference between retaining or losing a customer. Customer loyalty has a lot more to do with product quality than any other aspect of the marketing or sales-execution mix.

The consistency or lack thereof of product quality says everything about a manufacturer: their commitment to continuous improvement and their commitment to fulfilling the customers’ expectations and delighting them.

Process improvement is critical to the ability of staying aligned with customers’ expectations of performance in order to deliver them.

The bottom line is that those highest-performing manufacturers are using quality initiatives as the catalyst to make their production more centered on customers’ expectations first, whether those expectations are in the form of an ECN, contract, or purchase order.

Reason 9: Transform Compliance Wins into Competitive Differentiators

Consider the GE culture and its transformational effect in the Six Sigma concept or the Toyota Production System and its heavy reliance on compliance performance measurements, and the reasons for automating compliance become clear.

Once a manufacturer has chosen to automate compliance processes, one of the strategic objectives to consider is how to position quality leadership as a competitive differentiator.

For many organizations, this is the culmination of a quality-management strategy that begins with business-process re-definition and progresses to supplier ratings, corrective and preventative actions, and then throughout the managing of product and process quality on a consistently high basis. The bottom line is that instead of just relying on price, promotional activity, or channel strategies, considers turning your compliance strategies into a competitive advantage by underscoring product and service quality performance. Only by taking a more integrated view of quality management strategies can this happen.

Reason 10: Manage Government Regulations so They Don’t Manage You

Quit looking at regulations for compliance as an impediment to getting your company’s strategies together and think instead of how compliance to these regulations can become a competitive advantage. Responding to the intent of the regulation is critical and also leaves latitude to structure your own customer-centered compliance strategy, giving you competitive strength in the long run.

Making regulatory compliance work for your company starts with a clear definition of how you can make your product quality and product compliance strategies more aligned with customers’ needs and less inwardly centric and focused only on clearing the next regulatory hurdle. Being more customer-driven from a compliance standpoint puts regulatory compliance in its proper perspective, and this is another reason why many manufacturers choose to automate their compliance strategies.

The bottom line is that responding to regulatory compliance requirements needs to be done within the context of market- and customer-driven quality initiatives. Don’t comply for the sake of complying; comply to find a unique competitive advantage on which you can capitalize.

Image: Quality by nidhug

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Reason 1: Improve Product Conformance at the Process Level

Let’s face it, when products aren’t regularly conforming to quality assurance or customer standards, it costs the entire company lost time in firefighting toward a workaround solution and possibly reduced customer satisfaction.

Instead of resorting to the quick fix that can drain revenue, manufacturers that have turned compliance into a competitive weapon take these steps:

• First, they evaluate and in many cases re-define the supply chains, production processes, and quality-assurance standards to alleviate bottlenecks in the production areas.
• Second, entirely new approaches to measuring quality and compliance are often initiated to augment procedures already utilized. Parameters are rigorously scrutinized. These steps give the manufacturing teams’ insight into which processes are underperforming and the circumstances responsible for these defective processes.
• Third, enterprise compliance and quality management software is used to selectively automate those areas where manufacturers can get the best return from this IT investment.
• Fourth, benchmarking and performance analysis is completed. Corrective and preventative action at this point is no longer a firefighting exercise but one that can be handled through exception reporting and fine-tuning the process itself. The result is that when non-conformance is reduced, customer satisfaction increases and service costs drop.

Reason 2: Create a Culture of Quality in Your Supply Chains

Many manufacturers marvel at the Toyota Production System (TPS), and envision it as insular, contained within the Toyota manufacturing plants with Six-Sigma measures of production quality and efficiency. The foundation of this world-class production system is actually based on a very high level of supply-chain quality standards that Toyota suppliers need to consistently meet in order to continue shipping products to the auto manufacturer. Suppliers have said that participating in the TPS forces a culture change first in their companies, then a re-alignment of processes to better share knowledge in the Toyota Supplier Network.

Reason 3: Synchronize Inspections and Audit Data to Supplier Rating

When manufacturers rely only upon manual processes to complete inspections and audits, it is rare that these results are correlated back to supplier rating results.

Maintaining the information in a centralized database, minimizing the possibility of error and automating calculations could in fact signal exceptional gains in the performance of suppliers to quality standards. The opportunity for a manufacturer to further increase the performance of suppliers to quality, delivery, and performance standards is lost because the supplier rating information is not adequately calculated and communicated to the supplier.

For manufacturers that choose to automate their manufacturing compliance strategies using an Enterprise Compliance and Quality Management (ECQM) approach, the potential exists for motivating each supplier to continually higher quality levels with a correspondingly higher level of goals set for follow-on supplier ratings.

The bottom line is that through first defining the processes that interlink inspection and audit to supplier ratings, manufacturers can encourage each supplier to implement specific improvement strategies and rapidly see the results in new shipments.

Reason 4: Develop a Comprehensive Corrective and Preventative Action Strategy

Error detection and prevention is a hot-button issue today, and compiling accurate records of corrective actions is crucial for maintaining a good quality system and preventing the reoccurrence of defects. It is important to have a closed-loop mechanism for initiating, implementing, and verifying the effectiveness of changes resulting from the non-conformance process.

Some problems may only need simple resolution, which may be closed in an exception or non-conformance record, whereas other types of problems may require the exception to be attached to an issue or action plan to complete the investigation. This is why it is important to have a system that is customizable for your specific needs and for the requirements of your industry.

Reason 5: Create and Post Audit Benchmarks on Supplier Portals

One of the best strategies for creating and sustaining competitiveness between suppliers regarding quality is to post their relative performance on portals and internal websites where all suppliers can see who is excelling, who is staying at a constant quality level, and who is falling in terms of quality. Manufacturers that do this actively include Dell, General Electric, Hewlett-Packard, Toyota, and many others. Microsoft does this on its supplier portal called Microsoft Market, and internally this visibility into supplier performance is called “rank and spank” strategy for ensuring high levels of supplier quality.

Image: 06 by newhousedesign

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Another useful analogue for explaining the waste of conveyance is found (once again) in the food service industry.

We have a restaurant chain in our area that features the one price, all you can eat, multiple station buffet concept. I’m sure you’ve seen these places. You move through a little maze of chrome fences designed to regulate the unending tide of humanity flowing toward the cashier station and ultimately to the real goal, unlimited food.

You pay in advance and then you are given a set of flatware and a rather small plate. After that, you are directed into the serving area or as I like to call it, Hog Heaven. Gourmands of the world probably fantasize about this place.

There are numerous colorful kiosks, each featuring a different type of food.

You will have a pancake, omelet and waffle bar. There will be steak, prime rib and roast beef counters. There is a pasta bar with spaghetti, ravioli, rigatoni several types of pizza. Our Hog Heaven features separate stations for fried chicken, hamburgers, baked potatoes, assorted salads, vegetables (not too many vegetables!!) and of course, dessert. . . . Lot’s of desserts.

Just driving by this place makes me reach for my Lipitor.

However, the real action is not so much the food, but rather the patrons. Believe me, these folks fully understand the waste of conveyance. Their little plates are stacked high with food. Apparently, the goal is to limit the number of calorie wasting trips through the serving area by piling as much food as is possible onto the little plate.

You will see plates with a nice bed of pancakes supporting a porterhouse steak, which serves as a foundation for several slices of pizza held in place by a mountain of mashed potatoes containing a crater of tomato soup. Lying on top of the potato mountain will be a slice of apple pie and a side of baby-back ribs. Finally, a glorious crown of chocolate ice cream, whipped crème and maraschino cherries top everything off. Any empty areas between the various courses of the meal are filled with Jell-O salad, which serves as a kind of cement to hold the towering structure together.

The patron will head for the nearest available table comfortable in the knowledge that further energy depleting trips will not be necessary because the 5,000 calorie self serve banquet crowded on the single little plate will satisfy even the most massive appetite.

Contrast this model of caloric efficiency with the traditional restaurant concept.

The hungry patron enters the restaurant and requests seating from a host. After a period of waiting, they are escorted to a table where they are seated.

After more waiting, a waiter brings them water and provides them with menus. Then . . . more waiting. The waiter returns and takes their order.

A few minutes later, salads appear; again brought by the waiter. After a few minutes, the salads are finished the waiter removes the salad plates, soon replacing them with soup bowls. Another trip is spent removing the soup bowls and then bringing in the entre. This repeated through all the courses of the meal. Plates and food are moved multiple times from the food preparation area to the eating area and back.

Some folks probably find it difficult to get full with all the waiting between courses. Also, consider the multiple trips between the food preparation area and the table. It certainly isn’t the model of efficiency found at Hog Heaven.

Unnecessary conveyance in the manufacturing process may not be as obvious but the result is the same. The unnecessary transportation of work in process, people and/or machines involved in the manufacturing process or of parts and supplies can add up to a devastatingly large hidden cost.

With supply chains extending to all corners of the planet, conveyance is an unpleasant fact making it doubly important to make sure that any conveyance is indeed necessary. Keep in mind that conveyance can be wasteful over miles or inches, it’s not just the distance, it’s the movement itself. It can be wasteful over days or seconds.

It’s the human involvement in the unnecessary movement and the time wasted moving, removing and moving yet again. Even the smallest movement multiplied over hundreds of production cycles will add up to a huge number.

Once identified, eliminating unnecessary conveyance can be as simple as redesigning the workspace or layout of the shop floor. It may mean relocating production facilities to a location in better proximity to suppliers or distribution channels.

It can also be very complex involving re-sequencing several production processes to reduce the movement requirements of WIP. Perhaps embracing a cell based process versus the tradition linear production flow.

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* There is no such thing as a “one size fits all” ERP system, since each should be tailored to the needs of the individual company.

* For many, risk mitigation is a priority in the ERP vendor selection process. This is a valid goal. Careful planning, clear communication rigorous vetting of candidate vendors is a good initial step in minimizing the risk of an implementation disaster.

* Realize that getting people to change how they do their daily jobs is the most formidable challenge in getting any ERP system successfully implemented. That’s why it is critical to have high levels of involvement in your company from the beginning.

* All products have specific strengths and weaknesses that are more dependent on your objectives than they are on technology.

* Most systems are either built to specialized needs or have evolved from a specialty application, meaning they are naturally stronger in some areas and weaker in others.

* Beware of any software vendor that says their suite of applications can totally fulfill all of the unmet needs your organization has for an ERP system. There is no perfect fit—every company’s needs are slightly different and customization is always required.

* You might need help. It’s fine to solicit help from a third-party consultant, but be diligent about who you choose. Be sure that they really are totally impartial, vendor neutral and objective. Many can bring certain biases or prejudices to the party.

* Beware of turnkey implementation promises. You should be heavily involved in the implementation so that you can be sure you will derive the value you paid for.

* Your final selection will more than likely come down to certain intangibles, such as your level of trust with one vendor versus another.

* Ask for several references in your specific industry, and then visit those implementations (if possible) in person to see how they are using the ERP system to attain their goals.

Finally, there is your team. Remember that an ERP system will touch or affect almost everyone in your company at some point. Almost every business function will need to interface with, be directed by, supply information to, or extract decision-support information from your system.

Your team will need representation from all areas that will be touching the system in their day-to-day activities. Their intimate knowledge of inadequacies and strengths with existing processes will be critical to your success. The teams and their respective departments need to have a high level of ownership in the design and rollout to ensure that the ERP implementation is a success. This is the only way you will overcome the resistance to change in your organization during the selection process. People have to trust the system to use it, and that’s much more likely to happen if the system is designed to fit their specific needs. Stay focused on unmet needs to make sure the implementation is as relevant as possible to the greatest number of people.

An important “first” on the team agenda is to identify what capabilities need to be prioritized, based on an assessment of unmet strategy and process needs within your company. This will help you with your first cut in the selection process and to prioritize vendors who can in fact meet these needs. Having a tight focus on the needs you are trying to respond to will enable you to quickly cut through all the whistles, bells, frills and glitz that are irrelevant to your organization’s getting to its goals. Avoid making requirements a “shopping list” based on whims and fancy rather than absolute unmet needs. Ensure you don’t have conflicting requirements.

Once you have established the basic system requirements, you will need to establish some budget parameters related to the overall costs associated with the new system. Keep in mind that your budget will need to cover more than licensing fees. You will also have training and implementation expenses. These two items can easily outstrip the licensing fees themselves.

This is an edited excerpt of “Making the Smart Choice — A practical guide to evaluating ERP systems and vendors.” To read the full paper, download the form here.

Images:

Working Together Teamwork Puzzle Concept by lumaxart

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During the introductions at the beginning of the first day, I introduced myself and told everyone that I worked for Cincom Systems, a software vendor offering ERP systems among other things.

The fellow running the seminar jumped right in at that point and let everyone know that you didn’t need ERP to implement lean. Actually, he was very certain about this. Upon reflection, he was downright emphatic if not aggressive in this belief.

I found this to be somewhat remarkable; I certainly had not suggested that ERP was a pre-requisite for Lean. I certainly wasn’t wearing my “Wanna buy an ERP System?” button.

Since then, I’ve written a couple of pieces on the relationship between ERP and Lean and participated in numerous discussions on this point. Lean and ERP are two different things and my seminar leader is probably right that Lean does not depend upon ERP to be successful.

Without getting wrapped up in the “who needs who” and the “what needs what” more thing, let’s agree that Lean brings great value to users of ERP. As more and more people, understand that Lean is not a formula for cost cutting or corporate survival, but rather a strategy to encourage growth and expansion, the role of lean becomes more important to the enterprise.

Here’s an example.

If we look at the evolution of the supply chain, we start with a couple of companies around town feeding supplies into a production facility located in a near by neighborhood. This has developed into a web of many inter-related firms spread around the world all set to produce product in an intricately timed dance that feeds the downstream production process at precisely the right time and in the exact right quantities ultimately ending with finished goods in users hands.

Expecting your ERP vendor to spread their reach from your shop up and down your supply chain is not a realistic solution. To fill this void of expertise and functionality, a new breed of company, Lean specialists, have evolved. Last week, Cincom Systems announced a joint marketing agreement with Ultriva, a purveyor of lean execution tools who has decades of experience in the area of supply chain synchronization of complex processes.

This is great news for users of the Cincom Control ERP solution, particularly those with multiple site requirements. The Ultriva Lean Execution Suite provides an array of functionality that extends from the supply end into the factory and right out to the customer whether an end user or OEM.

This is a level of functionality not available from within the typical ERP solution.

The Ultriva solution provides electronic Kanban loops from the suppliers of raw material in concert with MRP functionality into the lean enabled factory. Work in Process is effectively managed between cells within the facility. Finished Goods are shipped to OEMs, distributors or customers with total control maintained by the Lean Execution Suite.

Since this is what Ultriva specializes in, Cincom customers will work directly with Ultriva personnel to assure total integration of the technology into the ERP system and the production systems as a whole.

Ultriva offers their Lean Assessment Tool to prospective users. This useful utility allows prospects to calculate potential savings using various Kanban parameters. A sort of risk free trial based on real life data.

This is clearly a win/win for users of Cincom’s Control ERP and for any company looking to enhance their operation through the application of Lean techniques. Ultriva is exceptional in its ability to define the financial implications of kanban decisions throughout a supply chain and manufacturing network.

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This partnership provides manufacturers with complex engineer- or made-to-order products—a solution that features intelligent, role-based operations management combined with proven Lean execution. “We believe this combination will provide our customers with the operational efficiencies required to meet the unique challenges facing manufacturers today,” says Jerry Miller, director of Cincom’s manufacturing business solutions division.

“Ultriva’s Electronic Kanban and other Lean manufacturing solutions have been working synergistically at Cincom customers over the years,” says Narayan Laksham, CEO of Ultriva. “By formalizing this business relationship, we can enhance the value to our customers with a pre-packaged, tightly integrated solution.”

“Cincom’s operations management capabilities and Ultriva’s Lean execution solution are a natural fit and complementary on both the business and technology levels,” says Dick Pearse, Cincom enterprise product director. “Alliances are successful when the combined value delivered is greater than the sum of the parts. This passes that test with flying colors.”

About Ultriva
Ultriva’s Lean Execution Suite consists of modules like Customer Kanban, Supplier Kanban, Internal Kanban, SBR, Lean Production and OEE, which allow manufacturing companies to systemize, sustain and scale Lean disciplines across the organization. Ultriva’s flagship product, Collaborative Electronic Kanban, eliminates stock-outs while reducing inventory levels up to 75%. Ultriva modules are in use in more than 130 plants worldwide, incorporating more than 5,000 suppliers and transacting over 1.5 billion dollars of inventory at industry leaders such as AGCO, CNH, Emerson, IR-Trane, McKesson, Rexnord and ThermoFisher.

Look here next week, were we’ll give more details on what Ultriva offers Cincom’s manufacturing customers. Stay tuned!

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