We are living in a world of change and uncertainty. In 2014, Harvard Business Review published research that showed that uncertainty has increased in the last 50 years, and that some industries are more affected by it. Of the top ten industries facing the most uncertainty, eight are manufacturing industries.
There is a military term now used by business to characterize the challenges of change - VUCA - which was discussed in a previous blog post. VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity. Another acronym (also originating from the military) provides guidance on how to deal with a VUCA world.
ERP projects touch all aspects of a business. Small- and medium-sized companies can typically only afford to have one person do most of the research and that person usually ends up having the most influence over the selection.
Unfortunately, this scenario often results in missing opportunities to make other departments more efficient, as the person doing the research rarely knows the most pressing business problems in the other departments.
In my days as an ERP sales consultant, I had first-hand experience on how customers went about selecting and implementing ERP software. Here are some suggestions based on seeing projects that failed and succeeded, and how the successful ones started.
Those that know me well, know my reputation for being “the lady with the laptop.” There are numerous photographs of me with the laptop seemingly surgically attached: the middle of a field on Scout Camp, whilst washing clothes on the Serbian Scout Jamboree, even in my Wedding Dress. When K3 Syspro took part in the UK National 3 Peaks Challenge, my laptop came too; if I go away for a weekend with the kids, the laptop is the first thing in the car.
Having been in the IT industry long enough to remember when the idea of "ERP" first started making the rounds, I have watched with some fascination the struggle that organizations go through to decide how to justify an enterprise solution strategy. At the same time as a business owner or manager decides they must acquire the latest automated machinery with the belief that it will improve the business; often a decision about enterprise software is put on the back burner because the cost seems higher than anyone knows how to explain in the context of the overall business. Although it is obvious that I'm biased on this discussion, there is often a compelling case for understanding your business inputs, processes and outcomes more fully that is ignored, and opportunities to make the business function better are passed up.
business process improvement,
As we head towards a new year, I have been having a number of conversations with work colleagues and ERP consultants on the subject of KPIs (Key Performance Indicators) and their effectiveness. Out of these discussions it can be concluded that there are good and there are poor KPIs.
Wearing my ERP hat a good example of this is looking at the role of a Purchase Order clerk. A logical metric to ensure they are performing and doing a full days’ work could be to measure the number of purchase orders and purchase order lines they capture in a day. In most environments this would be a poor KPI, as that could lead to more stock being ordered than you need at any one time, resulting in tied-up capital. A good KPI for a purchasing clerk could be the price they are paying for goods, as it will indicate if they have negotiated a good deal on behalf of the company.
I have never been a ‘gamer’ – in my definition that’s someone who spends a significant amount of their leisure time playing video games. My husband, on the other hand, is an avid gamer – so much so that one of his groomsmen got us an X-Box One as a wedding gift! This got me wondering if I am missing something – why do people escape to these virtual worlds and how do the games keep them interested and coming back for more?
In her TED talk ‘Gaming can make a better world’, Jane McGonigal provides some valuable insight into my contemplations – online video games engage and motivate gamers by providing:
Optimizing supply chain processes is essential for managing a business in the midst of a changing industry. A dynamic industry dictates that companies must re-evaluate their processes with a focus on operational efficiencies and strategic use of technology.
This is where it is imperative for enterprise resource planning (ERP) software to step in.
The packing industry in particular is characterized by constantly changing market conditions, technological advancements, relentless competitive pressure, seasonal and regional variations as well as fluctuating costs for both raw materials and business operations.
The disconnect between Sales and Operations in manufacturing companies is so common that it is almost a cliché. I’ve experienced it myself and I’ve met plenty of people at other companies going through the same struggles. Maybe you see some of this in your own company.
Sales perceives Operations as incompetent, unable to deliver the right products at the right time. Operations perceives Sales as unpredictable, overly demanding, and unreasonable. And customers are unhappy because they're being shorted.
Sales and Operations
I am a great believer in moving with the times and making sure that I use the most appropriate and up to date technology when delivering solutions to my customers. So I read with interest an article that mirrored my philosophy almost exactly.
I para phrase but in essence the article was warning against choosing ERP systems with ageing core technologies and modern flashy front ends. I couldn’t agree more. Where my views differ slightly is that I believe no single technology can cover all aspects of an ERP system and that it is essential to use a blend of technologies applying the most appropriate to the task in hand. I am also very wary of the next “latest and greatest”, our industry is littered with products written to the latest craze only to find the fashion has been dropped a year later.