Let's focus on a group of customers who, in my opinion, are getting a raw deal; there's a good chance you're one of them. The people I'm talking about are those who work in manufacturing companies — in departments like sales, marketing, operations, purchasing, production and distribution. These people are customers for information. They use information to make decisions about running the business — day to day, week to week and month to month — decisions such as when to ship orders, what products to run when, what materials to buy, how much stock to distribute, etc.

The raw deal they're getting involves enterprisewide resource planning systems. Many companies are spending enormous amounts of money attempting to implement these systems, but few are doing it successfully. These initiatives usually begin with great expectations and high hopes, but during the implementation — as deadlines are missed and schedules slip — the emphasis shifts from "giving the people better tools with which to do their jobs" to "let's get the software running so we can cut over the old system, and we'll worry about that other stuff later." The result is predictable: disappointment, frustration, finger-pointing and a feeling of having spent lots of money for little in return. One manager who just went through this paraphrased Winston Churchill: "Never have so many spent so much money and effort for so little benefit."

What's Wrong with this Picture?
What's wrong is focus. It's on the software, and that's the least important part of the whole thing. Now it may sound strange to hear the software called the least important, because software is what we're talking about. It may, however, make more sense after we look at the ABCs of implementation:

• The C item is the computer — the software and hardware. It's essential. You have to have it, but it's the element of least significance overall.
  
  
• The B item is the data — the bills of material, the inventory records, the routings, etc. No one has repealed the law that says "garbage in, garbage out." The greatest software in the world won't work well with bad data.
  
  
• The A item is the people — far more significant than the others. The successful implementation of these kinds of systems lies almost totally with how well the people issue is handled.

But — some of you may be thinking — in our implementation, we didn't neglect the people. In fact, we spent enormous amounts of time on training. My response: You probably spent too much time on training and not enough time on education. Training is about how to operate the software; education focuses on how to run the business. You need to do both. See Figure 1.

If people are taught the defined body of knowledge that deals with resource planning (MRP II, BPR, ERP), they will more likely understand the intent of these tools, how they fit together, and how they can help the company operate far better. For example, people need to make the connection between bill of material accuracy and shipping on time, and it's education that enables them to do that. Most would agree that this is far more significant than learning which mouse buttons to click to enter a bill of material change into the computer. If they make these higher-level connections and are given the right leadership, people will enthusiastically go to work fixing the bills, cleaning up the routings and getting the inventory records to extremely high levels of accuracy. Materials to support resource planning education exist within the APICS body of knowledge and elsewhere.

Is the Software Faulty?
The software itself is almost never the problem. Most of the major packages are based on the standard logic in our field — the APICS body of knowledge — and contain modules for customer order entry and order promising, master scheduling, material requirements planning, distribution planning, plant and supplier scheduling, and so forth. These pieces all fit together very nicely and, when used properly, can sharply improve the company's ability to ship on time, lower inventories, purchase and produce at lower cost, and more. But, the software tools must be used properly and fed accurate data, and they must support the strategic direction of the business.

What to Do?
First, let's recognize that things probably won't change. I'm afraid that most companies will continue to focus on the C item and pay insufficient attention to people and data. There are powerful forces driving this focus on software, one being the Year 2000 problem, which is the systems equivalent of the 800-pound gorilla. Another factor is globalization, and a third is the existence of wonderful hardware — ever more powerful and ever cheaper. Given this, I offer the following suggestions:

1. Play the hand you're dealt. Recognize that these are software-centered projects. There's not a lot you can do to change that, especially if your company has already started down this path.

2. Recognize the difference between installing software and implementing superior business processes. Installing software and converting from the old system(s) to the new can be a real challenge, particularly in view of the complexity of many of today's enterprisewide systems. Implementing superior business processes is also very challenging, and I've concluded that it's highly unlikely that a company can do both at the same time. I haven't seen it happen yet in today's environment.

3. When installing the software, make as few modifications as possible. This will accomplish several things, including a lower cost. Some companies have spent sizable sums of money to tailor and modify the basic system. Most often, the requests for heavy modifications result from people not understanding how the overall resource planning process works because they didn't receive the proper education. Thus, they attempt to replicate today's processes into the new system. This almost always results in a weird set of software which does not match the standard body of knowledge, nor does it reflect how the business is being run today.

4. After the software is installed and operational, go to work on implementing better business processes. Recognize that it's highly unlikely you can do them both at the same time. Look upon the software installation — building the framework for the better processes — as Phase I and the implementation of the superior ways of doing business as Phase II. Here's another reason for not modifying the software much: Your work in Phase II will be easier if you're using clean software.

So how should you go about this? How should you go about implementing these better business processes after the software has been installed? Well, tune in next month when we talk about an implementation approach called Quick Slice.

Copyright © 2020 by APICS — The Educational Society for Resource Management. All rights reserved.

Web Site © Copyright 2020 by Lionheart Publishing, Inc.
All rights reserved.


Lionheart Publishing, Inc.
2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA
Phone: +44 23 8110 3411 |
E-mail:
Web: www.lionheartpub.com


Web Design by Premier Web Designs
E-mail: [email protected]