Case Studies
CONQUERING ERP IMPLEMENTATION
Enterprise Resource Planning (ERP) has been a god-send or a nightmare for organizations attempting to transform their information and communications systems.
Studies suggest that 50% to 75% of implementations do not meet expectations, including: not meeting objectives; not achieving the projected benefits; restarting with a new software vendor or consultant; or failure. Causes for failure form a long list—many people related—but typically include not knowing if the organization is ready for ERP and not ensuring the culture will support it
ERP success most often occurs when the people who will use the system are brought into the project from the beginning and given meaningful opportunities to understand the tools and plan the implementation. A climate of openness-to-change coupled with trust and transparency yields the best transformation results. We saw this clearly with one of our customers.
One customer’s story
MGRD initially provided designer glass inserts for exterior doors. Their tracking software for inventory, shipments and billing was developed inhouse. When the company opted to manufacture their own doors the existing software couldn’t support the effort.
Although hundreds of off-the-shelf production control systems existed, the business owners decided to save the money and create one inhouse. Their IT team modified their existing inventory control system, adding some features that allowed manufacturing to use work orders and labels but requiring a great deal of spreadsheet work to determine actual schedules and shipments.
For several years, one plant manager persisted in trying to educate this inhouse team about the real needs of the manufacturing side. He had several IT team members visit frequently and walked them through the process of making parts, highlighting the information needed at each step. He coached them on the need to create bills of materials, warehouse picklists, production schedules, and the necessary paperwork to accompany the physical parts through the plant to the shipping department.
The result was a system that was cumbersome to use, and subject to error because so much manual work was still required for processing.
The plant manager had the active support of his entire team, who knew they needed better tools and ideas, just as the production and warehouse people had.
Partnering with Strategia Analytics confirmed direction
At this point the plant manager began using Strategia Analytics to assist in implementing the necessary culture change for establishing a Lean manufacturing process. The result was a Lean philosophy embedded in the mindset and behaviors of the production and warehouse teams. Adopting the improvements that came with this exposed additional flaws in the already inadequate computer control system.
The Lean improvements in this plant had led to cost savings and expansion opportunities that made the plant the company’s most profitable by a wide margin. Strategia Analytics’ DnA® Assessment showed that the Back Office supported the management effort to upgrade the system. It indicated that staff were clear on the company’s overarching aspirations and its expectations of them, as well as showing a high level of customer focus, strong relationships with supervisors, and a strong connection to the company.
With this strong support behind him, plus that of the Finance and Customer service departments, the plant manager was successful in persuading top management to buy an ERP system, rather than continue with inhouse IT tweaking the existing system.
Understanding the benefits, they had been clamoring for the tools available through ERP. With their engagement, MGRD installed the system. The switch over to the new system was carried out with just two production lines called in and all of the back-office people present. They were able to make product, track inventory, create processing, shipping and invoicing documents.
There were some snags and glitches, but no show-stoppers. The team quickly found solutions and within a month ERP was showing all the benefits it had promised.
This ERP installation worked because the plant culture supported change and improvement. The people were already process-oriented, and had been trained to work together and solve problems within and between departments. The Strategia DnA® survey taken just three months after the successful ERP start-up indicated all of the cultural elements that MRGD had used to successfully implement Lean were still working through the ERP effort.