September 30, 2010

ERP Benefits - For Manufacturing & Distribution Industry

1) Automate & Streamline Business Processes with Greater Adaptability
  • Align key business processes in planning, design, development, procurement, inventory, manufacturing, sales & delivery
  • Match overall supply with demand and manage all resources & assets along the entire value chain
2) Respond quickly to Changing market conditions
  • Use integrated, real-time sales & operational information to accurately anticipate, plan for & respond to orders and new demand, as well as reduce forecasting errors
  • Model production capabilities, quickly share engineering information & adjust product mix for changes in demand to capitalize on new opportunities
  • Support compliance with regulatory requirements, including safety & environmental regulations, by quickly validating manufacturing processes while conforming to individual markets requirements
3) Decision Making on Strategic Business Insight
  • Rich out-of-the-box analytical performance measurement tools hone the strategic planning & monitor the overall health of the organization
  • 360-degree visibility on accurate forecasts, effective budgets, proper resource allocation & goals
  • Combine operation & financial analyses to optimize day-to-day operation
4) Enhance Customer Satisfaction
  • Delivering products on time with high quality
  • Faster time to market, higher-quality products & accurate information provided to customers
5) Improve Productivity
  • Collaborate across business functions to consolidate information, align strategies & standardize operational processes
  • Increase information worker productivity through realistic, appropriate business roles
  • Increase adaptability to process changes by enhancing existing skills & assets with real-time information
6) Fuel efficiency & Reduce risk across the entire organization
  • Standardize processes & easily share best practices
  • Support multiple manufacturing modes & a hybrid or mixed-mode environment
  • Reduce time across the Order Process Cycle (Quote-Order-Delivery) there by reducing the loss risk
7) Gain insight into Costs & Process efficiency
  • Analyze & manage production schedules with reporting tools & “what-if” scenarios, including capacity loading, shop floor activities & production costs
  • View real time client, contract & project details for an accurate accounting of profitability
8) Manage Demand Pro-actively
  • Trace expected to actual sales & forecast future sales while taking into account seasonal & promotional effects
  • Use simulations, demand models & error analysis to determine optimal stock levels for better profit & operations margins
9) Expand Sales Success
  • Monitor market demand & meet margin objectives through effective promotions
  • Increase capacity to evaluate product turnover in response to campaign & align production & inventory accordingly
10) Improve Customer Service
  • Enhance the security & reliability of deliveries with the global available-to-promise (ATP) view, which provides delivery alternatives in the event of unexpected disruptions
  • Automate sales & purchasing processes, track & locate inventory items quickly & help ensure accurate pricing & discounts to improve customer satisfaction
  • Deep visibility & control over the supply chain, increase order fill rates, reduce risk of stock out or inventory excess & enhance overall responsiveness to customers
11) Increase Revenue
  • Higher profit margins by automating & streamlining all business processes resulting in reduced operations costs through adherence to better business practices
  • Improved cash flow by more efficient & accurate billing procedures, lower inventory levels & quick turnaround
  • New opportunities identified through continuous, real-time monitoring of KPIs
  • Opening up new sales channels like e-commerce
12) Reduce Operating Costs
  • Decreased overall operating costs by converting time-consuming manual processes into automated, streamlined, real-time business process management
  • Lower transportation costs through consolidated orders & combined shipments
  • Reduced warehouse costs from optimized utilization of resources & assets
  • Reduced cost of sales from use of profitable sales interaction channels
  • Sustained cost savings for all spend categories due to a standard approach to both strategic & operational procurement
  • Reduced IT costs because administration & usability have been improved, fewer interfaces are used & IT resources have been freed up to focus on value-adding strategic projects
  • Lowered TCO (total cost of ownership) by leveraging technology for facilitated exchange & interoperability with non-ERP systems
13) Increase Visibility & Simplify across the Supply Chain Process
  • Empower users with real-time data through a user-friendly interface & Role centre that provides access to tasks & critical Business Intelligence data such as KPIs & custom reports
  • Exchange data across multiple systems & gain visibility into business processes to improve decision making & control at every level of the supply chain
  • Connect inventory, production, purchasing & sales processes to gain accurate, real-time view of the entire supply chain.
  • Improve collaboration with trading partners with support for a wide range of predefined XML business documents
14) Reduce Cost by optimizing supply chain processes
  • Improve productivity, adapt internal processes quickly to meet new demands & optimize processes across sites in the supply chain
15) Better Collaboration with all Supply Chain Partners
  • Enhance collaboration among departments, customers, suppliers, business partners for a significant improvement
  • Integrate partners of all sizes to release data throughout the chain that’s accurate, complete & available up to the minute
  • Costs reduced, processes speed up & smooth flowing operations throughout the supply chain
16) Demand Driven Supply Chain Approach can help
  • Maintain competitive edge
  • Integration of supply chain processes with other business processes e.g. Sales & Operations
  • Respond effectively with a comprehensive, cross-functional view of the company, better understanding of customer needs through downstream data analysis & effective collaboration between trading partners
17) Control & Streamline Inventory
  • Use powerful inventory management tools to improve forecasting & planning, match supply with customer demand
  • Create sales & purchasing forecasts based on specific items & time periods
18) Meet Complex Inventory requirements
  • Create multi-dimensional inventory records & track items throughout the supply chain for online & accurate inventory status
  • Enhance Material & Product Traceability
1) Implement effective recall procedures & maintain complete forward & backward traceability of any material
2) Track materials from purchase through production & sale with lot & location control

Integrate Design innovation into Manufacturing
  • Shorten time to market for product innovation by integrating design & manufacturing processes & collaborating effectively with suppliers, partners & customers
20) Support a wide range of Manufacturing processes & Business models
  • Tailor the solution to serve make-to-stock, make-to-order, assemble-to-order, configure-to-order, & engineer-to-order environments
  • Manage items from design through assembly, testing, shipping, installation & maintenance
  • Meet specific customer needs by configuring build-to-order items easily & effectively
  • Help efficiently produce & deliver products that follow custom formulas or recipes & take full advantage of manufacturing & supply chain capabilities
  • Empower to streamline, monitor & control the entire production cycle
21) Improve Project management for customized orders
  • Create estimates & quotes quickly & accurately
  • Forecast machine & resource requirements for strategic scheduling & precise delivery times by analyzing project cost & order processing time
22) Increase Productivity with a Role-Based Solution & Centralized Information
  • Provide empowering self-service & role-specific information that increase user productivity
  • Personalize portal to meet business users specific needs
  • Manage centrally the critical documents (e.g.) BOM, routing data, CAD designs, recipes, project plans & item information
23) Streamline Integration with Web services
  • Improve integration within & Outside the organization by using a flexible Web services framework
  • Maintain high production levels & on-time delivery rates by sharing portal-based, real-time information about specifications, order status & quality control testing among key departments & trading partners

ERP Project - Key Sucess Factor 1: Top Management - Support & Commitment

Senior management support & commitment is one of the major critical success factors for ERP projects.

We'll try to understand this through some scenarios below:

Scenario 1: The ERP project team (Client & Vendor level) has been finalized and the project has started. One month later, your manufacturing head pulls out one of the team member for a QA initiative, just as you’re in the midst of product orientation / training & business requirement mapping discussion with the implementation team. Next month, a key Finance person vanish for an internal audit. Such changes would drastically impact the original plan and we'll be trying to catch-up to get back on track rather than being top of it.

Committing the planned resources available for the ERP project is one of the ways to show the top management support & commitment, which would help the ERP project Implementation to be successful.

Scenario 2: The ERP project team is finalized and the project sponsor (CFO) agrees to attend the steering committee meeting on a monthly basis. But he is not available for the first review meeting itself and asks the finance manager to attend the same. By default, the finance manager starts attending all the steering committee meetings.

In a normal circumstances, it is very difficult for the finance manager to envisage objectives & criticality of such an ERP project, with which the project has been initiated by the organization's top management (in this case the CFO!). Also, the finance manager might not have the authority to take key decisions on committing resources, business rules, investment etc., So effectively, the steering committee review meetings also become project review meetings which cannot take any decisions on time.

Delegating such tasks on an ERP implementation to lower management levels (who neither have competency nor authority) often results in
1) Delay in decision making
2) Missing deadlines
3) Lost sight of big picture!
4) Lack of team work

Top management support & commitment provides the following for the ERP implementation project:
1) Strong project leadership, as they set the direction & strategy for the company
2) Accomplish the project objectives & aligning these goals with strategic business goals
3) Puts the business first & uses technology as an business enabler and not vice versa
4) The business direction of the project, and creates the strategic imprint through active participation
5) Executive participation in an IT project creates visibility within the company that the IT initiative is important.
6) Compels the implementation vendor to put their best resources for the projects. The vendor's resources competency & expertise visibility to the top management has a strong bearing on the current project success and for provides scope for future business opportunities.
7) For IT Champions (CIO, IT Director, VP IT, IT Manager etc), involving top management participation for such projects, would help them to ensure that their expectations are met and would also enhance their career prospects!

ERP Project Implementation - Key Sucess Factors

Starting to share very interesting experiences & lessons learnt during my past 12 years of IT consulting experience in managing various ERP / SCM / CRM / BI projects across the globe.

Key Success Factors for an ERP Project Implementation are:
* Top Management Commitment
* Clear Goal Setting & Budget Planning
* Good Project Team - Client & Vendor
* Change Management
* Business Process Re-Engineering
* Effective Project Management
* High Communication Standards
* Scope Creep Management
* Data & Approvals on Time
* Education & Training

Let us go through every key success factor mentioned above in a detailed way!