A properly implemented enterprise resource planning (ERP) system can help any business incorporate information from across the enterprise into high-level planning that can propel them to the next level. Data is the fuel of modern business and ERP is the engine that can help your business maximize sales and income while cutting costs and waste.
Here are a two key ways you can make sure your ERP implementation avoids the common pitfalls that can cause ballooning cost, delays or other problems:
Prevent Scope Creep:
The leading cause of increased cost, complexity, and delayed implementation for ERP projects is scope creep. Scope creep occurs when project goals are allowed to become a moving target or when too many voices are allowed to contribute to the project. The easiest way to avoid scope creep is to make sure every aspect of the project, such project goals and implementation target dates, are thoroughly researched, planned and documented as far in advance of the project as possible.
Of course, you still must be open to small changes as conditions and requirements change during the implementation, which will require some flexibility. However, you must also resist the urge to do constant changes and course-corrections during implementation. A key part of this is to avoid the ‘many voices’ problem common to ERP implementations in which the many departments and individuals in the business all fight for a voice in the ERP system. Click here to read more about assigning effective ERP implementation teams.
ERP is an expensive proposition for any business, but you can control that cost. Work with your ERP vendor to identify realistic cost estimates for training, data migration, program modifications and consulting services.
Let’s talk about training specifically. Will your company use a train the trainer approach or will all designated employees attend training? Is education available via online classes or do you require an onsite instructor? What happens when an employee misses training or doesn’t commit to practice on the new system in a test environment? How do you retrain? How do you educate new hires? These are considerations for the project manager to evaluate when creating the training budget.
All of the previously mentioned training approaches have successfully worked for companies but the cost of each will vary. The project leader needs to determine the most appropriate training techniques for the culture of their company. Additionally the project leader must think through the processes for other areas of service required. What is needed for data migration? Will the software meet the company’s requirements or are modifications required? What additional services are required for a successful implementation? Once the project is underway, you will need to monitor the project to make sure costs are contained and avoid any unnecessary changes.
Contact us for more information on how our team at ERP Solutions can help you make the most of your ERP implementation. We are a full service provider and our experienced staff can help assess all your needs from software to training and support. Give us a call at (440) 498-9920.
As a small manufacturer, you may be wondering if you can benefit from an enterprise resource planning (ERP) solution. The answer is simple: if your business can benefit from data integration across disparate departments such as manufacturing, shipping and receiving, human resources, and finance, then you can benefit from ERP.
Let’s take a look at why ERP is important, and how it can help manufacturers of all sizes. At its most basic, manufacturing involves taking in raw materials, and turning them into a product. This process needs staff to make it possible. It also needs a sales force to sell the product, and process the order, a purchasing staff to procure and receive the raw materials, and logistics personnel to ship out the finished product. And overseeing it all you have management and finance.
How are you currently handling raw material acquisition? Is your raw material purchasing attuned to demand so that you have exactly what you need when you need it without excess materials taking up valuable floor space and funds? What about manufacturing, finished goods inventory, and shipping? Are your products quickly flowing from shop floor to customer?
Using ERP to link together information -- from sales to raw material purchasing to manufacturing -- means you can plan to have exactly the raw materials you need, when you need them, and in the right quantity. By linking together production numbers and product demand, you have the right information you need to plan production schedules and to keep production on track to match demand. By linking this information with staffing information from human resources, you have the ability to schedule the right number of workers when you need them so that you are able to get your production numbers right.
In this way, data integration makes your company leaner, more competitive, more flexible, and more responsive to changing customer and business needs. In fact, many small manufacturers who have implemented an ERP system report a two to five percent increase in profit margins. In addition, they also report a 40 to 60 percent decrease in inventory, and a 10 to 20 percent increase in on-time performance.
Small manufacturers often operate on a razor-thin profit margin that can be easily erased by something as simple as production errors, changing market conditions, surplus stock, or inability to meet customer demand. For those manufacturers, a five percent increase in profit margins or fifty percent decrease in funds tied up in excess inventory can spell the difference between success and failure of the business.
At ERP Solutions, we can help you make the right decisions on ERP that can help grow your small manufacturing company far beyond where you are today. The future belongs to the prepared, and the prepared are using ERP solutions to make the most of their bottom line.
Contact us today to see how we can help.
Mary Jo O'Neill