Starting your ERP project
Congratulations on selecting an ERP system for manufacturing. That was the first step. The next crucial step is a successful manufacturing ERP implementation to maximize your investment and streamline operations.
The real benefit of implementing an ERP system lies in integrating core business functions such as finance, inventory management, production and sales into a single, unifying platform that provides a business-wide view using centralized data. By implementing an ERP system, manufacturers can harness the power of streamlined processes and automation to reduce wastage and costs, improve productivity and increase communication.
An ERP system for manufacturing goes further than automating processes and workflows. It will allow your company to make complex and data-intensive manufacturing tasks, such as planning and scheduling and managing a Bill of Materials, a lot easier.
With centralized information sharing also comes greater collaboration between departments, reducing the problem of duplicated work. An ERP system can import and make use of other data such as that from IoT devices. With artificial intelligence tools and advanced analytics, manufacturers have the opportunity to use this wealth of data to extract valuable and actionable insights.
How to approach an ERP project
ERP project as a change project
Business owners need to have a framework to think through the ERP project. It is important to appreciate that implementing an ERP is a large-scale, disruptive change project. There are elements, or dimensions, of change that need to be considered in the planning, implementation, and ongoing operation of the ERP system. They are:
- The business processes that determine how the company does its work.
- The systems that automate and integrate individual steps and data in the process.
- The people who do the work and how they are functionally organized.
In most ERP projects, all three dimensions come into play in various ways. For example, changing the way a department works with an ERP system will involve the process and people dimensions, whereas creating new reports will only be the system dimension. Project decision-makers should be aware of how these dimensions are involved throughout the ERP implementation.
Objectives of the project
The key to successfully implementing an ERP for manufacturing is to focus on the business objectives that the system should deliver, not the technology.
Some typical objectives are:
- cost reduction by streamlining the business;
- process improvement to shorten product delivery time;
- more flexible and agile manufacturing operations;
- improving tracking and traceability to ensure regulatory compliance;
- real-time data access and better reporting.
The key questions for primary decision makers are: what are we trying to achieve with the ERP, and why do we want to do it?
Steering committee
An ERP project needs a steering committee which is the highest level of authority for the project. The committee is responsible for:
- commitment of project resources in terms of money and personnel;
- monitoring the project’s progress and its impact on the organization;
- empowering the project team, and specifically the project manager, to make decisions;
- resolving issues that have been escalated;
- confirming major decisions such as go-live and the completion of project deliverables at the end of the implementation project.
The project manager
Because an ERP project is a large, complex inter-organizational endeavour, it requires a dedicated, experienced ERP project manager. The major responsibilities of the project manager should include:
- overseeing the design and implementation of processes;
- managing and tracking project progress;
- ensuring the project aligns with objectives;
- managing the project scope;
- allocating budget and resources;
- understanding and mitigating risks;
- ongoing communication with all internal stakeholders;
- setting and managing expectations;
- planning and coordinating testing and training.
The project manager reports to the steering committee.
The project team
An ERP implementation is a business-wide project to unlock multiple benefits for various stakeholders — owners, employees, and customers. It’s crucial to have a team that is comprised of people from across the organization. A successful implementation will depend on the qualities and experience of the team, with the right mix of experience, technical skills and knowledge of the company’s internal processes.
Within the team will be process owners who have specific functional understanding and should be responsible for signing off on process changes.
The success of the ERP project will depend on the commitment of the people who use it. Because employees are the ones who will use the system the most, it’s critical to communicate with them early and often. Getting their commitment is an important step that shouldn’t be overlooked.
The steps of the ERP implementation
An ERP system for manufacturing is a highly complex, costly and often disruptive project that cannot afford to be done poorly or half-heartedly. Only once the approach and the organization for the ERP project is completed, can the next phase of the project begin — the implementation of the ERP system. This will be covered in Part 2.
