This week, I remembered answering a set of questions during 1995, if I am not wrong, from the book “The Executive’s Guide to Successful MRP II” by Oliver Wight. Our CFO handed over this book and asked me to answer the questions from my perspective to plan out my strategy after I was given the task to head a project team to implement MRP II, the earlier generation of today’s ERP.
You may also want to answer a similar updated 3 min ERP Benefits Survey.
The answers I found were very shocking when it came to the gaps we had, in comparison to the best-in-class. As a result, I got my team to develop a ready reckoner describing the intention and impact of each and every data field in the master data. I wanted every user to be aware of the consequences of the data they enter, so that they can exploit, enjoy, and benefit from MRP II, as if it were a radio, by tuning the master data to their satisfaction. After I moved on to a different role, I heard that this document was being used for many years.
I remembered this last week while visiting a couple of companies, who were very advanced in holistic data capture through bar code readers, biometric scanners, and a host of sensors, for tracking and control. This was really a world class solution at work, especially when I compare others, even today having huge gaps in capturing relevant, correct, and real-time data.
Let me start from the top and then drill down. Today with blockchain technology, information across companies can be seamlessly exchanged with security, for process control across companies. I am sure the techies may have other better ideas than blockchain!!!
Within a company the ERP today is very good for process control across departments. I assume that today, after 25 years of me getting users to manage master data well, most of the companies must be having correct and up-to-date master data in their ERP, and exploiting, enjoying, and benefiting from ERP.
Drilling down to within a department, I want to briefly go through the various elements for efficient and effective tracking and control by capturing relevant, correct, and real-time data. These elements surely are all the key drivers for reaping all the benefits from an ERP, in case you were not satisfied with your answers in the 3 min ERP Benefits Survey.
- Instructions/SOP: Standards are essential for sustainable improvement. I believe most of the companies are pretty good at this due to the propagation of ISO systems. Of course, the practicality of these instructions may have to be validated, in some cases.
- Value Stream: The steps in a value stream, be it a product or a service, is well defined too. In some cases, a rhythm may have to be created and established.
- Inspection/Check: Even though it is obvious that we must always inspect what we receive, check our job, and inspect the output before passing on, one can always find some steps where this basic principle is not followed formally.
- Process Control: This is the decision making at the lowest level of any organization. Two key decisions: 1) Pass the baton or not and 2) Start or Stop. Today there are various solutions available, especially from lean manufacturing, to naturally aid this decision making.
- Documentation: In my experience every employee, will document his/her decision with remarks promptly in a form that is provided, in a ledger, or a logbook. This element in the technology landscape of any company is extremely important to work with meaningful real-time data. Most of the times, this data is in written form and not easy to be digitized. Of course, today there are easy solutions to directly record this data in a device, some of which we have implemented.
- Manual Input: In the brick-and-mortar industries like, construction and manufacturing, it is very common to input the data from the earlier document either to a local drive or to a cloud server.
- Data Processing: Locally, Excel is normal and ERP in cloud server. Excel is really a great way to quickly analyze the data but is not useful for continuous trend monitoring and for establishing correlations between metrics being stored in different Excel files. ERP data base is good for data processing and analyzing. However, but for analyzing financial data, usage of ERP for continual improvement by analyzing operational data for efficiency and effectiveness, is rather low.
- Process Report: eMails with enclosed Excel files are common for locally managed data. In many cases, a download from ERP in Excel is sent out as an enclosure in email too. Some send out links to real time dashboards and scoreboards on the cloud servers. Very few have huge touch screen scoreboards in their workplaces to check out the real-time reports from their ERP.
- Routine Review: The world class companies that I know of, normally conduct standing daily reviews based on the reports generated from the process data, and as an outcome of their decision making, the Instructions/SOP get updated for a better performance.
In my experience, issues in the four elements – manual input, data processing, process report and routine review, apart from the master data not being correct and up-to-date, are the reasons why companies do not reap the full benefits of ERP.
As usual I will end my blog with a quote by Wayne L Staley:
“A company may employ the most sophisticated software in the world, but unless information is managed, timely, accurate, and complete, the system serves little purpose.”
How is your information managed?