The manufacturing industry has long used ERP systems to provide order and efficiency to their everyday operations. Though recent signs point to growth in manufacturing in the U.S., most shops are still operating as leanly as possible, which means their ERP software must not only be utilized effectively but also offer a strong ROI. However, there are issues that prevent some manufacturing companies (and indeed all companies) from achieving the returns they need — and expect — from their software. Chief among these are inadequate standardization across different sites, inadequate end-user training and the propensity for workarounds.
Inadequate Standardization Organizations are best equipped to take advantage of the benefits of manufacturing ERP systems when they have as much standardization as possible. While this often proves difficult in companies that have grown through acquisition, it is critical to de define and analyze business processes and create an ERP business blueprint in order to identify areas for standardization prior to ERP implementation. (While this can be done on the back-end, it is best practice to have this process in place prior to ERP software selection in order to find the best match for the “to be” business processes.)
Inadequate end-user training. Manufacturing companies rely on the data in their ERP systems to forecast, plan and schedule as well as track production to ensure quality standards are met. If end-users are not trained well enough to input correct data, or if they don’t understand the implications of entering misinformation, then a wrench is thrown in the whole works. And if those in the back-office have a reason not to trust the data being entered on the floor, then much of their day will be spent confirming information through hand-counts or other manual processes — a clear waste of both time and money.
Propensity for Workarounds. None of the points above are limited to just manufacturing environments, and sadly neither is the propensity for end-users to find any means necessary to avoid full ERP system adoption. Whether it’s pulling data out to manipulate in Excel or some other program, building homegrown systems to supplement what they find lacking in their enterprise software, or simply “not finding the time” to master the system, employees frequently come up with new and unique ways to justify workarounds. It takes determined oversight and constant communication from upper management (strategies for which should be included in an organizational change management plan) to combat this foe.
I don’t mean to be picking on manufacturing companies; as I said, these issues can be found in every industry. Manufacturing, however, has taken some serious economic hits in the past few decades and has much less of a margin for error than other industries. I sincerely believe that if many of these companies took steps to ensure that their manufacturing ERP software was being used to its full capabilities, it would herald a new era in our country’s ability to compete, provide jobs and create wealth. Sure, it may not be that simple . . . but it’s a good place to start.
To learn more, check out recent articles and news related to manufacturing ERP software.