“ERP failure” is a pretty dirty word when it comes to ERP systems, but there are plenty of lessons to be learned from missteps and stumbles experienced during ERP implementations.
When it comes to process manufacturing ERP implementations, there are plenty of lessons to share. Process manufacturing entails making something that is recipe-based, not easy to take back apart and typically measured in weight or volume. Examples include manufacturers of food, beverages and chemicals.
Process manufacturers are often times more complex than the average organization, simply because their products can be harder to plan for and because of regulations unique to those industries. Given these complications, the risk of failure can be high. Even for those that are not in this industry, there are plenty of lessons learned applicable to all industries:
Identify and focus on industry differentiators. Process manufacturers are in many ways completely different than other types of manufacturers and non-manufacturing organizations. For example, they often deal in more complex units of measure, which can make planning, purchasing and manufacturing more difficult than a manufacturer of widgets. Whatever the differentiators for your industry, they are likely to be important areas of focus during your ERP selection and implementation process. A laser-focus on these unique aspects of your industry will ensure that you are able to select and implement the ERP system that best fits your organization’s needs.
Clearly define business process reengineering opportunities. Once you are aware of these industry differentiators, it becomes important to focus your business process reengineering and workflow definition activities on these areas. For example, your accounts payable process may not be overly complex or require an abundant amount of focus during your selection and implementation, but your planning for purchasing recipe-based raw materials may be more likely to create complications during your project. It is important to understand that these unique aspects of your business are more likely to require attention throughout the selection and implementation phases of your ERP project. In addition, these processes should garner a great deal of time from your organizational change management team as well.
Manage the risk of operational disruption. Organizations that are unique in nature or are part of a unique industry (such as process manufacturers) are more likely to encounter operational risk at the time of go-live. For example, our 2018 ERP Report reveals that roughly half of all organizations experience some type of material operational disruption at the time of go-live, such as not being able to ship product or close the books. These numbers are even more concerning for process manufacturers and industries with relatively unique operational complexities, so it is important to be cautious by not holding too firm to go-live dates, managing budgets too tightly or not allocating enough resources to the project. While you may never reduce the risk down to zero, you can certainly do better than 50/50 odds by avoiding some of the common mistakes of other organizations.
Every organization in every industry has its own unique challenges and complexities. Whatever your specific industry challenges may be, it is important to recognize and focus on them during your ERP implementation. Too many organizations treat all business processes equally, but these more complex operations are more likely to make or break your project.
Learn more by scheduling a free 30-minute consultation with one of our ERP experts.