ERP
Enterprise Resource Planning
(Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organization's own software with varying degrees of effort, and, depending on the software, ERP modules may be alterable via the vendor's proprietary tools as well as proprietary or standard programming languages. An ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. The major ERP vendors are SAP, Oracle (PeopleSoft and J.D. Edwards), SSA Global (Baan) and Microsoft. Lawson Software specializes in back-end processing that integrates with another vendor's manufacturing system. Enterprise Resource Planning
Rebecca Gill, vice president of Technology Group International says:
"For almost twenty years we have had people ask for demonstration copies of our ERP software, so they may play with it at their leisure. For years we have said no and we've done so with good reason. An ERP package is an advanced system. It isn't Microsoft Office and it isn't an iPhone. You can't simply turn it on and expect it to run without training."
Why ERP is Vital to Productivity and Profitability
In today’s business environment, installing an enterprise resource planning (ERP) software package and the systems needed to support it are requirements for a well-functioning enterprise. Although some organizations attempt to design and maintain a business model based on “Best Practices,” they rarely have the discipline to execute business process improvement (BPI) without an ERP software in place. Sometimes, companies attempt to create best-of-breed systems, selecting and integrating pieces of functionality to mirror the results of a single ERP package. Yet, unless you have in-house staff with the technological expertise to logically knit together disparate business systems, it’s better not to go down that path. While it’s generally understood that most manufacturing and distribution companies will eventually need an ERP system to function optimally, when evaluating solutions and their potential return-on-investment (ROI), it helps to truly understand how an ERP system contributes to both productivity and profitability. "For almost twenty years we have had people ask for demonstration copies of our ERP software, so they may play with it at their leisure. For years we have said no and we've done so with good reason. An ERP package is an advanced system. It isn't Microsoft Office and it isn't an iPhone. You can't simply turn it on and expect it to run without training."
Why ERP is Vital to Productivity and Profitability
S A P
For successful SAP ERP implementations past go-live, involve business side
By Courtney Bjorlin, News Editor 19 Jan 2009 | SearchSAP.com
Successful SAP ERP implementations hinge on getting the business side involved not only during the project but long after go-live, according to SAP customers. Making sure business ownership is within business units, not the technology teams, and including the business side in training and ERP-related business process improvements will help ensure success, according to David Edwards, divisional vice president of business transformation at Coldwater Creek. The women's clothing and accessories retailer is currently completing an SAP ERP implementation that includes financials, human resources, merchandise management, sales order management and sales audit functionality. Ignoring the business side during the implementation would have been a fatal flaw, Edwards said.
"[It's] the biggest mistake I've seen in 24 years. This is not a tech project, it's not an IT thing. It is a business, moving-needle thing," said Edwards, who was one of four SAP retail customers who spoke about their SAP projects at the National Retail Federation expo in New York last week. "The lesson I would pass on to people is treat it that way."
Stick to governance model Other retailers agree. Sticking to a strict governance model will help ensure that the project aligns with, and meets, its initial ERP business drivers, according to John Baldino, senior director of business transformation at Wawa Inc. The primary business drivers for the Pennsylvania-based grocery store chain were increasing its revenue, improving category management and getting a centralized view of what's in hundreds of its stores. To make sure Wawa met its goal during its ERP implementation, there was a role on the project organization chart called "benefit realization." This was a finance person who worked with the project team to validate that decisions were consistent with the business case benefits that Wawa expected, Baldino said. During the project, Baldino and the ERP implementation team were in front of the board of directors every six months to talk about project status and how it was tracking to its timeline. They also met monthly with executives. And even though they finished the implementation project at the end of last year, they're still in front of the board twice a year to discuss where to make ERP-related business process changes, he said. One of the benefits Wawa realized right off the bat resulted from developing a direct product profitability model for the food service area. Now, Baldino said, Wawa can figure out whether the products it's putting in its delis are making any money. Business team involvement critical But when the project was complete, Baldino thought they made a mistake by not making the business team part of post go-live monitoring. Now, they're working with the business side every day to figure out ways to leverage the system to get more value out of it, not only with individual functions but across all functions. In the last 12 months, they've been focusing on building up a lot of data inside the SAP system in order to do store clustering and efficient item assortment. Business involvement has been a critical success factor. "[It's] business ownership while it's a program and you're implementing it, but post the go-live ... the business can't walk away," he said. "Those 100 people that worked on this SAP project had to go back into their business areas and now become the change agents for how to use and leverage SAP to get more out of it. We kind of patted them on the back … and we left them alone, which I think was a mistake for us. Now we're … getting back more into staying in touch." Other retailers reiterate that collaboration is key, which means drawing on IT's implementation experience to scope and deliver a project that meets business requirements in a timely, cost-effective way. For Hastens and Reliance Retail, a successful SAP implementation meant getting the systems up and running quickly, and that involved avoiding the temptation to customize the SAP software too much. "We just want to run best practices," said Dominic Luzi, CIO of Hastens, a Swedish luxury bed company. "So our implementation was all best-practices based, very quick. We changed the business rather than the software." No hard line between business, IT Reliance Retail, a retailer that serves India, relied on management to keep it on track, CIO Timothy Kasbe said. "It's been the leadership saying, 'Not too many customizations,' and sticking to it," he said. "For the sake of speed, there wasn't a hard line between business and IT. Some of the business things, my guys just did -- commercial-oriented work, we just went and did it." With its SAP ERP implementation, Reliance Retail has been able to derive a very different kind of ROI as it enables more farmers to sell goods. Reliance's goal is to build up the distribution and the supply chain of India -- enabling communities to take part in rapidly evolving markets. "What we have seen is that suicide rates have gone down in the farming communities when these rollouts have happened, and they have been able to sell to us and also buy some of our products," Kasbe said. "It's really a different scale and different way we look at this whole business issue."
Top manufacturing ERP best practices for project planning
11 Dec 2009 | Catherine LaCroix, Contributor
When it comes to manufacturing ERP, there are a number of best practices that are key to a successful implementation. These include picking the right project team, an open mind, time to migrate data, training, data management know-how and a process for continuous improvement. 1. Pick the right project team. Be sure to include members from relevant business operations as well as Information Technology. This cross-functional team will greatly improve decision-making as you design, implement and manage ERP system across multiple sites, said Simon Jacobson, research director at AMR Research. 2. Be open to new processes. During ERP planning for a roll out, companies often believe that how they set up accounts receivable or schedule their factory floor is absolutely critical to the way they do business. They think that they must have the same setup in ERP as they had before. No so, according to Bob Parker, group vice president for research at IDC Manufacturing Insights. "Don't fall in love with your own processes," he warned. 3. Schedule enough time to migrate your data to the new system. Where projects get behind most often is in the process of mapping the existing system to the new system, said Parker. You also need to build in time to scrub the data to make sure it's accurate before migration. This is an area that almost always takes longer than people think. 4. Budget generously for training over the long term. What typically happens in ERP planning is that there is a lot of training at the implementation stage. But when personnel changes, new employees don't get nearly the same level of attention and support. Make sure you've got plans that cover training not just at the front end, but throughout the lifecycle of the new system. 5. Understand that the value of ERP is in the aggregation of the information. At the end of the day your executives and knowledge workers are going to get value out of using the information not how it's produced. When you think about rolling out ERP, think about what sorts of decisions are going to be made and give that more of a priority than the production of the information itself. 6. Create center of excellence. What tends to happen in most ERP planning is that business and IT work hard at the outset but neglect to ask how the ERP will meet goals for the long term. That question needs be considered, according to Parker. One solution to this common oversight is putting a support organization in place -- sometimes called a center of excellence -- to track how a system is actually used after implementation and then make recommendations for continuous improvement.
How to avoid manufacturing ERP implementation failures
17 Dec 2009 | Catherine LaCroix, Contributor
To avoid costly manufacturing ERP implementation failures, companies need to plan for five critical areas lacking in most stand-alone ERP manufacturing systems: data modeling, specialized functionality, the user interface, data integration and customization, said Scott Jacobson, research director at AMR Research. "The challenge that companies face is that when they try to extend ERP into manufacturing they realize that one single data model from ERP can't support all those individual lines," Jacobson said. That's because manufacturing applications are designed for specific manufacturing styles, scenarios and environments. ERP implementation failures often occur when manufacturers are running a mixed environment and the ERP application can't handle multiple diverse lines -- such as metal stamping, high-speed data capture and a more manual job shop are some examples Here are five issues manufacturers need to watch in order to steer clear of ERP failures:
1. Data modeling. The data model of an ERP application is very materials and cost focused. It's very difficult to model more of the complex processes like exception handling or corrective action. 2. Functionality. ERP applications are focused on the mass market. That means ERP vendors can't afford to add specialized manufacturing functionality unless it's for a really large company. 3. User interface. The typical ERP user interface is complex and forms-heavy while "the actual factory operator is not the most computer savvy," Jacobson said. It is better for manufacturers to develop a simpler UI so users will spend less time entering information. 4. Data integration. There's really no automated data collection integration in ERP systems so manufacturers will need complex scripting and an interface to perform simple data collection tasks. These need to synchronize with other processes in the plant. 5. Implementation and customization. Companies that want to extend ERP into the shop floor must realize that their current deployment could be flawed in terms of how it's blueprinted to handle manufacturing. Solving this problem could lead to a costly customization or a re-implementation.
resources:
http://www.gordiantransformationpartners.com/upload/pdf/ERP%20is%20a%20Tool,%20Not%20a%20Solution.pdf
http://www.ctsguides.com/why-buy-erp.asp
http://www.pcmag.com/encyclopedia_term/0,2542,t=ERP&i=42727,00.asp
SAP
http://searchsap.techtarget.com/news/a
http://searchmanufacturingerp.techtarget.com/generic/0,295582,sid193_gci1376706_mem1,00.htmlrticle
