The first step to developing a manufacturing ERP implementation strategy is to define your business goals. Are you deploying the ERP system to address greater supply chain visibility, for cost and margin related issues, for compliance, or to achieve more efficiency within the facility?
Answering these questions will help manufacturers get the most out of their ERP deployment, according to Simon Jacobson, research director at AMR Research.
"It's one thing to justify the expenditure in terms of reducing a paper based system, increasing efficiencies and reducing labor costs," he said, "but those don't really translate into something the business can use as weapon to better the supply chain."
The next point on your ERP roadmap is deciding who will be on the project team. Obviously, someone from manufacturing needs to be represented. But ideally the team needs cross-functional expertise, which means including people from both the business and the IT side. "There has to be a blend of skills there," said Jacobson.
In addition, ERP strategy needs to define both performance management goals and new "behaviors" for the system. Too often when companies deploy ERP systems, they do so without establishing performance management definitions, such as setting performance expectations, monitoring progress and measuring results that yield improvements in the manufacturing process. With this approach, you can get a sense of instant gratification -- performance gains say 10 percent here and 30 percent gain there. But those gains have little value if they don't lead to continuous process improvement.
Your ERP roadmap also has to be more than just an IT project -- described by Jacobson as a "set it and forget it attitude where we deploy and we're done." With these types of projects, he says the real work begins after the deployment. That involves gathering all the information on how a process performs and how you're transforming various materials into a final product on an assembly.
One critical step to a successful deployment, said Jacobson, is understanding how you can take the information and knowledge you've acquired and manage it to improve a process.
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About the author: Catherine LaCroix is a freelance writer based in Portland, Ore. She covers technology used in business, education and healthcare.
This was first published in December 2009