So You Think You Might Need an ERP System

by James P. Tate on June 2, 2014

There are times in the life of every manager when he begins to think there has to be a better way to accomplish the daily production and inventory control activities in his company. Many managers look to the computer for solutions to their problems. It is easy to imagine a computer system that provides answers to your questions without waiting hours for information or disrupting the daily work of your subordinates. What are the clues that tell you the information channels and data bases in your production operations are not giving you the timely information you need to make sound decisions? Let me give you some hints that I use in my consulting evaluations.

1. Everyone has developed a spreadsheet to compile and manipulation information to accomplish their immediate jobs.

2. These personal spreadsheets are not shared between colleagues. The result is double entry of data into multiple spreadsheets. With double entry comes double the chance of data input error.

3. There is poor coordination between operational departments. In some cases, departments hoard information as a means of protecting themselves from blame.

4. There is regular blame placing between operational departments as to who has a particular job order.

5. There is confusion about the priorities of customer orders. Each department is working on a different priority list.

6. Trying to find the status of a particular customer order takes many man hours of investigation.

7. There is a chronic problem of late shipment of customer orders. People have become complacent with a 75-80% on-time delivery rate.

8. Rework of production due to incomplete documentation or changes in design that are not communicated in a timely manner to all departments.

9. Finger pointing among department heads for the causes of late delivery.

10. Poor cost estimates or cost overruns on job orders.

11. Excessive raw material inventory.

12. Excessive production floor inventory (work in process).

13. Frequent expediting of raw material deliveries and shipments to customers to make up for late processing of customer orders.

Does any of this sound familiar? Most of these symptoms are the result of poor communication and data management. Computer systems are best at data management and repetitive tasks. Although an ERP (Enterprise Resource Planning) system will help alleviate these problems, you must first recognize the best practices solutions to your problems. If you are not using “best practices” in your work place the simple addition of a computer system will only enable you to make your mistakes faster. You must first evaluate your operations in the light of “best practices” and correct your manual system before you can implement a computer solution to these problems.

Your operations should be evaluated and the key problems identified before you start a system selection project. More on this evaluation process in the next e-bulletin.

Previous post:

Next post: