Sabre recently added a new junior analyst to our team, John. John was present today in a presentation of some manufacturing processes in a Microsoft Dynamics NAV ERP implementation meeting (in particular, he was witness to an implementation training session of the ETO module we've developed for the ERP).
Returning to the office, John (who was quiet during the presentation) mentioned how he was surprised how simple the process we were training the customer to follow was. John is an APICS CPIM candidate, and has just finished a 3 year course focused on best practices in manufacturing. Some of the questions and much of the training was very basic stuff, and for the customer it was new but they understood how it made sense. It was clear John was surprised by their lack of knowledge.
I thought I'd share the explanation I gave to John.
Keeping it Simple ...
"You've been trained in school to work with products like SAP and Oracle at companies that have whole departments dedicated to production planning, or master scheduling. The people at the companies that can afford SAP or Oracle have been hired to be highly specialized"
Keep ERP Implementations Simple, John
"A company like the one we visited today started as a few guys in a garage. Likely, one of them was good at selling and became the owner. In the beginning he ordered materials, negotiated prices, built the products and sold them. As time went on and he became busier, he went from a few guys to a dozen. He hired a bookkeeper. He hired a buyer. Whoever helped him get on the road and sell more"
"Today there are 60 or 70 people there - but they are all those original bookkeepers or buyers or engineers that he hired in the beginning. They grew up with a little company, and when it was small they didn't need any systems. It's bigger now - but it snuck up on them. This is the first ERP implementation they've ever done. They don't know how to run an ERP following all the things you were taught in school. They've run the business by expediting - which works when you have just 10 people - but kills you when you have 70."
"If we try and impose the real 'best practices' you learned in school on them all in one shot, they'll never be able to deal with it. It would be like trying to show someone calculus who doesn't understand multiplication. Going from where they were to where we're sending them will solve 80% of their problems. When they understand that and they get good at it, we can help them with the next set of problems etc... Eventually they might get to that organized, big corporate system."
"In the mean time - we need to keep it simple and effective".
What is the lesson?
There are many companies running very old and outdated software systems to manage their operations. Often they do this because their IT person is comfortable with this system and doesn’t want to change, or they are balking at investing in a new ERP Implementation based on perceived cost.
We've worked with a manufacturer/distributor running on a very old AS400 batch update system. Inventory was not “live” but updated every 2 hours. Their customer service department did not have easy access to customer information or inventory. They could not drill into information to help their customers buy more as the system did not utilize Windows, requiring them to remember the customer number in order to leave the screen they were on to access additional data. Alternatives were in the customer service reps’ heads, not in the system. The inventory was not updated and was often out of stock due to the batch method and lack of forecasting abilities in the system resulting in many lost sales opportunities and a decrease in customer satisfaction. Plus, their employees were frustrated and unhappy.
They didn't really know any better? The idea of a new ERP Implementation was scary and frightening.
We've worked with other companies with old systems very similar to the one using the AS 400 above, who frankly didn't understand the basics of supply chain. The concept of a sales order and an order book was foreign to them. Once again, a modern ERP Implementation of Business Centrak would be very difficult for them to handle unless we keep it very simple to help them get over the complexity.
Many in this second company realized they needed a new system but were waiting for their IT Director to retire so they wouldn’t have to rock the boat.
You may want to view my Linked In article on common ERP Implementation mistakes with Business Central or view our YouTube channel where we constantly add lots of great videos on Business Central inventory and other subjects.
If you need help with choosing an ERP implementation partner or product, give us a call at: (519) 585-7524 x.45 or contact our team, we are excited to talk with you soon!