ERP Making it happen


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ERP Making it happen

  1. 1. Enterprise Resource Planning (ERP): Making It Happen
  2. 3. “ Many major companies are having difficulty achieving effective enterprise resource planning even after a full year of implementation,” according to a report issued by The Conference Board. The report goes on to state that “some 40% of participants in The Conference Board survey failed to achieve their business case even a year after having implemented enterprise resource planning (ERP).” ----(The Conference Board)
  3. 4. Role of ERP Has Changed <ul><li>20 th Century ERP Role </li></ul>Today <ul><li>Enterprise Optimization </li></ul><ul><li>Supply Chain Optimization </li></ul><ul><li>Tactical Cost of Doing Business </li></ul><ul><li>Strategic Investment </li></ul><ul><li>Reengineered processes for Survival </li></ul><ul><li>Reengineered processes for Efficiency </li></ul><ul><li>Computing in the “Cloud” </li></ul><ul><li>ERP is the Next Wave </li></ul>
  4. 5. Summary ERP and e-Business
  5. 6. ERP, e-Business and Data Base Accuracy <ul><li>Item Master/Bill of Material/Routing </li></ul><ul><li>Customer and Vendor Masters </li></ul><ul><li>Financial Account Coding </li></ul><ul><li>Inventory Accuracy </li></ul>
  6. 7. Data Accuracy at a Medical Products Distributor <ul><li>$40+ billion health care supply management company </li></ul><ul><li>30+ North American distribution centers </li></ul><ul><li>One million order lines every work day </li></ul><ul><li>Short filled order can be a life threatening event </li></ul>
  7. 8. Data Accuracy <ul><li>Recognized the impact of accurate records on both </li></ul><ul><ul><li>Customer service </li></ul></ul><ul><ul><li>Financial reporting </li></ul></ul><ul><li>Transformed the Enterprise by </li></ul><ul><ul><li>Deploying a proprietary warehouse management system </li></ul></ul><ul><ul><li>Redesigning business processes to achieve high levels of data accuracy </li></ul></ul>Medical Products Distributor
  8. 9. Data Accuracy: Positive Change <ul><li>Early 90’s </li></ul>Today 70 to 90% inventory accuracy 99.8+% inventory accuracy 90% of physical inventories eliminated Two physical inventories per year at each distribution center Use of more efficient “process” cycle counting Exclusive use of ABC cycle counting Medical Products Distributor
  9. 10. Implementing ERP: The Three Elements
  10. 11. The New Industrial Engineering Business Process Information Technology Redesign Capabilities How can processes be redesigned using IT?
  11. 12. Business Process Redesign
  12. 13. Business Process Redesign at a Discrete Manufacturer --- Redesigned Procurement Process <ul><li>Receipt is authority to pay </li></ul>Automatic AP entry and payment <ul><li>Automatic adjustment of contract </li></ul><ul><li>PO </li></ul>Internet release to vendor Swipe bar code to receive in stock <ul><li>Receive directly to point of use </li></ul>External Kanban
  13. 14. Business Process Redesign at a Discrete Manufacturer ---Redesigned Procurement Process <ul><li>80%+ of items under Kanban control </li></ul><ul><ul><li>POs written reduced from 5,000 per month to 1,700 </li></ul></ul><ul><li>Self-billing invoicing routine eliminates supplier invoices </li></ul><ul><li>Save over $20,000 per month using the </li></ul><ul><li>“ self-billing invoicing” routines in ERP software </li></ul>
  14. 15. <ul><li>Reduced delivery lead-times 67% </li></ul><ul><li>Increased inventory turns 2.3X to 18X </li></ul><ul><li>Increased revenues by 250% </li></ul>Business Process Redesign at a Discrete Manufacturer
  15. 16. Strategic Project Management
  16. 18. Risk Management “ It ’ s the alligators that you don ’ t see, that will bite you. ”
  17. 19. ERP Risks
  18. 20. Change Management
  19. 21. Multiple Projects, Multiple Visions, Competing Resources Six Sigma Collaborative Product Design ERP Empowerment Vision
  20. 22. The Essential Elements of Change Management
  21. 23. The Ten Steps for a Successful ERP Project 1. Clearly defined Project Mission 2. Leadership at the Top 3. Realistic Project Schedule/Plan 4. Client Consultation 5. Personnel selection
  22. 24. 10 ERP Success Factors 6. Technical Tasks 7. Client Acceptance 8. Monitoring & Feedback 9. Communication 10. Trouble-shooting The Ten Steps for a Successful ERP Project
  23. 25. ERP: Making It Happen