Implementation Pitfalls

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We have narrowed down our 15 years of software implementation experience in just a few slides, so that you can avoid the most common mistakes that we have come across. It will take you about 10 minutes to read it and yet may save you 10's of thousands in wasted time and effort.

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Implementation Pitfalls

  1. 1. Common Pitfalls in Supply Chain System Implementations V.B-101 Common Pitfalls in Supply Chain System Implementations
  2. 2. Common Pitfalls in Supply Chain System Implementations Most companies go in search of the supply chain holy-grail of improved performance to customers, while improving efficiencies in manufacturing, inventory turns, and profitability. Billions of dollars have been spent on software and consulting services for improving demand planning, Inventory optimization, Sales & Operations Planning, Available-to-Promise, etc. But why do so many supply chain implementations fail? It’s been so many years that we have been selling, implementing, and maintaining Supply Chain Planning systems and all kind of related services around that. So we thought it would be nice to put together a document to talk about the most common mistakes companies make in implementing their SCP systems. Now, this is not a catch-all document but hopefully it will help you avoid major pitfalls, save some time, and money. That being said, from both an operational or consulting perspective, there appears to be a number of characteristics that can help you predict whether a project will be successful or not. Let’s see…
  3. 3. Common Pitfalls in Supply Chain System Implementations Leadership, Leadership, Leadership, Plus a little teamwork When two companies in the same industry implement the same piece of software, with the same fundamental objectives and data, why can one do it in 4 months and the other in 18 months? It comes down to leadership and teamwork. Strong leaders usually have built strong functional teams. When purchasing software, they know what to look for and have a roadmap developed on how to bring the organization, processes, and tools together to deliver improvements. The vision and authority of upper management enables the teams to execute and be successful in every step of the project which usually leads to a shorter period of implementation time. Almost all projects that affect the performance of the supply chain processes affect the organization Take the globally (i.e. many stakeholders). leadership out of the equation and the common thread is gone. We have seen many projects where the control of the project is left in hands of an isolated few (usually with lower organizational ranks) to determine what the requirements are, locally. In that case, projects usually take a long time because the team ends up implementing to a different set of requirements than when they started, and try to optimize every little detail according to their own needs. Naturally, leading to ridiculously long project time frames.
  4. 4. Common Pitfalls in Supply Chain System Implementations The software is not a panacea The Pareto Principle trumps everything in determining supply chain project success. Simply put, 80% of the value will be derived from 20% of the requirements. One characteristic of projects that take a very long time is the expectation that the software will solve all problems, including making up for some inefficient processes and organizational structure. Remember, “software” enables the process not the other way around.
  5. 5. Common Pitfalls in Supply Chain System Implementations Data will not improve your supply chain, In itself! As the requirements list grows ever longer, the need to create and maintain ever larger amounts of data grows, accordingly. Most companies’ data quality is poor-- (No…you are not the only one!). So not having good control over the scope, and lack of project focus, makes the data gathering and cleaning task complex and time consuming.
  6. 6. Common Pitfalls in Supply Chain System Implementations What’s more Important: Complete Data or Accurate Data? Complete data is far more important than accurate data. For instance, if we strive to have accurate data you will never implement a supply chain solution – accurate data doesn’t exist! Complete data may not be accurate but it enables you to execute a new process. Link this with a continuous improvement methodology and accuracy will improve, processes will be sped-up, and organizational improvement will occur. Data needs to be directionally correct to support decision making – and that is what supply chain disciplines are all about – risk mitigation and decision making.
  7. 7. Common Pitfalls in Supply Chain System Implementations Spreadsheets are not a planning system Spreadsheets are a two dimensional calculator that lead people to incorrect decision making. When a new system is in, look to eliminate the spreadsheet-dependency wherever possible. We suggest setting up continuous improvement forums with planners to understand what they need and migrate it to the system. The last thing you want to do is spend large capital dollars on software so that you can download a result to a spreadsheet and allow planners to redo the plan. You’ll never know if the system was giving a correct answer--and your process speed will once again be dragged down.
  8. 8. Common Pitfalls in Supply Chain System Implementations When it comes to models more detail is not always better The first impulse that most companies have is to try and model, as closely as possible, the manufacturing operations to the point of individual seconds. Instead, what they should be looking at is what is the level of detail required to get to a good solution. The point is that randomness exists within processes which can not be modeled through the planning system. For example, why model the operation time to the exact second when you don’t know when the operator is going to take a break. Keeping the models at a higher level while accurately representing the manufacturing process provides a cleaner result, and sets the right expectations.
  9. 9. Common Pitfalls in Supply Chain System Implementations Consistency, Consistency, Consistency… Consistency of the implementation team is critical. Implementations fail when there is not a clear view of the design, plan, and objectives by all members of the team throughout the implementation. In many cases the team make-up changes which results in a loss of knowledge and confusion. This leads to longer implementation schedules and in extreme cases full solution rework.
  10. 10. Common Pitfalls in Supply Chain System Implementations When Testing, Small and Accurate is the key! The true purpose of unit testing is often misunderstood. Unit tests should be used to prove out expected model functionality in a controlled environment. In many cases, the unit test data set contains a full download of all source data. This is very difficult to work with, and understand, if all logic is working correctly. Instead, small controlled data sets should be used along with specific use-cases to examine functionality results. This is the case for both the model and the integration. Once everything has been thoroughly tested and accepted you should proceed to integrated testing. This is where progressively larger data sets should be used. Take small steps and continue to move forward; instead of taking a large step, then three steps backwards.
  11. 11. Common Pitfalls in Supply Chain System Implementations Big Bang Approach Can Explode!!! When looking at supply chain management, many functions are needed (Demand Planning, Inventory Optimization, Supply Chain Planning, Factory Planning, Available to Promise, etc.) to create an integrated supply chain. However, when it comes to implementation a big bang approach can usually lead to disaster--since this is a complex problem, having too many moving pieces can be daunting. A logical rollout in overlapping phases should be used. For example, Demand Management to create the demand signal, Supply Chain Planning to create demand sourcing and the statement of supply, Available to Promise to provide real time promise dates, then fine tuning through the use of factory planning and inventory optimization. This approach will keep the team focused, and ensure the end users are not overwhelmed with process changes that accompany the software releases.
  12. 12. Common Pitfalls in Supply Chain System Implementations Just because you can It doesn’t mean you should! Planning systems may have a number of functionalities that seem cool at the time, but you need to ask the question are they really needed. Just as adding too much detail in the models can lead to confusion and false expectations, adding too much functionality can lead to confusing results and loss of control. This is not to say that you should not use enhanced functionality, but rather it should be closely examined during the design phase to understand what is needed to support it and how it affects the results.
  13. 13. Common Pitfalls in Supply Chain System Implementations Time in design, pay now or pay later! Design is without a doubt the most critical phase of any implementation. This is where the foundation is set and the plan developed to guide the implementation effort. Just like building a house if you have a good blue print execution is straight forward and the result is success, but if the blue print is put together in a rushed manner you only have two outcomes, either poor construction or increased schedule and cost due to rework. The design effort should be well supported by both business and technical users. In many cases the effort is driven by a technical team only. Where this occurs, although the solution arrived at may be technically correct, it may be of little use to the business users--and be seen as a failed attempt.
  14. 14. Common Pitfalls in Supply Chain System Implementations There is no magic bullet here… In conclusion, to cross the finish-line on a supply chain system implementation as quickly and as successfully as possible, remember to keep the scope small, the requirements tight, and implement a continuous improvement methodology that expands the software as the process and data matures. You’ll be up and running in no time and on the path to real supply chain improvement.
  15. 15. Common Pitfalls in Supply Chain System Implementations Resources: Click here For: Supply Chain Planning Blog Click here For: Planning Systems Click here For: Questions Click here For: Adexa Please feel free to post this on your blog or email it to whomever you believe would benefit from it. Thank You. U.S. © 2010 Adexa, Inc. All rights reserved.

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