ERP and MRP Software: Avoid 14 Implementation Failures Part II

Part II: ERP and MRP Software Implementation

The manufacturing environment has undergone a major paradigm shift over the past twenty years. It continues to evolve today. Operationally, we have also seen a transformation from rich to lean, push to pull, just-in-case inventory to just-in-time production, in-house to outsourced, and top down command and control to self-managing horizontal process teams. Suppliers operating in this environment must improve continuously and adapt more efficiently to remain competitive and survive. Advancements in ERP and MRP technology and software help these manufacturing businesses become more efficient and profitable if they are implemented properly. In this blog series, we will explore how to avoid the top 14 ERP and MRP software implementation mistakes to ensure your organization learns to avoid them in the future. READ our first blog: ERP and MRP Software: Avoid 14 Implementation Failures Part I

14 ERP and MRP Software Implementation Mistakes to Avoid

Here’s the next 4 to 10 common mistakes in our top 14 countdown of the factors is involved with implementations that do not go smoothly.

4. Solution in Search of a Problem: Many times managers get caught up in the latest fads and believe “magic bullet” solutions will improve business performance and competitiveness. However, if the solution doesn’t fit the business, either it will not work or it will not last. Sometimes this is called “the rule of the tool” or “I’ve got a hammer, so everything looks like a nail.”

Levi’s recently attempted to implement teams in a production organization that traditionally ran on a piecework system.(2) With teams, individual compensation was replaced by a team bonus. This had the effect of paying the more productive operators less, and the less productive operators more. Guess what happened? The faster workers slowed down, and the number of conflicts in the workplace increased. Somebody thought teams were “good” and pushed for implementation which cost Levi’s millions in extra costs and lost profits. Obviously teams were a solution in search of a problem in this case.

5. Rush to Action: This is closely related to the preceding and can happen when consultants are hired to help a business solve problems and implement solutions. In many cases, there is a great deal of pressure on everyone to do something fast because the clock is running and fees are adding up. Often a “solution” is based on an incomplete understanding of the business situation. The situation gets further complicated when the people in your organization who have to implement the solution know it’s wrong and will not go along with it (or only pay lip service). And then to add insult to injury, organization members get blamed for resisting when the solution made no sense in the first place! It’s a lot better to take some extra time up front to make sure the solution fits the problem and everyone understands the logic, implementation plan, and expected outcomes.

6. Overkill: It stands to reason the more complicated a program, the more difficult it will be to implement and sustain. Many programs are “over designed” and require far more time and effort to implement and maintain than they are worth. Quality programs and certifications are good examples. Most require extensive documentation of policies, procedures, work instructions, deviations from standard, and a host of other reports that are so excessive they amount to overkill. Often, these programs are mandated by large customers, so if a supplier does not comply they will essentially be out of business. Programs like these are often “implemented” in form but not in substance. Measuring and reporting takes place because this is what the customer looks for, but the program is not truly integrated with manufacturing and may even be a source of conflict. (3)

7. The Program is Manipulative: Many times improvement programs are introduced under false pretenses. For example, a company announces it must improve performance and competitiveness in order to survive and embarks on a major program to reengineer its processes. Everyone is expected to participate. Then people find out what is really going on...they are reengineering themselves out of a job. Guess how much success this program is going to have! This is one of the reasons that reengineering has fallen out of favor. (4)

8. Lack of Management Commitment: When management doesn’t think a program is really important, organization members are able to sense management’s indifference. They may pay lip service to the program, but generally keep their heads down and wait for it to go away. This is why consultants and other change agents insist on top management’s visible involvement and commitment because they know the program will fail without it. On the other hand, change can fail when it’s imposed from the top and lacks meaningful involvement of key people throughout the organization. This can be a difficult balance to strike.

9. Poor Prior Experience: “Here we go again” is a common sentiment in those organizations that have gone through a variety of “flavor of the month” programs which lasted for a while and then faded away. When an organization embarks on a new program, everyone expects a repeat of the past, doesn’t take it seriously, and of course implementation fails

10. Lack of Measurement and Feedback: It’s important to measure improvement on key business indicators over time and provide this feedback to those members of the organization who are making these improvements happen. A pitfall here is that you will spend too much time and effort finding out where you are...setting baselines and benchmarking your performance against your peers...as opposed to focusing your time and energies on getting better. Setting baseline performance sounds logical, but is inconsequential...you are either continuing to improve or you are not. If you can see a positive trend in key business indicators being sustained over time, what difference does knowing the precise starting point really make?

Part III of this series we will explore the following top ERP and MRP software implementation failures. 

11. Time Frame Too Short
12. Decreasing Payoff Over Time
13. Lack of Agreement Among Senior Managers
14. Continuous Improvement: Catch 22

If you have undergone an ERP or MRP software implementation in the past, you know the implementation process usually will take longer than expected with extra costs and work involved. It is our hope that you can avoid these common implementation mistakes by sharing this blog series with you. When you learn about what mistakes to avoid, hopefully this will help you take steps to implement more quickly and effectively. To be forewarned is to be forearmed as the old saying goes, and insofar as this article alerts you to some of the difficulties and pitfalls, it will have served its purpose.

Feel free to CONTACT US at Baesis or call Len Diana at 508-393-9960 x 1011 if you have any questions about this article, Sage 100 ERP or are considering implementing a new ERP systems. We offer a free needs assessment to help you get started.

Baesis was founded with the belief that there was an opportunity to serve the SMB manufacturing community and build a company based on values and a customer first attitude. Baesis specializes in serving the SMB manufacturing community in New England, New York, Ohio, Kansas and Missouri implementing, supporting and training customers on Sage 100, JobOps, Sage 50 for Manufacturing, and MISys solutions.

Today Baesis is one of the largest Sage and JobOps resellers in the United States. Sage 100 and JobOps ERP solutions help Baesis better serve the manufacturing community in New England, New York, Ohio, Kansas, and Missouri by helping customers identify new and improved ways to increase productivity and profitability.

By Frank Leonard

References

1.     "Levi’s Factory Workers are Assigned to Teams and Moral Takes a Hit. Infighting Rises, Productivity Falls as Employees Miss the Piecework System", Ralph T. King, Jr. Wall Street Journal, May 20, 1998, Page 1.
2.    One of the most thorough analyses of ISO 9000 and its implications can be found in Optimizing Quality in Electronics Assembly by James Allen Smith & Frank Whitehall, McGraw-Hill, 2006, Chapter 17 pp. 430-451
3.    For a revisionist view of reengineering, read Beyond Reengineering: How the Process-Centered Organization is Changing Our Work and Our Lives, Michael Hammer, Harper Business Press, 1997

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Another version of this blog was posted previously on Baesis’ Tech Tips Blog on March, 01, 2014 - WHY IMPLEMENTATIONS FAIL - by Frank Leonard

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