Stick or twist – an eternal manufacturing ERP conundrum

Should you stick with the system(s) you’ve currently got, or should you go through the upheaval of choosing and adopting a brand new system?

There’s never an easy answer to this, which is why it’s such a conundrum. Thinkers is a fiercely independent ERP selection consultancy working with small and medium sized UK manufacturers in the South of England and they have this advice to give…

You can’t begin to answer the conundrum without a deeper dive into longer-term company objectives; your critical business processes and where your risks sit. Nor without questioning your current ability to manage major change or to resource such a project.

If you’ve done that deep dive and decided a new system is the right thing to do, then you may hit conundrum #2.

Where to start?

There are so many ERP systems, many of which do a lot of what we need – I think. Where do we start?

Not being able to see a clear route through to selection of the right system is completely normal. It is complex. It should feel like a complex decision. An ERP system can tie together so many different parts of your business – how would it ever be easy to choose one?

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Case study of a UK biotech manufacturer – ERP selection

Let’s take the example of one UK manufacturing firm in the biotech industry. We’ve simplified it to help add some useful pointers which may help you with your project. This company – let’s call them BIO Ltd – had existing systems managing various processes.

They were satisfied with some of what these systems did. They had some things that worked, but didn’t integrate well. They had some processes which software systems didn’t cover at all – in particular, production. For managing this, they used spreadsheets. In fact, a mass of spreadsheets which had evolved to cope with any requirements, changes or new product development.

Isolated knowledge a problem

A major risk was that a single individual was in charge of the production planning process. Many of the spreadsheet macros and formulae involved were complicated and individual in their nature – meaning no other person was able to step in and manage, or even support, production.

Now, the nature of BIO Ltd’s business meant that within production, planning and control were relatively complex, particularly in terms of batch control and allocation. The easiest thing to do during shortlisting would have been to ask ERP vendors to demonstrate how their systems typically approached production with batch control.

But it would not have been wise…

It is essential that you steer the ERP selection process to focus on the functionality that is critical to your business.

Business critical functionality

The most important part of any ERP selection project is right at the very beginning. There is a serious chunk of thinking to be done before you get anywhere near talking to vendors. Why? Because it is all too easy for ERP vendors to show you what their software can do, whilst never actually answering whether they can do what you need. And if you haven’t explained your need in significant detail, how could either of you know if it is a good fit?

The starting point is to take a step back and consider your business processes in a clear and straightforward manner. These may be existing or new processes, and they must be fit for the future. Explore what is really happening. Some simple-sounding but critical questions to ask at this stage include:

• What processes work well?
• What processes don’t work well?
• What things do we do that we shouldn’t have to do?
• What things don’t we do that we want to do?

This helicopter view of what the processes will be means that you can now take an explanation of your specific business model forward to various ERP vendors.

Going back to BIO Ltd as our example, production had (broadly) been identified as both the strongest reason for their competitive advantage, and their highest risk area.

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Specific, pre-defined processes

So the most critical request to vendors was NO LONGER – Please show us how your ERP system can handle production with batch control. But INSTEAD the request becomes – Please show us how your ERP system would be capable of carrying out production batch control and allocation in THIS particular way, which we will now explain…..

In this scenario, we are asking to be shown how an ERP system would manage a specific pre-defined production process which has already been categorised as critical to the way BIO Ltd maintains their competitive advantage into the future.

We are immediately in much greater control of the selection process, working ever closer towards finding which system supports the planned development of our business.

Supporting planned development

Less ERP systems will be a good fit for you than you might originally think.
All ERP systems manage production in some way.
They will each manage production in different ways.
Some systems are much more flexible and configurable than others.
Not all systems will be able to handle production in the specific way you need them to.
And you will only know this once you have thought through things in depth and defined those processes in an easy-to-understand (and easy-to-explain) way. This is where you should spend most of your time and effort.

Get this bit right, and the rest will follow much more smoothly.

So please, to help us here at Thinkers with our own mission – to rid the world of ERP disasters one UK manufacturer at a time – follow our four-step guide when choosing an ERP system.

Think – that’s THIS bit where you get clarity on what functionality is most important
Choose – the nitty gritty, detailed demos, selection and negotiation
Forge – working with software, processes and people to make it all happen
Use – engage, buy-in, involve, UI configuration, phasing, training, support.

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