With technology being everywhere today from the WiFi in the coffee shop to the Fit Band on our wrists, it’s not a stretch these days to say that today’s ERP and CRM systems are the equivalent in the business and manufacturing world: the band that ties the enterprise together through technology. In a rapidly changing marketplace and supply chain, the input, feedback and data provided by these systems allows companies to keep up, or even get ahead, in the market.
The APICS Supply Chain Council has created a series of over 250 metrics known as SCOR (for Supply Chain Operations Reference) that helps manufacturers to measure these solutions. These metrics are organized into a hierarchical structure starting with the organizational level, moving up to the process level and finally the diagnostic level. They focus on: reliability, responsiveness, agility, costs and asset management efficiency. Those first three attributes are mostly customer-focused, while the latter two are internally-focused.
The challenge then for any company is to analyze and define, then align and prioritize, the market and competitive requirements for each of these attributes. Ideally then, a company wants to decide where it thinks it can be “best-in-class” and where it thinks it can at least adequately compete.
As a whitepaper by a firm called Edgewater points out, there is a second organization that goes by the name of MESA, the Manufacturing Enterprise Solutions Association that provides similar metrics. In their Guidebook they point out the importance of the measurement process:
“Production companies are quite complex, so most need to work through the process of articulating goals and crafting a system of metrics that is effective. Each company may need to create its own correlations and linkages from corporate objectives to financial metrics to operations key performance indicators (KPIs) and from aggregate KPIs to very specific metrics at the individual, line or unit level.”
The point of all this as it relates to ERP is simple: It’s about a lot more than simply strapping on an enterprise fitness band, so to speak. The managing of the people, the processes and the data, and getting the client company to embrace all these, is a bigger challenge than appears at first blush.
In our next post, we’ll take a look at a couple examples cited by Edgewater where firms had to throw out the old in order to bring in the new – as in, a new ERP system – and some of the challenges they faced.