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keysThe May/June issue of APICS Magazine features an article by Gary Smith, a VP with New York City Transit with over 35 years of supply chain, process improvement consulting and team-management experience.  Smith’s insights about what makes a successful project – and the challenges that brings – are worth reprising here today.

First, to quote him directly from his APICS Magazine article (“Change from All Sides”):

“A successful project implementation demands that the people who are affected by it understand the benefits, are full owners, and participate from the beginning.  When the benefits of a project are clearly seen by all in terms of how these advantages align with the organization’s vision, mission and purpose, then acceptance, buy-in and ownership are possible.”

He goes on however to note the most important consideration, too often missed in projects:

“When a company implements projects both large and small, it is introducing change.  The nature of global competition requires businesses to adapt and transform in order for it to remain relevant… There are two types of change – mechanistic and organic.”

Smith describes how the two types of change differ.  Mechanistic change is often revolutionary, coming in the form of new ideas from management or consultants.  He gives the example of a new receiving process which is put in place, with employees trained – but in some cases receiving department staff were not involved and, even though all agreed a past system was outdated, the ideas they had for improvement were seemingly ignored.  Or worse still, they were done without giving proper credit.  When the consultant leaves, it’s no surprised if the new process is abandoned quickly.

Then there is the organic form of change, which is more evolutionary in nature.  It’s a change that becomes a part of an organization’s culture.  It tends to permeate from the bottom up.  Often, it’s taught by experienced employees to new hires.

And therein, emphasizes Smith, lies the secret:  “In order for change to become permanent, it must successfully transition from mechanistic to organic.  That is quite literally the only way to create sustainable change within an organization.”

How does this happen?  The key, in a word notes Smith, is ownership.  People have an innate desire to succeed.  They desire a stake in providing solution to problems.  Intrinsic motivation – the internal gratification derived from solving a problem – can be more satisfying and lead to better results than any external reward.  And, those intrinsic motivators can provide lasting change.  When intrinsic change is recognized by leaders who inspire action through change, people feel like part of the process.  It takes time and patience, but it is possible, and the results can be, as Smith puts it, “staggeringly successful.”

True ownership, then, is the “surest way to build a successful project, avoid failure, and create lasting organizational change.”

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apics changeA recent article by Brian Dominguez, CPIM, a change consultant and General Manager at MDMOTO Group, in the Jan/Feb 2016 issue of APICS Magazine reminds us of just how hard change can be.  As John Kotter noted twenty years ago in the Harvard Business Review, 70 percent of change attempts fail outright.  Studies point to human resistance and company culture as key reasons.

Software implementation projects are a great example, and with their very dynamic designs, it’s no surprise that the Standish Group’s 2014 “Chaos Report” found that only one in six such projects finish on time and on budget, and that only one in eleven large businesses reach their implementation targets.

As Dominguez points out in his article, “Clearly change is difficult [and]… does not occur without conscientious planning and support from the top down.”  Too often, he notes, change projects are driven by quantitative, empirical and rational approaches to a problem – when in fact those methods “fail to take into account that change is driven by a qualitative environment and may require a different technique to gain buy-in.”

Kotter therefore advises business leaders to follow 8 guidelines that he says are essential for fostering change:

  1. Create a sense of urgency
  2. Establish a powerful guiding coalition
  3. Create a vision
  4. Communicate a vision
  5. Empower others to act on the vision
  6. Plan for and create short-term wins
  7. Consolidate improvements and produce still more change
  8. Institutionalize the new approach.

There’s a lot more to the article than that (like how small wins are important because they reduce anxiety and resistance to change while building a sense of self control), but as you can see, if the emphasis is not on the human elements of the change at hand, and the careful communication and handling of those elements, then the chance for failure is pretty high.

It’s worth five minutes of every manager’s time to review Kotter’s 8 points, and keep the human side of change foremost in one’s mind for any change initiative you may be contemplating.  And that most assuredly includes software implementations.

(APICS Magazine can be found here.)

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RFIDIn an APICS Magazine article entitled “RFID at Work” three PhD’s who serve day jobs as computer professors and consultants detail many of the requirements for implementing Radio Frequency ID systems in manufacturing.  While you can find the full article (if you’re an APICS member) in the Sep/Oct 2015 issue, we thought we’d reprise for our readers here the key steps to implementation.  What follows assumes that you’ve already parsed through the thought process about whether RFID is right for you when it comes to having more accurate and timely information to improve your business processes.

The basic element of any RFID system is the data point – the location where the RFID ‘tag’ is read.  It can be used to receive goods and follow work in process along its route according to the ERP system, tracking progress across all work centers or locations.

The key initial step then is simply to identify the key issues and goals of the system, and follow those with a set of design principles.  Look for the logical and technical process requirements that must be logged or acted upon, as well any constraints.  From these, a prototype can be implemented.

In a typical manufacturing environment, the tag will contain fields including the order number, the finished good ID or product number and the route step identifiers that establish the sequence of work center operations.

Most low-cost tags have relatively limited memory (512 bits), minimal enough at these price points that it requires that the data is produced while moving the tag from one station to the next in the route while interactively obtaining deeper data from a traveler, route ticket or work order already in the ERP system.

Each work center is monitored by data readers with antenna(s) mounted above the shop floor.  Typically, the reader will read any RFID tag that comes within about a ten foot radius of itself.

In such a setting, data points would be equipped with touch screen monitors displaying WIP tags in the queue.  At the exit point from production, a tag bearing the product ID number is attached to the product before being moved to inventory, shipping or secondary operation areas.  The tag is read at this point and that information can be transferred back into the ERP system, thus completing the loop.

The info provided above is intended of course only as a general outline of RFID.  A system requires all the “layers” to work together in order to make the tracking of goods more efficient.  Those layers include the physical RFID network consisting of tags, antennas, readers, touch screens, and the shop floor network.  The second layer is usually the ‘middleware,’ responsible for producing your tag ID numbers, reading and writing to the tags, and managing data transfer from data point to reader and then to the network’s control system.  The point is: there is a fair amount of work involved, as one might expect.

Hopefully, our comments here today, courtesy of our friends at APICS, will get you started in your thinking down the road to RFID.

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apics_astlCustomers and readers know that our firm is a long-time proponent, booster, member and champion of APICS (the American Production & Inventory Control Society).  They are, as noted in the organization’s vision statement: “the world’s leading community for end-to-end supply chain excellence.”  APICS chapters nationwide boast 43,000 members in an organization that has been building supply chain excellence since 1957.

Recently, APICS merged with the American Society of Transportation and Logistics (AST&L).  The merger is an illustration of the importance that logistics maintains in the overall supply chain.  As a recent article in APICS Magazine pointed out, the original APICS logo consisted of a stylized representation of a car’s rear axle and differential – an appropriate symbol of today’s merger in illustrating the importance that the movement of product from point A to point B holds even today, as transport remains an integral part of supply chain and operational management.

The key message, APICS notes, is simply this: “Production and inventory control is not an island.”  The productive functioning of the inbound/outbound supply chain is critical to delivering customer value, and transport and logistics thus occupy a key piece in the global supply chain puzzle.  The focus shifts over time from the plant to the supply chain as a whole.  This is merely a broadening of the definition of the term supply chain, and it simply recognizes that what a customer buys is not just a product but an entire experience.

As the APICS Dictionary itself points out in defining the ‘perfect order’ – it’s “an order in which the ‘seven Rs’ are satisfied: the right product, the right quantity, the right condition, the right place, the right time, the right customer, the right cost.”  As the APICS article notes: the plant can’t do that all by itself.

And so, just as APICS has recognized this simple fact in its merger with the AST&L, all manufacturers do well to remember that success comes from catering to the customer’s perception of value, “and anything we can do to enhance that customer value will encourage sales, revenue growth and satisfaction.  Products aren’t purchased strictly on the value inherent in the physical item all by itself.”

Price, promotion and place all play crucial roles, and so too as we deal with internal issues like planning, scheduling and materials availability, it’s important to remember that we’re all part of a global supply chain – from production through transport, and often back again.  It’s all about coordinating and collaboration across all these lines – whether you’re a national organization like APICS or just a small business like yours, or ours.

 

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pushvspullThere’s a long running debate about push versus pull planning in the manufacturing production environment, with push typically exemplified by MRP (material requirements planning) and lean exemplified by pull techniques.  A recent article in the Jul/Aug edition of APICS Magazine article (“New-Fashioned MRP”) by Dave Turbide, an APICS certified CFPIM boils it down as follows:

MRP is based on a forecast of expected demand.  A forecast is prepared… production and purchasing are scheduled to support demand, and work proceeds.  So, you’re pushing forward, to make your product.

In pull, nothing is made until there is demand.  Finished goods require a customer order.  Replacement materials and sub-assemblies are not bought until existing items have been used.  Lean emphasizes making and buying to demand, along with one-piece flow and physical replenishment triggers (kanban).

While some say that push is simply bad, and pull (lean) is good, both approaches, Turbide points out, have their advantages and disadvantages.  Push is recommended in fairly high-variety, complex manufacturing and MTO (make to order) situations.  Pull works best when demand is high for a “relatively” small range of products.  Many companies incorporate elements of both push and pull in their manufacturing environments.

Push is appropriate in conditions of long lead times and a lot of work-in-process inventory.  MRP can be difficult to use in these cases, generating multiple exception notices.  Required information can be difficult to maintain in these cases.  MRP is not demand driven, which is to say, parts and products are acquired to meet a forecast regardless of demand.  If – a big if – “the forecast is accurate and the demand actually occurs, then the company can be efficient and profitable.  But there is no guarantee…” and any differences between forecast and demand create either shortages or excesses in inventory.

Despite all this, MRP remains “the best tool for handling complexity and it has the flexibility required to deal with a wide product variety.  Smart business leaders thus are uniting lean manufacturing tools (kanban, flow production) with their MRP-driven organizations,” notes Turbide.

He goes on to note that some practitioners have taken to using Theory of Constraints to enhance throughput and reduce lead times, and using demand-driven MRP “as a way to pull material replenishment with an MRP-based system.”

As Turbide concludes… “MRP is not dead but traditional techniques are becoming irrelevant as markets shift and evolve.  MRP that incorporates the best of the old with the modern, demand-driven extensions is the tool we need today.”

You can learn lots more about APICS here.

 

 

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APICS logoWe reprised APICS writer David Turbide’s comments regarding the evolution of ERP from his recent APICS Magazine article in our first of this two-post series here.  Today we’ll see what he and APICS have to say about today’s systems and choices.

Turbide notes that topping the list of tools modern ERP suppliers now include in their product suites is enhanced analytics capability.  Dashboard indicators, business intelligence (BI) tools and deep drill-downs are becoming the norm today.  This encourages executives to have more interaction with their systems personally than in years past.  Data analysis tools – often involving Microsoft Excel at some point – are being enhanced with more powerful data visualization capabilities, a trend expected only to evolve further.  It makes decision makers more connected to the pulse of their organizations.

User interfaces (UIs) are likewise evolving.  We see this today in things like Microsoft Dynamics’ recent innovations in the area of the role-tailored client, which lets users focus only on what’s important to them, instead of seeing screens cluttered with other (and often irrelevant) menu options.  For a long time systems increasingly came to look like Microsoft Windows and in particular Office tools like Excel.  That’s still true, but it’s equally true now that they are starting to look more like websites.  Both design approaches serve the greater functionality of the user, with both built in to today’s UIs.

That UI is now moving into mobile as well.  (Here too, Microsoft recently announced availability for its Dynamics NAV product on tablets including iPad and Android devices, moving beyond pure Windows devices.)

And best of all, users will say, is the ability to search within an enterprise system for just about any piece of information they need, from just about any functional area or module.  Once again, UIs are delivering greater value to the user.

Turbide goes on to point out how today’s systems have evolved from a dozen or so modules to as many as 50 or 100 “apps” that can be stacked like blocks to form a tailored ERP solution for specific industries.  These (often third-party) adds-ins serve to further extend the functionality of today’s ERP offerings.  Meanwhile, the lines between ERP, supply chain and manufacturing execution systems (MES) are becoming fuzzy and less meaningful.  Overlaps occur between scheduling and quality as ERP encroaches into the MES domain by offering direct connection to machines and sensors.  Similarly, ERP has been gradually improving in other areas outside its traditional domain, like demand-planning ability, distribution and warehouse management bundled functionality.

In short, ERP continues to evolve, grow and spread its influence into more and more areas of the enterprise, encompassing an ever-greater share of the firm’s database of business intelligence.  That trend will only continue.  The benefit is that today’s buyer has greater choice in the tools and solutions available to them for managing the enterprise than ever before.  As Turbide concludes, “Today’s ERP is far and away more functional, flexible and capable than ever before.”  But if you look closely, you can still see the long heritage of providing the tools and automation that manufacturers need to run their business.  ERP evolves to keep pace with the changes in manufacturing that today’s global business demands.  Plus, as the article notes, there will always be the upstarts stoking the competitive fires as well.  All this bodes well for the continued innovation, integration and growth of business management and planning systems for the growing manufacturer.  And in so doing, will advance the entire industry.

 

 

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david turbideIn the current issue of APICS Magazine (Sep/Oct 2014) consultant and writer Dave Turbide (also an APICS state chapter president and CPIM master instructor, and pictured at left) has penned a few thoughts worth repeating on the evolution of ERP systems, their heritage and some of the challenges they face today.  We’ll devote our last two posts this month to Dave’s thoughts.

As Turbide points out, ERP planning is not what it was ten years ago, or even two years ago.  In fact, it’s merely “the current incarnation of a long line of offerings that date back to inventory management and bill of material software programs” first developed over 50 years ago.  Material requirements planning (MRP) begat manufacturing resource planning, eventually evolving into today’s Enterprise (ERP) systems.

Companies that adopted these systems in the 70s and 80s still use them today in many cases, but utilize new versions with added functionality and modules added along the way.  Occasionally, a major update occurs which can run from full code rewrites to new data tools, interfaces and connectivity options.  Today, new deployment methods are evolving, like cloud and proliferation of the new mobile technologies.

Software is typically released with enough functionality to distinguish it from competitive offerings, notes Turbide.  Eventually, the “feature-function rivalries” begin.  This quest to stay ahead is always good news for users, as ERP gets broader and deeper.

Meanwhile, the history of the ERP market itself is one of acquisitions.  Startups emerge and eventually get consumed by larger companies.   (Our own reselling firm has seen this in dramatic sweeps – only one product we sell today (out of four) is conveyed by its original publisher; large publishers like Infor, Sage and Microsoft predominate in the SMB space today, proffering products invented long ago, by others.)  Sometimes products are combined; sometimes features are borrowed; sometimes a “super ERP” becomes a logical upgrade path from many or all of the acquired products.  In the end, this evolution has led ERP to become the “preferred information management backbone for companies worldwide,” Turbide points out.

The article notes the adoption of software-as-a-service or cloud computing as yet another stage in ERP evolution, whereby technology resources like computers and servers are outsourced, since these aren’t typically within a manufacturer’s core competency.  The licensing method reduces up-front capital costs and the hardware can be scaled quickly to user requirements.

However, manufacturing as a whole has been reluctant to adopt cloud services.  That’s because many manufacturers already have IT infrastructure in place, and the “unwillingness among risk-averse executives” to trust the firm’s vital information to “a remote custodian and long-distance telecommunications link.”  Thus, Turbide notes that only about one-fourth of companies looking at a system purchase opt for that approach.

In our next post, we’ll take a look at what APICS’s Dave Turbide has to say about tools, technology and building a system.  Stay tuned…

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