Posts Tagged ‘Focus research’

[Note: Cartoon at left is copyright United Features Syndicate, 2003, created by Scott Adams for www.dilbert.com]  Sorry… we couldn’t help including it.

Our friends at Focus Research have distilled the practice of Just In Time inventory – the concept in manufacturing of having just what you need, just when you need it – into 7 key elements.  As one Focus editor (Jerry Durant) notes: “JIT manufacturing is not procrastination, but making a commitment once the scales are tipped in favor of certainty.” 

Herewith then are Focus’ 7 top tips for nimbly mastering the concept of just in time in your manufacturing operations…

1. Delegate responsibility to employees on the floor.  Give up the reins, and let the people who do the work have liberal input on how to do the work.

2. Ensure that line employees are properly trained.  The natural adjunct to the first point.  Make sure line employees know what, when and how to do it, and are empowered as needed accordingly.  It’s a training issue.

3. IT must give employees a holistic view of operations.  Your info systems must be reliable and timely, and must provide the facts and data needed to understand and respond to plant status and needs.

4. A flexible work force and flexible machines are both important to achieving JIT production.  End customer demand mixes are only getting more complex.  Production needs to be able to adapt quickly to fluctuations in demand.  Do you use EDI?  Can you produce from it?  Points 3 and 4 have a lot to do with just how flexible and fast you can really be.

5. Visual controls are an important element to managing JIT production.  It helps if operations or lines can visually see each other.  So obvious.  Small inventory buffers can then be used to provide visual production signals.  (Here we are reminded of Eli Goldratt’s The Goal – and drum, buffer, rope style thinking.)

6. Accountability and governance are key.  JIT requires understanding, and knowing who’s accountable and who’s in charge are essential.

7. Stability in production operations is a requirement.  Standardized work, 6 Sigma, SMED and other lean tools can be used to help eliminate production (and thus inventory) variability – keys to achieving satisfactory just-in-time production.

You can go here to get the original article.  (And you can go here to see more of Dilbert.)

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In an interesting article on Trends in ERP for 2011, Focus Research came to eight succinct conclusions about the state of purchasing plans by firms today when it comes to the deployment of business management software systems.

Their key conclusions can be downloaded here but here’s the gist of their research (along with one experienced VAR’s comments):

1. The days of open-ended, hourly consulting based on a bottomless purchase order are over.  Being providers of these systems ourselves, we’re her to tell you those days were over a long time ago.  Project quotes and estimates today require much more definition – including a scope or gap analysis – in order to determine much more accurately than in the past the exact project objectives, as well as how long it will take and how much it will cost to accomplish these goals.

2. Buyers will expect greater accountability from software vendors and consulting companies.  Focus Research notes that “tight budgets will lead to laser-focused expectations of features and timelines.”  Again, we find that (1) scope definition and (2) change management are the keys to accurate project forecasts.

3. Packaged, or productized, service offerings will gain traction.  Well-defined and fixed scope projects configured to client needs (as defined in a gap analysis) are gaining increasing acceptance. 

4. Slower departmental implementations will gain favor over sweeping enterprise-wide changes.  We have been extolling the virtues of this approach for the past four years.  We think that clients who bite off small pieces (departments) stand a much greater chance of a successful deployment.  Meanwhile, clients risk fewer dollars with this approach, and both client and provider build confidence and trust in one another.  It’s taking a stair-step approach to a project, one step at a time.  And it works!

5. SaaS and cloud computing grow, making more impact on the ERP space.  There are advantages and disadvantages to IT’s latest buzz notion, the cloud.  As well, cloud applications are seen to be more desirable for some applications and less so for others.  It is decidedly not a one size fits all situation.  Tread cautiously.

6. An increasingly distributed enterprise will drive enterprise mobility efforts.  Mobile offerings that work across the enterprise will gain increasing acceptance as their value is proven.

7. Collaboration tools will gain momentum in ERP offerings.  Extending ERP into Outlook, Word and Excel for both structured and unstructured information access and improved business intelligence are the logical outgrowths of distributed and well-integrated, robust solutions.

8. It won’t be the global village one would expect.  Governments, regulations and taxes will continue to be impediments to global-style ERP deployments in many cases, and especially in the larger enterprise.  These have the ability to impact companies’ supply chains negatively when they act as maze-like obstacles at cross-purposes to true globalization and inter-departmental communications.

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Michael Krigsman is CEO of Asuret and an adviser to Focus Research, where he is touted as “a recognized authority on the causes and prevention of IT failures.”  He’s frequently quoted in the press on IT issues, and in an article for Focus a few months ago, Krigsman points out what he deems the five critical points for ERP success.

As we could not agree more strongly with his conclusions, we reprise some of Krigsman’s comments below.  You can find his original article here.

Briefly, he makes the point that ERP projects are so much more complicated than IT projects – largely because they involve crossing over so many departments (not to mention, the depth of scope and the change initiatives inherent in most ERP projects).

Beyond infrastructure issues, Krigsman wisely points out that “the most challenging part of many ERP projects is handling workflows and processes that intersect multiple parts of an organization. Many organizations do not pay sufficient attention to changes caused by this business transformation aspect of their implementation.”

To ensure success then, he recommends companies implementing ERP keep these five points in mind:

1. ERP is about business value.  It must be treated as an investment, not just a project.

2. Business fit is paramount during software selection.  Pay attention to the business results you want to achieve, not just the technical distractions.

3. Prepare for transformation.  A new ERP system is the perfect opportunity to transform how you do business.  While change is hard, automating old, inefficient processes is what you most want to avoid going forward.

4. Embrace change management.  ERP is about transformation and improvement.  Be sure you keep up the lines of communication across staffs and departments as you prepare to deploy.

5. Line up strong executive sponsorship.  Support for your initiative must come – vocally – from the top, if you’re to have any chance of succeeding.

Again, see Krigsman’s entire article cited earlier for a few more details.  But know the above, and you have the gist of it.  

We’ve done scores of these, and the lessons above cannot be overemphasized.  Whenever we fail to vocalize them, we risk deployment for an unprepared client.  A lesson everyone involved – both vendor and client – can ill afford to neglect or forget.

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In a “Focus Brief” released earlier this year by Michael Dortch, I.T. industry analyst and Director of Research at Focus.com, points up some observations about the evolving state of Enterprise Resource Planning worth noting.

As Dortch points out, the Gartner research group coined the term “ERP” in 1990, when it applied predominantly to manufacturing and specifically the management of resources required in order to produce manufactured goods. 

In effect, ERP was the logical extension or continuation of the 60’s-70’s concept of MRP (Material Requirements Planning).  In essence, ERP was the extension of the MRP philosophy from largely the shop floor and inventory planning out into the rest of the braches of an organization.  Evolving thought and faster evolving tech tools made this possible.  The power of the PC and the growing functionality of ERP software were destined to evolve over time into a larger corporate umbrella – first in large-firm corporate America, but over time down into smaller companies across the globe.

The key word in ERP – “enterprise” – meant software that could address most if not all of the critical processes and functional areas in a company, notes Paul Sita, a Focus contributor and I.T. consultant.  This is true whether your stock-in-trade is manufacturing or distribution or services or health care or… whatever.  ERP addresses, as Sita notes, “the breadth of the organization.”  As he also notes, most companies don’t implement all parts of an ERP system at once – rather, they “grow into it, and the integrated nature of ERP systems, by definition, brings value to whatever sub-set of applications you do implement.”

Sita’s opinions reflect our own experiences in implementing systems for our clients:  You have to start small, build gradually, celebrate the early victories, and build on a foundation of those small, successful, discrete steps.  Pick one or two company strategic objective targets, and focus on implementing the necessary technology to analyze, flowchart, remedy, enhance, streamline, cut waste, eliminate redundancy and generally improve the throughput and profitability of that one area (or two areas perhaps, where there is strategic or operational synergy in doing so). 

Financials are often (though not always) a good place to start.  Inventory control and/or order processing may yield even more returned value.  Ultimately, the job of the ERP implementer is to help you analyze and affect the entire “Quote to Cash” process.  Where you start is a matter for discussion.

We’ll extend this post into the next one with some comments about how and where CRM fits in to today’s view of what ERP means.

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