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Fear of ERP could be killing your business

Written by CyFrame

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Being a plastics processor is tough. You know you need an integrated system to improve margins, eliminate errors and work duplication but you continue to delay taking action.

This indecision is hurting your agility, service and profits and crippling your efforts towards long term sustainable growth.

 

In 2013, plastics processing executives can track yesterday’s production efficiency from their smart phones, yet many manufacturing companies remain incredibly leery of the internal efforts required to successfully implement an ERP system.

Despite the fact they know that the best manufacturing companies leverage these systems to record and measure their performance and to manage their human, material and machine resources on a daily basis, companies often succumb to their fear that the work required to analyze inefficient processes, identify bad habits and drive internal change will be overwhelming. The resulting consensus is: “We will continue to function as we do now until we grow to a mass where we can not.

Even worse, they continue to spend their valuable cash on consultants, non-essential resources and custom programming without taking the actions required to regain control of their operations and function as a cohesive integrated unit.

Can a company effectively manage the transition to an ERP while still operating a growing business? How can we ensure the effort required to make such a change is reasonable? What is the true cost of indecision?

Running your business with spreadsheets, accounting packages and multiple custom or off-the-shelf side systems can actually create more complexity and work duplication than benefits. That approach will never yield the value that can be attained within just a few months of implementing an industry-specific, integrated ERP system. Manufacturers with integrated ERP systems are far more capable of adhering to production schedules, have more accurate control over inventory, are easier to deal with as a company and have consistently superior on-time delivery.

The secret to successfully and seamlessly implementing an ERP starts with having your employees and managers buy into the project. This will allow people to own the decisions that were made and take pride in the achievements. It’s also very important to celebrate the significant milestones accomplished with your new ERP, such as loading your data, closing out the first month-end or going live on the shop floor.

As importantly, you must carefully select a partner that is dedicated to your industry. This will significantly reduce the time, expense and frustration involved in explaining the nature of your industry and your detailed internal processes, requirements and business objectives. You will also need to find a flexible ERP whose parameters can be configured to your company’s specific requirements without the need for customization. This makes for a gentler learning curve and expedites the implementation cycle which means your firm will yield the benefits much sooner. The end-to-end transition should take about six months.  A robust ERP can be leveraged to attain continuous long term benefits year after year.

Internally, your management team must be aligned around your business objectives and priorities as you locate an ERP partner that will work with your group to identify inefficient internal processes and, provide insight into best business practices. The ERP partner will also propose configuration options that will streamline the workflow and impose certain disciplines in order to drive relevant, actionable management reporting.

When your team is ready to select an ERP partner, it is important they offer step-by-step implementation and training support, focus on strategic milestones, free up existing resources and build positive forward momentum right up to the moment you “go live”. Together, you should be able to methodically implement more efficient, standardized, visible processes and procedures using existing resources over the course of four to six months while keeping the team motivated and focused.

Implementing an industry-specific ERP system will inherently instil best business practices and help you manage positive change.  It helps your managers impose discipline in key areas that can reduce overhead costs and improve margins and response times, while managing your firm’s growth.

If your team is aligned and stays positive, it’s amazing what can be accomplished in very little time with the right guidance and framework.