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Part 3: Getting data right

In previous installments of this series, we discussed the key trends in the future of manufacturing and provided a checklist for new ERP and MRP projects. Now we need to talk about a critical commercial issue for any manufacturing business: getting the data right.

We meet many manufacturing CEOs who are frustrated that, despite spending huge sums on new systems, they lack visibility of the true cost of production, have higher than expected waste, and have no clear view of inventory.

New systems like IFS, Nav, AX or Dynamics 365, SAP, Sage, Epicor, Oracle or Syspro can cost big money. But if the project fails to deliver, often the root cause is that the master data is wrong. The system may be fine (though often it isn’t!), but if the data is wrong then everything is built on sand.

Poor master data confuses everything, embedding waste, errors and poor service throughout the organization. For example, product costings, bills of material, recipes, or routings, may have not been set up correctly in the first place or may have become out of date. We’ve frequently seen examples of businesses where the same customers, finished goods (FGs) or raw materials (RMs) are entered multiple times, but called different things, creating all kinds of confusion. The bigger and more widely distributed the company, the more possible this can happen.

These issues usually result in reports that are wrong or time-consuming to fix. Staff costs increase, especially for the finance team, who may have to clear up the mess in Excel.

Procurement may over-order to create safety stocks, tying up cash; sales can’t accurately forecast delivery dates. Eager salespeople may “borrow” items from different orders to fulfill today’s priority, creating more problems down the line. Inventory turn is lower than planned and OTIF targets get missed. Customers are disappointed by long lead-times or upset by incorrect, incomplete, or late delivery. Labels or documents may be wrong, which is inconvenient at best and, at worst, can have legal or safety implications.

On the other hand, well-structured manufacturing data provides insights to senior managers, allowing them to answer important questions:

Well-structured data also allows for accurate real-time data, empowering supervisors to organize work within defined boundaries.

Fundamentally, poor data can make it hard to take advantage of efficiencies of scale. You can roll out new systems, but the problems will remain. And a growing business becomes less profitable rather than more profitable.

So then, how does a mid-market manufacturing business get data right?

1. Instill strong leadership and ownership.

Data is difficult and detailed. And let’s be honest: it’s not very interesting. Solution vendors are contracted to deliver tech, so they don’t really care about the data. Everyone’s too busy doing their day job, so it may get left to the Finance or IT teams to work out data problems, and they may not have the knowledge to fix issues or the authority to get people to change bad habits.

But data has strategic implications, so an executive must take ownership. And whoever takes charge of the data needs to have time to get to the bottom of the issues, experience in this kind of work, and authority to make decisions and get things done.

Production and business teams will have to be involved as well, taking responsibility to help get the data right and keep it that way. And since data quality is an ongoing exercise, the senior team must receive reports at regular meetings.

2. Identify the problems and their solutions.

It may seem obvious, but it’s often overlooked: data quality issues will keep reoccurring, even snowballing if you don’t find the root causes and create solutions.

One place to start is to look for who is supposed to be in charge of data quality – if anyone. Data problems often reflect process problems or a lack of alignment between people and departments. It may not be clear internally who is responsible for what, for updating data as things change, or for correcting data when errors are found.

Perhaps data quality falls to some very overstretched, helpful people who may be vital but have a very low profile. Or there may be no-one who has the time to manage data quality.

Using multiple systems without proper integration is another common cause of poor data quality. Sales, finance and production teams’ reports simply won’t agree if they are working from different base information. Fixing the problem may require process changes, technology changes and some retraining (or even “redeployment” if the real issue is particular people!).

There may be good reasons for using multiple systems: for example, specialist warehouse management solutions that work with advanced technology such as voice- or sight-picking, which isn’t supported by a basic ERP platform. But with separate systems, there must be clarity as to which system owns what data (e.g. ERP owns stock quantities, WHM owns stock location) and the interfaces need to be tested and working.

3. Make rational decisions about when to solve problems.

Data issues often arise because time and commercial pressures make shortcuts necessary. Getting data right may be a matter of diminishing returns, as obscure problems can be very difficult and time-consuming to fix, and they may just not be worth it!

The most important thing is to make rational decisions about your data. List the data problems, estimate the necessary effort for solving each of them, and the business impact. If short-term pressures mean that a problem won’t be fixed now, then perhaps it’s on the list for next month. In the meantime, monitor its impact. It may make sense to tolerate a problem for now. It will never make sense to sweep it under the rug.

Even poor systems can work effectively if the data is structured, maintained, and policed. Most importantly, this is a good platform for system improvements: maintaining data quality can eliminate a whole range of problems and inefficiencies, can boost profitability, and can give everyone new energy as less time is wasted on distractions and snags.


Manufacturing Content Series:

Part 1: The Six Key Trends of Manufacturing 4.0
Part 2: C-Suite checklist for successful MRP/ERP projects

Part 3: Getting data right


Freeman Clarke is the largest and most experienced team of IT leaders. We frequently work with manufacturing clients to help deliver transformational programs. We work only for you: we are entirely independent of any technology or suppliers. Contact Us and we’ll be in touch for an informal conversation

The Future of Manufacturing Part 2: C-Suite Checklist for Successful MRP/ERP Projects

Our previous installment on the future of manufacturing discussed the main trends and their effects on mid-market businesses.

In this installment, we discuss something of direct importance to mid-market manufacturers: Material Requirements Planning systems (MRPs), which help manage manufacturing processes, and Enterprise Resource Planning systems (ERPs), which integrate your main businesses processes.

More specifically, how to ensure you get them right.

A manufacturing company’s internal efficiency and effectiveness are highly reliant on sound MRP or ERP systems. But all too often we meet CEOs whose systems just tie them in knots, add cost, and hamper customer service. These systems become a brake on expansion and growth.

Large systems projects are expensive exercises. And yet the results are often disappointing and rarely meet their business objectives. And then you are stuck with them: MRP or ERP systems generally have a lifetime of seven years or more. Get it wrong, and you can repent at leisure!

How can you avoid this?

This checklist provides some key pointers. It can be a useful review even if you’re halfway through, or a primer if you’re about to start.

If you’d like to talk about your manufacturing challenges,
Get in touch

1. Get the business objectives clear.

Has there been an open workshop in the boardroom to agree on the basic business objectives? The objective isn’t to implement a new MRP or ERP, it’s to deliver specific business outcomes…what are they? Has everyone agreed on them?

Be specific. For example, an objective may be to halve the manufacturing cycle/throughput time; to remove four FTEs by avoiding any rekeying between the ERP and website; or to eliminate errors in labeling by automating label production.

2. Be clear about the key requirements.

In everyday business language, document the key things the systems must do, or must enable, or must achieve. This might be a list of forty or fifty statements, such as, Telesales handling staff can see accurate stock info and pricing on any products within thirty seconds.

Often the emphasis is on how you go about things today, but the focus should be on outcomes, as there may be better ways to get there. And all department heads need to be involved, to agree, and to sign off – yes, put ink on the paper!

3. Get specific about who is involved and who is accountable.

First, pick the right people to own the project. Are there experts on the business who will need to be assigned to the project team? Will their positions need to be filled?

And don’t assume that every techie in your business understands MRP or ERP projects. Increasingly the line is blurred between shop-floor technology, automation, and information technology. The Ops team (who might have owned this project a decade ago) may no longer have the right skills or experience.

Second, everyone must be clear on their roles in the project. Are you aiming to involve some of your own people in the details so they can become expert superusers of your new system? Who in the C-suite is accountable for delivery? This should include not only delivery of the technology, but all the business outcomes identified at the start.

4. Get clear on the cost-benefit model.

Although you don’t know the detailed costs yet, you can establish the cost-benefit model. This means understanding how this project will deliver hard benefits, so that when compromises are necessary, you can identify what’s worth keeping and what you can drop. The cost-benefit should be based on improvements in Key Performance Indicators (KPIs)—for example, identify the target on-time, in-full (OTIF) and compare to current measurements of the same KPIs.

5. Select your products rationally.

There are hundreds of systems available: IFS, Nav, AX, SAP, SAGE, Epicor, Oracle, Syspro to name a few! This can be a minefield—but not if you’re clear-headed about it. Once you have all your requirements, use them to create selection criteria, a scoring system, and clear questions to ask.

You need to weigh up the advantages of integrated ERP with multiple specialized systems, which may offer better features but greater complexity.

For example, it can make sense to select a standard ERP and a specialist warehousing product for better goods handling (picking, putaways etc.), or a dedicated Manufacturing Execution System to collect detailed process efficiency data. Make sure all the business stakeholders are part of the decision-making, so they have a vested interest in success.

6. Select your partners rationally.

A partner will configure, customize, and support your systems. As you will need to have a long-term relationship, it is critical that there is trust and a good cultural fit. Get references, and check everything! Ask around: are they experts in your sector? Are they financially secure? Have they got a stable team?

And start early, so that you have time to negotiate a good price and contract rather than having to cave in due to pressing deadlines.

7. Insist that your partners have a plan.

The vendor or implementation partner must provide a credible plan, and you must extend it to your own plans for things like communication, data setup, and retraining. Most importantly, the plan needs to show all activities to deliver the business objectives, not just delivery of the tech; and the plan should include all the resources and commitments, not just the supplier.

8. Define target business processes.

Working with the implementation partner, you need to design your target processes.

Many MRP and ERP projects fail because companies try to configure new software to match the way they always have worked, as opposed to designing the most efficient processes.

This often leads to expensive custom programming; and, if the implementation partner is charging for this, then their salespeople will be delighted to help you make bad decisions!

9. Identify process and organizational changes.

With new systems come new ways of working. And change can be hard for some. You need to plan, document, and carefully roll out these changes, and communicate frequently with everyone involved. This may be the most difficult part of the entire project, especially if some of your teams are remote and not often in the office. It will not happen by accident; without proper management, many people will go to great lengths to avoid changing how they do their jobs!

10. Take the opportunity to clean up your data.

Start cleaning your data today. Because getting the data right can be make-or-break for a new system, and this task can be the biggest and most critical part of the project. After all one of the key benefits of an ERP or MRP is how the information helps decision-making; if you take away that with poor and inaccurate data, you’re taking away the whole point.

Think about product codes and bills of material and how they can best be structured to deliver the information the business needs. Seriously, start now. Don’t wait until go-live. In our experience, those who wait end up bringing inaccurate and unclean data across to the new system!

11. Manage device integration.

Devices are going to be integrated with these news systems, so get started on identifying them and testing as soon as possible. For example, shop-floor data collection devices like scales, environmental sensors, barcode scanners, or RFID trackers are increasingly key sources of efficiency, so they can’t be an afterthought.

Remember to test for more than just if the new software works. Are the devices suitable for the environment? Consider temperature, humidity, vibration, etc. Whenever you can, involve the device suppliers.

12. Run a testing and conference-room pilot.

By making the vendor run their product through your business processes, you can check that the system and business practices will fit and that the key staff are ready for change. A pilot is more than a last chance to stop problems. It’s a great way to get superusers onto the system; it may also be an opportunity to identify additional benefits.

13. Manage the implementation / cutover / go-live.

A “big bang” go-live can be complicated and risky; different parts of the new system may be ready at different times; and different phases will deliver different benefits. So there will normally be a progressive adoption of the new system(s) and decommissioning of the old ones. This needs to be thought through and carefully managed.

14. Train and monitor staff.

Staff will need training and coaching in how to work with new systems and processes. There may be a period of de-snagging and minor changes. This needs careful monitoring and policing to ensure that employees have clear ways of working and do not adopt bad habits. You should be prepared for some pushback: for many, change is daunting and can cause stress and resentment. And when they don’t yet fully understand the new way of working, some may blame the system for mistakes or slower processes.

15. Get specific about who has ownership moving forward.

The project owners need to ensure the original business objectives and cost benefits materialize. But this is also the moment when the new system becomes “legacy,” so it’s critical that ongoing ownership is clear.

Ongoing monitoring must be part of the routine, and new issues must be addressed quickly and without a fuss. Whose job is that?

In addition, you will need an annual budget for vendor support, for training of new staff, for fixes, and for amendments so the system stays aligned as working practices and products change (as they inevitably will).

Lay the foundation for your future

All too often we see a lack of focus on the key points of this checklist. As a result, projects become bogged down, with overruns of both cost and timescales. Eventually, in the race to finish, the original vision is forgotten, there is no more time or money, and the aim becomes to “just get it done”!

But if you follow the checklist, you greatly increase the risk of success, and along with it, the transformational benefits of a new ERP or MRP system. Many of our clients have achieved significant uplift in efficiency and service and find new confidence to grow because their business starts to feel like a platform for scaling up!

When system issues are no longer on the agenda, the executive team has more time to talk about strategy and growth. And effective systems provide data and reports to feed those conversations.

Get in touch to contact your Regional Director


Manufacturing Content Series:

Part 1: The Six Key Trends of Manufacturing 4.0
Part 2: C-Suite checklist for successful MRP/ERP projects
Coming next:

Part 3: Getting data right


Freeman Clarke is the largest and most experienced team of IT leaders. We frequently work with manufacturing clients to help deliver transformational programs. We work only for you: we are entirely independent of any technology or suppliers. Contact Us and we’ll be in touch for an informal conversation

The Future of Manufacturing Part 1: The Six Key Trends of Manufacturing 4.0

The IT industry often deliberately spreads “fear, uncertainty and doubt” in the marketplace. They create confusion about the future, and then, of course, sell you the perfect solution. So is the so-called “Fourth Industrial Revolution” and “Manufacturing 4.0” part of the usual befuddlement bandwagon?

What is really happening? What are the technologies that will form this change? And what difference do they really make? Read the 6 key trends, but for a top line perspective watch the short video below.

Shop Floor Technology Is Increasingly Information Technology

First, a little context. Historically, there was a clear distinction: your operations teams owned shop-floor tech, and the IT team owned IT. But this gap is rapidly closing. For many companies, the challenge now is to have the right leadership to effectively lead these cross-border initiatives and to deliver value.

The winners will be those companies who are smart enough to use technology and data to meet customer needs more effectively and to innovate ahead of the competition. This is as much about leadership as it is about technology.

We believe there are six key trends to this generation of tech:

  1. IoT/5G
  2. Improved collaboration
  3. Big data, AI and machine learning
  4. Robots/cobots
  5. Servitization
  6. 3D printing

Here’s what they each mean.

1. How Will IoT/5G Make a Difference to Manufacturing?

Just to be clear, “IoT” means the “Internet of Things,” or using connectivity to control machinery and harvest data. “5G” is the fifth generation of technology for cellular networks.

When it comes to manufacturing, IoT and 5G are about incorporating sensors and controllers on the shop floor to make the production activity more visible and controllable in real-time. This requires new systems as well.

Most importantly, it requires skilled personnel to deliver the benefits, which include minimizing costs and maximizing output with more accurate ordering, production, and stock management.

One of the best aspects of IoT and 5G for manufacturers is how it improves reporting. Rather than basing decisions on reports that were manually created a week or a month ago, information flows into your ERP or MRP systems to provide accurate, up-to-the-minute information, with minimal manual intervention.

Ultimately, IoT lowers costs, increases profits, and delivers better quality and service to customers.

Continue reading the key trends below the video.

 

If you’d like to talk about your manufacturing challenges,
Get in touch

2. How Will Manufacturing 4.0 Improve Internal and External Collaboration?

When you hear “Manufacturing 4.0” or “Industry 4.0” it generally means increasingly autonomous systems and information in real-time.

More specifically, Manufacturing Execution Systems (MES) allow the capture of more data about detailed process activities and individual operations on individual items. MES can make use of barcode or QR-code scanning, or automated collection of RFID information, or similar smart-monitoring.

As more real-time information is available, and office IT like Microsoft Teams becomes mainstream, your management, supervisors, and even skilled operators no longer need to be on the shop floor to manage production. Managers and supervisors can see precisely what is happening, managing production in real-time, or detecting issues as they happen. They can also look backwards to understand costs, cycle-times and quality. Managers can assess effectiveness of processes, teams, production batches, and even individual machines or staff.

E-commerce has reset customer expectations across all industries. Your customers will increasingly expect to be able to see and assess the progress of their own orders through your factory

This technology has external implications as well. Fortunately, with Manufacturing 4.0, integration of your production activities with your customers, suppliers and partners becomes possible at a far more detailed level.

3. The Impact of Big Data, Artificial Intelligence and Machine Learning in Manufacturing

Of course, large volumes of data create new challenges as well as opportunities. Manufacturers need new tools to understand data patterns. Technologies such as Tableau and Snowflake make vast number-crunching and visualization easy, and once the data is digestible, it’s a small step to introduce automation for some aspects of decision-making.

It doesn’t have to be rocket science. It can be a structure of simple rules, such as alerting the customer to reorder ahead of time. Or it can be sophisticated Machine Learning and Artificial Intelligence.

The combination of data, AI, and machine learning is already proving to be extremely powerful. But it doesn’t mean that people no longer matter. The issue is often one of skilled leadership. Manufacturers need tech-savvy leaders to set the vision and to create a culture of data-driven, analytical decision-making. With the right tech leadership it becomes much easier—and more profitable—to exploit all this new technology.

4. The New Generation of Robots and Cobots

In the past, due to their high cost and the production volumes necessary to justify the expense, industrial robots were often only used by large manufacturers.

But now we have a new generation of collaborative robots, or cobots, which automate tactical elements of production activity. Their simplicity and flexibility mean that they are easier to deploy and can quickly deliver value, which makes them far more appropriate to the mid-market.

Again, implementing this fantastic technology creates a leadership challenge. Cobots are often configured and programmed by skilled production operators working in tandem with IT staff. Again, you’ll need a skilled IT leader who can facilitate this collaboration.

5. Servitization Creates Greater Value

“Servitization” simply means the shift from selling products to selling services. We live in an era where companies want to buy everything “as a service”: manufacturers can increasingly look to a future where they charge customers for using their products rather than buying them. Whether it’s car tires, aircraft engines, or workwear, manufacturers are charging recurring revenues or licenses to their customers for the use of the products, often with support and replacement bundled in.

Servitization will increasingly work in tandem with other aspects of Manufacturing 4.0. Perhaps the greatest opportunities are in monitoring and communicating with your products while in use. This enables new models for preventative maintenance, guaranteed service and support.

We will also see entirely new opportunities for value-added services, along with greater opportunities for upselling and better customer lock-in. The bottom line is that reliable, recurring revenues are more valuable than one-off sales. Manufacturers who make this change will become increasingly dominant.

6. The 3D Printing Revolution Continues

3D printing will have a revolutionary effect on many aspects of manufacturing. Rapid prototyping and iteration are already becoming the norm, but the real revolutions will be in mass customization where customer expectations will undergo a major change. Customers will expect endless product versions and variations.

For manufacturers, the benefits are also enormous: 3D printing now allows for a wider range of materials, and data can be included directly onto the product. For example, QR codes or human-readable product IDs can be printed as part of the production process, with obvious benefits for process monitoring and stock management.

And 3D printing will massively reduce the need for stock holding, especially for spares, which will free up cash. This may have a transformative effect on smaller companies and their ability to invest in these new trends.

What This Means for Everybody (and the Midmarket)

Along with the increased flexibility for customers and manufacturers, the above trends will have enormous, worldwide effects.

These changes will reduce labor costs, which in turn will reduce the attractiveness of low-cost economies as well as economies of scale. Together with an increased post-COVID focus on security of supply, this will enable a return to more local manufacturing.

Finally, it’s worth noting that more local manufacture would be a reversal of decades (or centuries) of growth in global trade of manufactured goods. Despite forecast increases in consumption, a recent ING report estimates a reduction in world trade by as much as 40% by 2040!

The reduction will affect a wide range of industries, from shipping to insurance, and may have very broad-ranging geopolitical ramifications as well. It won’t be the first time that manufacturing has changed the world!

It seems then quite reasonable to speak of another industrial revolution. But while many in the IT industry will want to sell solutions, we see it more as a leadership challenge. We believe that ambitious mid-sized businesses will find huge opportunities, so long as they have the right leadership in terms of their IT and technology.

Get in touch to contact your Regional Director


The Future of Manufacturing Content Series:

Part 1: The Six Key Trends of Manufacturing 4.0

Coming next:

Part 2: Board checklist for successful MRP/ERP projects

Part 3: Getting data right


Freeman Clarke is the largest and most experienced team of IT leaders. We frequently work with manufacturing clients to help deliver transformational programs. We work only for you: we are entirely independent of any technology or suppliers. Contact Us and we’ll be in touch for an informal conversation

Does Your Business Run on Excel? Undo!

For Americans, this may seem like a distant footnote. But bear with me.

One of the UK’s leading health agencies, Public Health England (PHE), has revealed a massive under-reporting of covid-19 cases due to an Excel blunder. The truth is that many mid-market businesses are too dependent on Excel. We’ve all become stuck in an Excel circular reference. The challenge is how to escape.

Excel has become ubiquitous for a reason. It is extremely simple to start and amazing what you can do quickly. But for some mid-market businesses, Excel has become an unplanned core back-office system. It is often the link between systems and processes; it is sometimes used to store critical data; and it is often used to present and explore data throughout the business.

Finance people can’t get enough of it. The rest of us can’t remember all its functions, but we still use it anyway.

But why is it dangerous?

  1. Excel is fundamentally unstructured and easy to change. This makes it incredibly convenient. But it also allows for unending tinkering. And it can be very difficult to assess the impact of changes and to identify errors.
  2. Excel files, passed between people by email, or shared in folders (or worse on USB drives!) are a recipe for error, confusion and unauthorized access. Good systems go hand-in-hand with good processes, and Excel encourages neither.
  3. Excel is a dead-end. There is no “pathway” to formalize an Excel process into a more managed system with proper controls, an audit trail, security, data management and error-checking. Excel is not a sound basis for automation or integration.

In the meantime, see our ERP and Integration Knowledge Center for more on smoothing out systems and processes


In short, Excel can lead a mid-market business to the point where it is very difficult to scale and where the business is exposed to fraud or blunders like PHE’s. But since it works most of the time, and the cost of replacement looks high, the easiest thing is just to carry on with it.

But the bottom line is that to run a business well you need integrated systems that support efficient, agile processes, and deliver useful management information to enable decision making. You won’t get all that with Excel.

Your company’s systems strategy should have some principles to avoid an overdependence on Excel. What might they be?

  1. Use Excel—when it’s appropriate. For example, new ideas, new opportunities, or an informal look at data. Use Excel as a personal tool for tackling problems.
  2. Establish your business’s timeframe or scale-of-use for Excel. For example, “We won’t use Excel to manage this project for more than nine months.” Or: “It wouldn’t make sense to run a new business line on Excel once revenue exceeds $100k per month.” Or: ‘We always ring alarm-bells when someone starts using Excel’s built-in coding platform’.
  3. Here’s the tricky part: you need an integrated set of systems and processes that can smoothly replace Excel when the time comes.

Excel is an amazing product; it is ubiquitous for a reason. But its convenience can be its downfall—or yours. Like all powerful tools, handle it with care!

If your company needs help replacing Excel with an affordable integrated system, get in touch. We have a lot of experience helping mid-market businesses streamline their systems, and we’re always up for an informal chat.

Freeman Clarke is the largest and most experienced team of part-time (we call it “fractional”) CIOs and CTOs. We work exclusively with ambitious organizations and we frequently help our clients use IT to beat their competition. Contact Us and we’ll be in touch for an informal conversation.

Manufacturing Insights — Part 2: Checklist for Successful ERP Projects

This is the second of our three-part series on the future of manufacturing. Check out Part 1: The Impact of the Internet of Things, and Part 3: Getting Data Right.

In our previous discussion, we mentioned how the Internet of Things can integrate devices into enterprise resource planning (ERP) systems, providing up-to-the-minute information with minimal manual intervention.

This article is about new ERP projects. These can be an expensive exercise and the results won’t meet business objectives unless the project is done right.

It’s a crucial question because manufacturing companies rely on sound enterprise resource planning. They can’t be efficient and effective without it. So how can you avoid costly and time-consuming mistakes?

Our ERP Checklist provides some key pointers. If you’re about to start, consider it a primer. It can be a useful review though even if you’re halfway through an ERP project.

  1. Get the business objectives clear. The objective isn’t a new ERP. It’s to deliver specific business outcomes. So what are they? Make sure you schedule an executive-level workshop to hammer them out. Be specific and make sure these objectives have been clearly delineated before you start. Some examples: Halve the manufacturing cycle/throughput time; Remove four FTEs by avoiding any rekeying between the ERP and website; Eliminate labeling errors with automation.
  2. Identify the key requirements. Document the key things the systems must do, or must enable, or must achieve. This might be a list of forty or fifty statements in everyday business language — for example, “Telesales staff must see accurate stock info and pricing on any products within thirty seconds.” Often the emphasis is on current processes, but the focus should be on better outcomes. All the heads of departments need to agree and to sign off (yes, put ink on paper!).
  3. Identify who is involved and who is accountable. Who is accountable for delivery? This should include not only delivery of the technology, but all the business outcomes identified at the start. Are there experts in your business who will need to be on the project team? Will they need their jobs backfilled? Is everyone clear on their roles? Will you involve some of your own people in the details, so they can become superusers?
  4. Get clear on the cost-benefit model. Although you may not yet know the detailed costs, you can establish the cost-benefit model. This means understanding how this project will deliver hard benefits so that, when compromises are necessary, you can identify what’s worth keeping and what to drop. The cost-benefit should be based on improvements in key performance indicators (KPIs): for example, “identify the target OTIF (on time in full) and compare to current measurements of the same KPIs.”
  5. Select your product(s) rationally. There are hundreds of systems available: IFS, Nav, AX, SAP, SAGE, Epicor, Oracle, and Syspro, and so in. Clear the field by letting the business requirements guide you: if you have specific selection criteria and a scoring system, you’re less likely to get dazzled by salespeople. Make sure all the business stakeholders are part of the decision-making process, so they have a vested interest in success.
  6. Select your partner(s) rationally. A partner will configure, customize and support your systems. As you will have a long-term relationship, it’s critical that there is a good cultural fit and trust. Get references, and check everything: are they experts in your sector, are they financially secure, have they got a stable team? And make sure you have time to negotiate a good price and contract, rather than caving due to pressing deadlines.
  7. Create a reasonable and comprehensive plan. The vendor or implementation partner needs to provide you with a credible plan, and you need to add your own plans for things like communication, data setup and retraining. Most importantly, the plan needs to show all activities to deliver the business objectives, not just delivery of the tech, and should span all the resources and commitments, not just the supplier’s.
  8. Define target business processes. Working with the implementation partner, you need to design your target processes. Many ERP projects fail because companies try to configure new software to match the way they always have worked. This often leads to expensive custom programming.
  9. Prepare for process and organizational changes. New systems bring new ways of working. These need to be planned, documented and rolled out carefully. Communicate with everyone affected. Without proper management, many people will go to great lengths not to change how they work!
  10. Prepare for data migration, cleansing, and setup. This task can be the biggest and most critical part of the project. Take this opportunity to clean your data and improve its accuracy — after all, one of the key benefits of an ERP is the information it can provide. Start cleaning today — don’t wait until the point of go-live. Don’t migrate inaccurate data to the new system!
  11. Plan device integration. Before integrating shopfloor, in-vehicle, or other devices with new systems, test them, hopefully in collaboration with device suppliers. For example, are the devices suitable for the physical environment? Consider temperature, humidity, vibration, and the like. Plan, manage, and test your device integration, and then test it again!
  12. Do your testing and conference room pilot. By making the vendor run their product through your business processes, you can check that the system and business practices will fit and that the key staff is ready. It’s a great way to get superusers onto the system; it may also be an opportunity to identify additional benefits that weren’t thought of at the beginning — or a last chance to spot unforeseen problems!
  13. Phase the implementation/changeover/go-live. A “big bang” go-live can be risky. Different parts of the new system may be ready at different times; different phases will deliver different benefits. So plan for a phased adoption of the new system(s) and decommissioning of the old ones. This needs to be thought through and carefully managed.
  14. Train and monitor staff. Staff will need training and coaching. And there may be a period of tweaks and minor amendments. This needs careful monitoring to ensure that employees don’t adopt bad habits or workarounds. Also, for many people, change is daunting. It can be stressful for people when they have to do their jobs in new ways, so make sure you’re allowing them to communicate their concerns.
  15. Review frequently and maintain ownership. The project owners need to make sure that the business objectives and cost benefits materialize. And then it’s critical to have clear, ongoing ownership so the objectives and benefits don’t slip away down the road. Ongoing monitoring must be part of the routine, and new issues must be addressed quickly and without a fuss. There needs to be an annual budget for vendor support, for training of new staff, for fixes, and for amendments so the system continues to remain aligned as working practices and products change — as they inevitably will.

A new ERP system is a powerful way to help your business grow. But too often we see lack of focus on these key points, and as a result project costs balloon and the project gets bogged down. But when an ERP project is done right, the benefits can be transformational. Many of our clients have found new confidence to grow simply because suddenly their business had a platform for scaling up.

Read the rest of our special series on the future of manufacturing:

Manufacturing Insights – Part 1: The impact of the Internet of Things.

Manufacturing Insights – Part 3: Getting data right.

Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.

Manufacturing Insights — Part 1: The Impact of the Internet of Things

This is the first of our three-part series on the future of manufacturing. Check out Part 2: Checklist for Successful ERP Projects, and Part 3: Getting Data Right.

The Internet of Things, as you likely already know, is the idea of implanting Internet devices in everyday electronics, like your appliances—it’s having your fridge let you know when it’s time to buy more milk, or even better, ordering it for you.

Lately we hear a lot of talk about the impact of the Internet of Things on manufacturing. We’re seeing buzzwords like the Industrial Internet, Industry 4.0, and smart factories. So what’s really going on?

IT companies like to baffle the market with buzzwords. So it’s important to remember that the ideas are straightforward. In simple terms, the Internet of Things in manufacturing is all about technology on the production line—incorporating sensors and controllers to make production more visible, more efficient, and more controllable in real-time. It means that your staff can deal with customer requirements more accurately: managing stock, orders, and production to minimize costs, while maximizing output and quality.

In manufacturing, the Internet of Things will also help with reporting. Some companies use manually created reports, from weeks- or months-old data, for planning. The Internet of Things integrates devices into enterprise resource planning (ERP) systems to provide up-to-the-minute information accurately, with minimal manual intervention.

Of course, it’s not a huge step from there to automating some aspects of decision-making. This can be anything from a structure of simple rules to sophisticated machine learning and Artificial Intelligence.

For manufacturing businesses, the Internet of Things will impact on customers as well. Your customers will increasingly expect to follow the progress of their own orders through your factory. And with the Internet of Things, integration of production activities with customers, suppliers, and partners becomes possible at a far more detailed level.

For the manufacturer, though, perhaps the greatest opportunities will be monitor and communicate with your products after they’ve been shipped. You’ll get information about your products when they are in use, enabling new ways to offer maintenance and support, and new avenues for value-added services.

Looking further into the future, we believe that the more revolutionary changes in manufacturing will come via 3D printing. Rapid prototyping and iteration are already becoming the norm, but the real revolutions will be in mass customization. Endless product versions and variations will become commonplace.

3D printing will also massively reduce the need for stock-holding, especially for spares, which will free up cash. This may have a transformative effect on smaller companies and their ability to invest in new trends. We believe that ambitious mid-sized businesses will find huge opportunities in this change.

Finally, it’s worth noting that according to some experts, these trends towards local manufacturing will reverse decades (or centuries) of growth in global trade of manufactured goods. A recent ING report estimated a reduction in world trade by as much as forty percent by 2040! This will affect a wide range of industries from shipping to insurance, and may have very broad-ranging geopolitical ramifications as well.

Well, it won’t be the first time that manufacturing has changed the world. But before that happens, read on to find out how the Internet of Things can transform your business now.

Read the rest of our special series on the future of manufacturing:

Manufacturing – Part 2: Checklist for Successful ERP Projects

Manufacturing – Part 3: Getting Data Right.

Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.

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Graeme Freeman
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