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Preparing an action plan requires an in-depth look at your company's current situation, problems, opportunities, and strategies. By developing this plan you can determine what tools are needed and where they are needed in the ERP MRPII implementation. The people responsible for preparing this plan include the company's executives, operating managers from each functional area and, in virtually all cases, an outside consultant/facilitator.
Initial education is designed to provide company-wide education on the principles, concepts and applications of ERP MRPII as they apply to users' job functions and to prepare the organization for implementation of improved business processes. This is especially critical for those responsible for designing and using the new planning and control tools. This process will develop a high level of understanding among employees of what the company is striving to achieve, why it is so important, and how it will enable everyone to perform their jobs more effectively.
Employees throughout the company will generate plans and schedules at all levels based on how the company is operating and the knowledge gained from the first-cut and initial education programs. These planning and control processes include: sales and operations planning; master production scheduling; material requirements planning; detail plant and supplier scheduling tools; and others. During this stage of the project, company policies and procedures should begin to take shape.
Key measures are defined that depend upon your company, its markets, and product categories. Actual results are compared to previously established performance goals. Among items that should be measured and reported monthly are customer delivery, performance to shop schedules, on-time performance from suppliers, and others. The list should also include data integrity measurements, such as inventory record accuracy, bill of material accuracy, item master data accuracy, and others.
Following successful cutover of the planning, scheduling and execution system, an analysis of the company's new situation, problems and opportunities should be performed. The outside consultant/facilitator provides verification of each new tools' effectiveness and a definition of continual improvement steps that should be performed. This critical step should not be avoided or the company's drive for operational excellence will certainly stall. The outcome of this process should be a detailed plan, a road map, of the company's continual improvement process.
ERP is an integrated management process for company-wide management of a business enterprise. The concepts and techniques of ERP must be applied across all company functions. ERP integrates management processes to assure that decisions and planning are born out of the same databases, assumptions and methodology and language—and includes Continual improvement techniques and supply chain management. ERP solutions focus on optimizing productivity by focusing on planning and executive reporting of the Enterprise as an integrated unit. When used as an integrated management process companies significantly improve their business performance and competitive positions.
ERP is much more than a manufacturing software tool. It is a management philosophy for making and keeping promises—to better manage the supply and demand sides of the business using directly integrated management systems. The focus is on results –improving competitiveness in the marketplace and improving overall company business performance.
Resource utilization must be properly measured to properly manage the supply and demand sides of the business. Inefficient utilization of resources drives costs up and customer service down. Methods and approaches for resource management and ERP planning are changing with the introduction of Hoshin Kanri.
Effective ERP requires that integrated management processes extend horizontally across the company, including product development, sales, marketing, manufacturing, and finance. It must extend vertically throughout the company's supply chain to include the acquisition of raw materials, suppliers, customers, and consumers. The fundamental purpose of ERP is to establish a process that links projected demand plans to supply plans, so that the resources of manufacturers, their suppliers, and especially their customers are utilized in the most efficient and cost effective way.
To do so requires a process for anticipating demand and planning and scheduling resources in a manner that supports a company's strategic and financial goals.
There are five major elements required for correctly defining a closed-loop planning & scheduling system:
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Strategies must be tied to tactics, supply is resolved with demand, the financial system is tied to the operating system, aggregate planning is translated into detailed planning, and planning and execution are linked together via a two-way flow of information and a spirit of cooperation among all functions.
ERP is a people process supported by the computer, rather than the other way around. People -- and their behavior and discipline in utilizing the ERP process -- is vital. When people understand how to utilize the ERP process, tools, and techniques, the data and information will be highly accurate, and they will make sound decisions.
ERP creates organizational synergy that drives the development of highly effective processes that are properly managed for continual success. The dramatic results are derived from a deep organizational understanding of ERP philosophy. Proactive strategies become the mainstay of the company-wide operating system. Without this organizational understanding, well-intended efforts will deliver wrong results. Organizational profitability is derived from the organization’s overall willingness and ability to improve. Therefore people at every level must see beyond their local functions and interactively understand how their individual actions increase or decrease profitability.
ERP & Hoshin Kanri…
ERP Implementations…
Profit-Ability Improvement... (¬Click here to see definitions)
Profit-Ability Management Principles... (¬Click here to see definitions)
People, Empowerment & Profit-Ability… (¬Click here to access articles)
Hoshin Kanri & Deming's Plan-Do-Check-Act... (PDCA) Cycle…
An integrated business operating process that links strategic plans and business plans to sales plans and operations plans.