Friday, October 31, 2008

What are the probable barriers and constraints for ERP implementation?

ERP CHANGE MANAGEMENT

Activity


If you are new with this web log we request you to read preface first.


What are the probable barriers and constraints for ERP implementation?

Change manager is to identify the list of probable barriers, which can be faced during the implementation before it gets started. For inventory business area, the most probable constraints can be listed as follows:

 

Many of the people working in this area are not so educated. Therefore, they are not capable to be trained with the new high technology system and use it.

Many of the users are not having the potential and capability of participating in the implementation process and following the changes in processes and practices. This is a serious issue when the users are mostly old and not fresh.

 

Change resistance is one of the most important stop points for any ERP implementation. This resistance can be due to different reasons, which must be identified by the change manager.

Some of the reasons are:

  • The worries which users have about new system. We listed the worries in the previous section.
  • The infrastructure required for smoothly using the ERP system is not available in the inventory locations.
  •  This infrastructure refers to :
  • Network infrastructure: Non-availability of network can postpone the actual use of the systems. This delay can cause the users to loose their interest and so the entire implementation will fail.
  • Industrial Automation: ERP covers the automation layers 2,3,4 but not the layers 0,1. The low layers must be covered by industrial automation systems like PLCs, DCS, SCADA etc. Therefore, when these systems are not available it is very difficult to input data to ERP system and the users mostly cannot use it.
  • Item coding structure is not there at all in the entire organization.
  • Asset coding structure is not available at all.
  • Some of the materials kept in warehouses and sub inventories are not measurable.  In the other words there are not measurement equipments for them. So transaction data for those items can not be captured in the system.

 

Change manager should plan to resolve the above barriers before the real implementation is started.

 

Thursday, October 30, 2008

Users’ (organizations') worries and concerns’ about implementing ERP?

ERP CHANGE MANAGEMENT

Activity



If you are new with this web log we request you to read preface first.

In this post we answer this question:

What are the users’ (organizations') worries and concerns’ about implementing ERP System?


  • Loosing their job. “ I will loose my job when system is running and doing everything.”
  • System might mistakes and I will be responsible for the mistakes.
  • System will make me busier because I have to do manual work as well as new system.
  • My information will be shared to everyone in the organization.
  • System makes conflict with my expertise. “I can not trust the information which are passed to me from other areas through the system”
  • I cannot trust on the calculations done by system because I do not know about them.
  • Will it be possible to extend the system in future?
  • Is there enough flexibility in the system to cover the improvement in the process when going ahead?
  • I will be dependent to system vendor for maintaining system.
  • System may fail any time and cause disruption in my work and manager claims on me.

ERP Change Management job descriptions (Functional Leaders)

ERP CHANGE MANAGEMENT

Activity



If you are new with this web log we request you to read preface first.

In this post we discuss about the functional leaders jobs descriptions.


Functional leaders:


    • Leading and supporting power users/key users in related department
    • Distribution of tasks assigned to his team by the Project Manager to appropriate power user and report on the progress of these tasks to the Project Manager.
    • Control of progress of the tasks assigned to his team
    • Quality assure deliverables prepared by his team
    • Escalating unresolved problems and issues to project manager.
    • Attending training and provide support during system setup.
    • Providing (in coordination with his team) input to process design.
    • Providing (in coordination with his team) input to the development of test scripts and perform acceptance testing.
    • Preparing (in coordination with his team) training material with input and support from project manager.

Wednesday, October 22, 2008

ERP Change Management job descriptions (Project Manager)

ERP CHANGE MANAGEMENT

Activity


If you are new with this web log we request you to read preface first.

In this post we discuss about the project manager jobs descriptions.



Project manager:

  • Review the project plan and all project deliverables and approve the same
  • Ensure that the project produces the required solution to the required standard of quality and within the specified constraints of time and cost Schedule resources from company side and coordinate tasks
  • Ensure that the right staffs are being involved at the appropriate stages of the project
  • Balance the demands of business, users and suppliers
  • Ensure internal and external communications are efficient
  • Build the groundwork for the implementation
  • Monitor the project team performance and ensure that all team members are completing their assigned duties in accordance with the project plan
  • Monitor the project progress according to plan and raise any issues that impact the project progress
  • Take effective action to recover the original plan, or to minimize the variance
  • Arrange to gather all required information for the project progress and ensure that any change in the information is promptly and properly circulated.
  • Ensure that user needs and expectations are being met or managed
  • Ensure that all company's project documents (hard copy and electronic formats) are filed and archived properly.
  • Prepare a transfer of technology program, report on the progress against that program and recommend any improvements.
  • Report to the Project Sponsor
  • Prepare a newsletter on the progress of the project and ensure its proper circulation in a timely manner.
  • Ensure that the project produces the required solution to the required technology infrastructure
  • Ensure that the system (H/W and S/W) is set up and installed in a proper manner

Tuesday, October 21, 2008

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Dear ERP expert,


you can now be the followers of our web log and introduce your self to the world.

Just click here and be ERP followers or check right side of the web log.




Your ERP Change management team

ERP Change Management job descriptions (Project Sponsor)

ERP CHANGE MANAGEMENT


If you are new with this web log we request you to read preface first.

As we said in previous post, from now on we talk about the job descriptions in ERP Change Management project.

This post about project sponsor.


  • Provide direction for the project
  • Confirms project objectives fit with the overall company program strategy
  • Maintain a thorough liaison throughout the project with company senior executive management
  • Conflict management
  • Chairs the project Steering Committee meetings
  • Manage and resolve contractual issues with the vendors
  • Ensure a proper strategy for know-how transfer

What are the roles of project team and business managers during ERP Inventory system implementation?

ERP CHANGE MANAGEMENT


If you are new with this web log we request you to read preface first.




What are the roles of project team and business managers during inventory system implementation?

Managing director protection is one of the key success factors for any development and change process in any enterprise. One of the key rolls of project manager is to make managing director believe in the benefits of the new system and the related changes which are going to be implemented over the enterprise. So project manager must setup periodic meeting with managing director to issue the required information to him and convince him about the benefits. This information must be selected from the expressions already prepared under the topic of awareness or desire phase. Obviously the selected information must be those which nominated for managing director and top managers which satisfy his high level needs.

Also project manager must request managing director to force his top managers to challenge with project manager.

Convincing the owners of business areas (top managers) to make them believe in new system and changes and getting them ready is the other key role of project manager. So project manager must setup sessions in all phases of the project with top managers who owe business areas. In this sessions project manager must make business area owners ready to accept the changes.

Getting managers ready for changed is very important to assure the success of change process. This process is not a one-day task. It should be considered as a continuous process. In the other word you can not expect top managers to accept and follow changes immediately after go live if you do not create the readiness for changes during the entire implementation phases.

So project manager must plan some accrual sessions with top managers from the begging of the implementation and follow up these sessions all over the phases.

Project manager in each session must discuss with top managers about part of the messages which already have published about the system benefits and needs under awareness and desire topics. So that the top managers believe in benefits of the coming changes for their area.

Project manager must communication with owners of business areas to answers their questions and resolve their issues. So that the owners will sense they are collaborating in the process of applying changes. They should not feel they are put aside and changes are to them beyond their desire.
Project managers must take action to be sure that expressions for awareness and desire creation are published to the appropriate users at right time.

Project manager must force the project team to sit with their users periodically to convince them about the benefits and answers their questions and resolve their issues.

In next posts we will talk about project team job descriptions.

What kind of reports could be extracted from inventory system after implementation?


ERP CHANGE MANAGEMENT


If you are new with this web log we request you to readpreface first.



What kind of reports could be extracted from inventory system after implementation?


These are some kind of reports, which can help project team to attract users' desire:

  • We can get reports i.e. average on hand quantity, usage rate and values for those items that have maximum/minimum usage in specific period.
  • The average lead-time from requesting to delivering items from inventory
  • Items with maximum inputs to main stores and their information
  • Inventories with maximum/minimum inputs/outputs
  • Inventories with maximum/minimum value
  • Items value (maximum/minimum) with no request in specific period
  • Average item waiting time in receipt location
  • Items value in receipt location
  • Returned goods values in last period

How is the ROI of Inventory Optimization measured?


ERP CHANGE MANAGEMENT


If you are new with this web log we request you to readpreface first.

How is the ROI of Inventory Optimization measured?

Inventory optimization systems add value by recovering profit from inventory in the following areas:

  • Increased profitability by avoiding markdowns and obsolescent write offs.
  • Lowered working capital cost of holding excess stock through redistributing excess
  • Better purchase order management
  • Better cost management associated with space utilization, both at warehouses and stores.
  • Lower transportation costs through network planning
  • Eliminating excess stock by accurate forecasting of demand
  • Increased customer service levels
  • Improved product mix
  • Dynamically reduced safety stock and therefore holding costs.
  • Lost sales reduced.
  • Slow moving items treated accordingly.
  • Exception management and event management

Monday, October 20, 2008

What are the benefits, advantages and objective of an ERP Inventory system? (Part 2)

ERP CHANGE MANAGEMENT


If you are new with this web log we request you to read preface first.

What are the benefits, advantages and objective of an ERP Inventory system? (Part 2)

We get following benefits from an ERP system:

  • Fewer shipping and receiving errors
  • Lower total cost per unit shipped
  • Reduced inventory out-of-stocks
  • Reduced losses from stolen, damaged, or misrouted product
  • Reduced order input errors
  • Reduced inventory and warehousing costs
  • Reduced customer service costs
  • Reduced phone communication costs
  • Improved delivery accuracy and timeliness
  • Increased profitability per order and per customer
  • Supply Analysis & Planning, Demand Planning & Forecasting, Inventory Modeling, Replenishment, Distribution and Re-Distribution, Analysis Tools are another capabilities

What are the characteristics of Inventory Optimization systems?

Lead time forecasting – forecasts the most appropriate supplier lead-time for any item or supplier.

Service level analysis – information monitored includes demand history, demand variation, profit margins and lost sales.

Demand forecasting – includes seasonality and life cycles, promotional filters, demand spikes, trend analysis and item profit margins.

Order frequency – correct order frequency analysis can reduce inventory by 10 – 15%

Replenishment – takes into account timing of the order, order point, potential overstock/under-stock situations, promotional information, and production changes.

Network aware – inventory planning is done taking into account the requirements of the entire supply chain network including suppliers and customers.

Collaboration - new browser-based technology allows for planning through the participation of the entire supply chain community. This was previously not possible in the past, where systems were not open to integration.

Sunday, October 19, 2008

What are the benefits, advantages and objective of an ERP Inventory system?( Part1)

ERP CHANGE MANAGEMENT


If you are new with this web log we request you to read preface first.

Till now we have discussed about the messages which are required to build the awareness of the need of change to our users, and better to in these series our inventory users.

Now our users are aware of the need of ERP change, thus we can start second phase of change management activity which is to get their desires to participate in the change.


Regarding to the objective of this web log, we have prepared the messages which must be sent to users.

What are the benefits, advantages and objective of an ERP Inventory system?

Followings are the answers(messages) to the above question:

· Reduction of the total cost of organization through reducing unnecessary inventory.


· Maintain safety stock for each item insures the availability of items in critical situation.

· Considering inspection of part of receiving process for received items.

· Keep unchecked received goods in receiving section separately from usable items.

· Adding qualified goods to the usable inventory after inspection.

· Avoid keeping unqualified goods in the warehouse but rejecting them.

· Lot genealogy is available for tracking from product lot to raw material lots.

· Lot based quality is there.

· Total item specifications can be seen in system.

· We can search items on each specification

· Place and location of item in all inventories are visible in system.

· More than 90 percent of paper operations for purchase requisition, purchase order and item move order from inventory can be omitted.

· We can check on hand quantity of one specific item over all inventories in enterprise.

· We can attach any technical documents and drawings to purchase requisition and everybody in approval hierarchy can see them.

· We can check all receipt items, which are not in conformance with purchase order and control balance between orders and delivered items.

· Most of human communications and physical presents for approving items can be ignored.

· Inventory optimization recovers profit from inventory by making it easier to eliminate excess stock, reduce lost sales and minimize the cost and time in doing so.

· Inventory management tracks the ins and outs of a product/item down to its color and size level, using capabilities such as purchase order process, receipt process, allocation process, distribution process, transfer process, style consolidation process, physical count process, and inventory freeze process

· Do you have effective, fact-based decision-support for identifying and prioritizing actions to stop unnecessary material inflow to inventory by dollar impact? ERP can help you

· Does your decision-support system pinpoint undesirable inventory dollar movement by item? ERP can help you

· Do you have decision-support capability that continuously assesses specific items inventory reduction potential? ERP can help you

· Does your decision-support system help you establish a baseline, set clear targets and provide on-going performance measurement for every item in your inventory? ERP can help you

· Determine the minimum required inventory based on Reorder Point Planning, Min Max Planning etc.

· Elimination of duplicate Inventory items

· Reduction of slow moving Inventory

· Inventory accuracy on physical and Book information

· Utilization of available inventory items

· Possibility for automated item coding by system.


Thursday, October 16, 2008

Second phase of our ERP Change Management project

ERP CHANGE MANAGEMENT


If you are new with this web log we request you to read preface first.

Till now we have discussed about the messages which are required to build the awareness of the need of change to our users, and better to in these series our inventory users.

Now our users are aware of the need of ERP change, thus we can start second phase of change management activity which is to get their desires to participate in the change.


In next posts we will talk about it the messages which should be scattered to different level of Inventory users.

What is the best time, data package and communication channel for each group of users to disseminate the messages?

ERP CHANGE MANAGEMENT


If you are new with this web log we request you to read preface first.



Time and type of establishing communication are important factors for effectiveness of the messages and trainings too. Therefore, you have to consider these two factors and make a decision depending on your situations.

Here are some tips about the subject:

· You should to be sure users have understood and are aware of the new system before delivering system to them.

· Try not to send messages in workload picks such as cycle counts, end of fiscal year and so on.

What are the benefits of ERP implementation for the users involved in inventory system and ultimately for organization?

ERP CHANGE MANAGEMENT

This part is about the ERP Inventory end users and benefits to different level of users.

If you are new with this web log we request you to read preface first.



Who are the end users of ERP Inventory system?

according to our previous discussions, in the following table are messages which should be scattered to each user. As it is shown the table each message is suitable for one or more areas.

If you want to know more about the areas we suggest to read this post.


What are the benefits of ERP implementation for the users involved in inventory system and ultimately for organization?

Benefit --------------------------------------------------Area

ERP system with providing stored items information to responsible staffs, help them respond quickly to their internal and external customers.


2


ERP system with the help of MRP can help company to manage purchase orders and prevent redundant ones.


Mng 1

ERP systems assure existence of the required goods in the required time via applying appropriate replenishment planning procedure for each item.


6 7 9
ERP integrated system makes it possible to check the received goods in accordance with the purchase orders.


4


ERP integrated system assures that only accepted goods in compliance with the required ordered specifications will kept in the warehouse.


1


ERP system makes it possible to categorize the warehouse items from planning point of view and assign the best planning method of category.


1


ERP system organizes the warehouse in locators so that accessing to the required items is very fast and easy.
2


ERP system reduces manual required activities for delivery of requested material from warehouse to consumers via automatic issue process.
2 6 7 8
ERP system provides you with the possibility of on line tracking of raw material batches through the production lines as well as quality cause and effect analyses based on quality of lots.


4 6

ERP system integrates inventory and production and synchronizes them so that fulfilling production orders will be efficiently feasible.


6


ERP system will omit delay in material delivery from warehouse to production via on line information transfer.


6


ERP system gives the sales people power of planning on the market via correct information about finished goods inventory.


8


ERP information system prepares information space to record large number of characteristics for each item.


All


ERP system captures a huge set of attributes for each and very item which determine the behaviour of the item in different transactions.


All


ERP system categorizes purchasing conditions of all items so that purchasing process is predefined for any item and purchasing department will easily follow that.


10


There can be little doubt that well implemented supply chain integration saves labour costs and improves inventory control.
5 Mng

Wednesday, October 8, 2008

Your Valued Opinions

Dear all,

Some of our friends have told us to translate the post in some other languages especially in German, Chinese. 

What is your opinion about that and are you ready to help us for translation? 

Just leave a comment and let us know your opinions

 

Regards

 







Monday, October 6, 2008

Who are the end users of ERP Inventory system? (Part 2-2)

ERP CHANGE MANAGEMENT

This part is about the ERP Inventory end users and their change management messages .

If you are new with this web log we request you to read preface first.



Who are the end users of ERP Inventory system?

according to our previous discussions, in the following table are messages which should be scattered to each user. As it is shown the table each message is suitable for one or more areas.

If you want to know more about the areas we suggest to read previous post.




Messages Area

· For facilitating and receiving goods, inventory staffs should now ordered goods and the date of arriving. 2



· Not accepting non conformance goods from suppliers is a mandate for our organization. 2 4



· Purchase orders information can help inventory staffs for accepting and receiving goods. 2



· Optimizing quantity on hands can remove stresses keeping too high items and materials in inventory. 2



· Proper inventory planning and preventing not required Purchase Requisitions could be result of accurate and up to date inventory balances. 1



· Rapid and easy access to items in inventory requires a proper item organizing in physical locations in inventory. 2



· Quality specifications on purchase orders are required for proper quality inspection on received items. 4



· Non-conformance items prevention is a principle to gain confidence for our finished products quality. 4



· Following production scheduling, is applicable when there are required items in inventory and this can be reached with appropriate inventory planning. 6 7 9 Mng
· Quick responding to inventory customers is a necessity in enterprise. 2 6 7 8
· Organization costs reduction is a result of costs reduction in all areas such as inventory; inventory cost reduction is a result of decreasing of not required items in inventory. 2

Mng
· Decreasing human mistakes as a basic need can be reached by decreasing hand-operated works and using automated processes by workers.


All
· Our company's success is not only dependent on sales, but also on our company's ability to say, "Yes we have that item in stock”.


All
· Our inventory is one of the biggest, if not the largest investment we have in our company.


Mng
· Reduction of unnecessary inventory is a factual need in order to reduction o f the costs in any organization. 1 2 3 Mng
· ERP system help the warehouse people to get rid of unreasonable challenges with consumers about inventory through publishing on hand quantity of any item to any corresponded user on line. 2



· Preventing keeping unqualified goods in the warehouse is a real need to make consumers sure about the items they get from warehouse. 6 7 8

· Ignoring the manual creation of material request from warehouse is a serious need in any organization. 6 7 8

· Automatic creation of material request from warehouse is needed to reduce the unfair challenge between consumers and warehouse keepers. 2 6 7 8
· ERP integrated system is needed to reduce the waiting time of received goods in the receiving location. 2

Mng
· Ignoring manual activities during material issue from warehouse to consumers is very much needed to avoid any problem. 2



· Systematic available quantity control during the process of issuing requested material from warehouses is necessary to save time and avoid human mistakes. 2



· Tracking the supplier lot through the production process is required to claim suppliers on bad quality materials. 2

Mng
· It is necessary to know about the used batch of material in the production of any product so that causes for low quality of product will be discoverable. 4 6


· Material reservation in the inventory is needed to make production planning possible in the factory. 6



· Online information about reserved materials in warehouses is very necessary for inventory people to manage the materials and issue right item to right consumers. 2



· ERP system is an integrated information system which publishes unique data entity about any fact through enterprise.


All
· ERP system makes it easily possible to track and monitor all transactions done on any particular item. 2 6 7 8 9
· Preventive maintenance requires inventory of spare parts to be planned in sync with the maintenance plans. 7



· Inventory planning people need to have on time information about maintenance required spare parts to be able to satisfy these requirements on time. 1



· Effective production planning needs integration between the production planning department and inventory for effective material replenishment planning. 6 1


· Completion of the production plans need very seriously on time supply of the required materials by warehouse. 6



· Every manufacturing enterprise needs coordination and synchronization between production plant and warehouses and on line information transfer between them in order to fulfil customer orders 6



· It is obviously necessary to access to finished goods inventory information to have correct plan for accepting customer orders and ATP (Available To Promise). 8



· Locator controlled organizing of finished goods warehouse is really needed in order to pick the right product for the right customer on the right time. 8



· Efficient production planning needs on line access to inventory On hands information for production people. 6



· Flexible coding structure is a real need to cover the fast grows up of number of items in large enterprises. 1 2


· Item classification is required to have useful desired report on inventory items. 1 2
Mng
· You need registration in a control workspace and share the registered information for all business areas.


All
· Supplying required items on the required time need to raise purchase requisitions on the right time in order to provide purchasing department with adequate time. 10



· We use reports and inquiries daily to extract information that upper management can understand and can use to take appropriate actions, if necessary.


All
· The Total cost of an item is much more important than the price of an item 4 5


· Awareness of purchase order specification can expedites inventory keeper operations. 2



· Awareness of in coming receiving items can reduce errors in receiving activities. 2



· Any mistake in receiving operations, which is the result of lack of purchase order information, will have difficult consequences in inventory and finance. 5



· Too much quantity for some items and shortages for the others is the result of absence of an effective inventory planning and will have some difficulties for inventory staffs. 2



· Manual activities for delivering of requested material from warehouse not only waste too much time of the warehouse personnel but also cause unfixable human mistakes. 2



· If there is no integrated systems in a factory tracking of the lots (batches) in the production line will not be possible. 6



· If you do not have an integrated information system you can neither analyze the cause of low quality products nor stopping producing low quality products. 4 6


· It is rarely possible to manage reservation in the warehouse without an information system. 2 6 7 8