Failed ERP implementation in manufacturing isn’t good news. Yet time and again, we hear of manufacturing ERP systems that have delivered no measurable benefits, or indeed, which have simply failed.And almost as bad are those manufacturing ERP implementations where despite much effort, there’s very little benefit delivered to the factory floor. The sales side of things works well; the finance function is happy—but on the factory floor, things get done despite the manufacturing ERP system, not because of it.
Yet it doesn’t have to be that way. Talk to manufacturers, consultants and ERP experts, and several common threads underlie the successful implementation of manufacturing ERP drivers that will deliver value to the factory floor, as well as to the sales and finance functions.
1. Industry ‘fit’ is important.
From a manufacturing ERP perspective, different industries have very different characteristics. Process manufacturers, for instance, need recipe management, multiple units of measure, and strong traceability capabilities. Project-based manufacturers need a strong project function, in order to tie costs and bills of material to specific contracts. Textile and footwear manufacturers need a style and sizing capability. And so on.
So it’s important to get the ‘fit’ right. And if you’re a process manufacturer, and the manufacturing ERP system you’re implementing has been designed around the needs of—say—batch assembly manufacturers, then you’re going to face some fairly obvious challenges.
What’s more, a number of ERP vendors these days offer ‘industry templates’, which come pre-configured with industry-leading best practice. Implementing your manufacturing ERP system around such templates delivers low-cost, low-risk implementations that are pre-wired for specific industries, built around known industry-specific best practices.
2. An experienced implementation partner is vital.
These days, it’s relatively rare for a manufacturing ERP system to be installed by the vendor. Instead, most (but not all) midmarket systems are sold and implemented through third-party implementation specialists.
So it’s vital to choose not only the right system, but also the right implementation partner. How strong is the proposed partner’s manufacturing experience? Have they worked in your industry? Do they have a strong and robust implementation methodology? And how experienced are the people on the ground who will actually be installing your system?
These are all sensible questions to ask. But frankly, there’s sometimes a better option on offer—having your manufacturing ERP system implemented by the company that actually developed the manufacturing ERP system in the first place.
That way, you’ll be gaining access to the widest possible pool of implementation experience, with the skill sets most appropriate for your particular circumstances. Plus, should there be a need for tweaks and modifications, these will be written by the company that wrote the original software.
3. Don’t forget the people side of things.
Yes, you’re implementing a manufacturing ERP system. And yes, it’s an IT system. But just as importantly, it’s a manufacturing ERP system that the people who use it are going to have to buy into. Otherwise, they’ll resist using it to the full—or even resist using it at all—leaving its sought-for benefits unattained.
So how to get that crucial ‘buy in’? Good change management is vital, along with all that this implies by way of user education and communication, proper planning and testing, and a responsiveness to users’ concerns and difficulties.
Adopting a proven implementation methodology will help. So will an investment in thorough Business Process Mapping: a lot of user adoption is driven by workflow, entry screens, and reports that meet—if not exceed—users’ needs and expectations.
But most importantly, strive for executive leadership and ownership that starts at the very top of the organisation. To a very real extent, how your manufacturing ERP system works defines how your business works. So show that the people at the top know—and care—about that.
Manufacturing ERP: the bottom line.
Obviously, selecting the right manufacturing ERP system in the first place is an important starting point. And yet, it’s not difficult to discover sensible guidance about how to do that.
Successful ERP implementation in the manufacturing industry is trickier, with fewer signposts for success. But follow the advice above, and we suspect that you won’t go far wrong.
If you have any questions about manufacturing ERP – please contact us and we'll be happy to help.