Often I hear the frustration companies have of the functional performance of their ERP system not quite meeting expectations. Quite often I find that clients do not realize the full functionality that is available in their ERP system. To start, we need to first understand the core  business requirements and processes as it is today, and how can we improve, utilizing existing ERP functionality. This is where optimizing comes in. When optimizing ERP, the focus is aligning the application with your business processes and business rules to accomplish world-class operations along with  leveraging existing ERP system functionality for optimization along with supporting  lean efforts to implement lean manufacturing and lean supply chain concepts and goals.

I have seen significant improvements take place in operations through ERP optimization and alignment with processes. I find that the most difficult part of an optimization initiative for most companies is their understanding of where to start, and what will have the most impact to the bottom line. Through a methodical approach, the starting point can be easily identified in a short period of time.

To get the initiative off the ground, leadership must be in full support, and driving the initiative. Next, identify a resource who will lead the optimization improvement initiative internally. This person ideally will be someone who is a good facilitator, and understands the business processes.

Optimization steps;

Step 1: DISCOVERY
Conduct in-depth interviews with all key users. Include in the interviews a ‘Top 5 issues’ list from each interview.

Review, document and chart current business end-to-end flow, from “order-to-cash”, identify transactional points, list all issues including the constraints. This could take a few meetings to iron out the initial flow chart, however, consider this document a living document which will be continually adjusted though time.

Review business processes in relationship to software and best business practices.

Document the ERP system functionality which is used, and not used.

Review the level of basic ERP knowledge in all key areas.

Prepare detailed value maps of all key business processes.

Assess system parameters and the ability to meet business and departmental goals.

Brainstorm policies, procedures, and business rules to support “today’s” business needs, as well as tomorrow’s anticipated growth.

Assess ERP educational requirements, training / re-refreshers courses.

Identify the functionality of new releases and develop a cost/benefit analysis.

Identify areas which are ripe for optimization. Develop the optimization plan. This plan, understand, is not a re-implementation of your ERP system. It is a comprehensive review and detailed study of all the features, functions and the alignment of your business systems to your current and future business processes.

Identify quick wins / identify longer term initiatives.

Identify opportunities for the following;
- Eliminate transactions where possible
- Automate as much as possible
- Standardize the balance
- Identify risks with mitigation plan

Document results, review with Executive Management, and prioritize tasks.

Step 2: PRIORITIZE
Prioritizing and scheduling enhancements / improvements, are crucial in maximizing the benefits of your ERP system

A standard template is needed to assess and prioritize enhancements, improvements.

Quantify business benefits and costs.
Enhancements that are easy to implement should be fast-tracked.
New enhancement requests should be assessed against the entire queue.
Plan to implement as quickly as possible
Demonstrate and communicate wins as quickly as possible.

Step 3: TEST THE SOLUTION
Proof of concept.
Obtain approval from management to proceed to step 4.
Documentation (validation, work instructions, procedures, Mgmt. signoffs, etc.)

Step 4: IMPLEMENT SOLUTION
Training
Update documentation

Step 5: MONITOR SOLUTION
Monitor solution and identify the next topic of improvement and start the process over.

There must be a drive with full support from top management on down to align lean business processes to the functionality of your ERP system.

Time and effort is required for developing the optimization team, writing scope statements, educating the organization, and developing a plan that allows a company to work on very precise projects.

The optimization process must also focus on dramatic improvements, concentrating on issues that will provide the largest return for the company. Those leaders that select to optimize their ERP system and place the information flow into perfect alignment with lean principles and practices will best position themselves and their companies for ultimate success. Companies that recognize the value of their ERP systems must be willing to make the investments of time and money required to transform their ERP system into a strategic tool that aligns the applications and business processes seamlessly. The ERP system is not a magic tool which will transform everything overnight. Successful organizations have developed optimization efforts that over time allow them to become more agile and responsive to customers needs.

Companies also have to be willing to move toward new business and organizational models that will allow them to take true advantage of architectural and business changes required through the ERP application. In the end, people and applications throughout the value chain will become more flexible and agile and ready to respond to market conditions, supply chain conditions, economical changes that come their way.

Develop the business goals and objectives for the ERP system and then put together a plan that will accomplish both your short- and long-term strategic and tactical goals.

I have consulted many companies on ERP and supply chain alignment and optimization, each having it’s own challenges to work out, but all resulting in positive gains for operations and most importantly the knowledge gained to move forward to continue improvements for operations.

For more information on how to optimize your ERP system and the supply chain, contact;

John Paulson, Supply Chain Consultant, Process and Systems Improvement Specialist

Cell: 503-819-0190

Email: paulsonj@aol.com

www.john-paulson.com

The reality is, there is no step-by-step ERP project management methodology that will ensure success of an ERP implementation. Each project is different, requirements are different, scope is different, organizational cultures are different, different players, different challenges, and the list goes on.  It  is certainly an art, as it is a science, to managing ERP implementations. Some implementations make it through the finish line with minimal and very manageable problems. Others, not so well, and some considered a train wreck.

Unfortunately, some choose to ignore the symptoms and hope they go away. I have yet to see the symptoms of a failing project go away on their own.

Depending on the severity of the problems, or stage of failure, a failed ERP implementations can be turned around. In many cases, this turn around must be done in a rapid approach with an immediate back-up plan solution developed and executed in conjunction to keep operations moving.

Sounds painful right?  Yes, it certainly can be. Your operations is in the ‘critical care unit’ at this point.

The scenario;

Go Live has taken place, further frustration sets in throughout the organization. The complaints are coming in, the issues are compounding by the day, by the hour,  product shipments are not able to make it out the door, and people are going back to manual systems and reporting.

Sounds like an operational nightmare, right?   It happens.

Sure, one can list many reasons why this happened. The purpose of this article is not go into details of typical reasons ERP implementations fail, but to focus on what needs to happen moving forward to fix a broken implementation.

Interestingly, this particular scenario doesn’t necessarily have to take place at Go Live. I’ve seen it take place over the course of a few years due to no control of software configuration and customization management. However, the solution is the same, once controls are in place.

What next?

Accept things did not work out as planned. Yes, the project is probably over budget at this point, and needs to be re-examined for moving forward.. There is no time, or value, in finger pointing. The team worked very hard to this point. Leadership needs to assess the problems, the project, project management and style, and people, and be decisive based on facts and data. Don’t be quick to blame the software, or implementation services vendor. While they may be contributing factors, problems can very well be within the organization. At this point, it is highly recommended to bring in the assistance of an outside ERP expert to bring in a different perspective, looking from the outside in, even if it is just for a one to three day ‘rapid assessment’ (depending on scope). This person will provide direction moving forward, and to identify, and cut down any political bias that may hinder the efforts, whether it be within the organization, third party consulting implementation services, or software vendor. Ideally, this person should have been brought in prior to Go Live.

Leadership will initiate a task force development and drive the improvement initiative forward sending a clear message of need, expectations, and support from leadership

Identify the task force -  This could be the same team members and project manager as the implementation team, or adjustments to the team if required.

Identify the issues -Identify all issues, assign responsibilities, prioritize issues based on critical business processes, critical business needs. Issues will be managed on-line, one central database,  updated as real-time as possible.  The team will have access to the ‘on-line issues list, to make updates, view status and print if necessary for the standup meetings. An immediate survey may be needed to distribute to the departments, along with tight communications with the  departments. Constant communication face to face will be critical for immediate direction and feedback.  Daily standup meetings will be required, morning and afternoons for issues updates, keeping the meeting on topic, reviewing all action items, resource needs, and proposed solutions. If a ‘Help Desk’ support function is not in place, get it in place fast! This will be the central point for the organization to communicate system issues.

Project Management - Good project management practices and strong team facilitation skill is required during the recovery. At this point, it’s all about achieving recovery results efficiently and effectively as it relates to critical business processes first. Some project managers feel they need to make all the decisions. During this critical time of project recovery, this attitude can slow progress, and bring it to a halt. The project manager will delegate the decision making to the team. The team is granted greater power to make decisions, and move forward updating the team and management with their tasks and progress at the standup meetings. A project manager at this point will become more of a facilitator, and supporter for the team, doing whatever necessary to enable the team to accomplish the objectives, and act as as a communicator for the entire project.

Identify the problems – A two phased approach; Identify the quick fixes, and identify the long term solutions, improvements. With quick fixes, make sure to fully understand the root cause, the impact, the risk and the down stream effect of the fix. Make sure you have complete buy-in from from process owners. Again, this is where an end-to-end process flow chart will be necessary to reference the problems, the critical processes, and where is fits into the overall supply chain to validate the priority. The full history of the problem, solution, other data, will be referenced in the ‘Issues List’.

Develop the solution - The team will plan the solution, develop the risk analysis, and develop the cost analysis if necessary. Once a potential solution has been identified to test, a  review and approval will be required to move forward with solution test. It is possible, depending on the complexity of the problem, the solution approval process could be limited to the process owner at this stage.

Test the solution - Test solution in a unit test, followed up with an integrated test. Upon passing with predicted results, proceed with appropriate approval process to implement.

Monitor the process – Monitor for continued improvements.

Conclusion

The approach described in this article is a high level road map approach that will help steer you in the right direction for project recovery, though there is more that may need to be considered depending on the scope of the problems. I did not go into the detail of tools and techniques used, but it is certainly enough information to move forward with. It really comes down to taking the appropriate immediate steps to get the ERP initiative and business repaired in a tightly communicative, collaborative, and expedient manner.

Seeking the guidance of an expert, looking from the outside in, is recommended in failed scenarios of this nature. It is highly recommended to bring this person on board prior to Go Live, to assess  the capability of going live and identify risks before you flip the switch. It is critical to discuss and understand what ‘Day 1′ of Go Live will look like, for all functions, prior to flipping the switch, and how well prepared the organization is with going live.

For more information regarding ERP implementation management, contact;

John Paulson, Supply Chain and ERP Consultant,

Cell: 503-819-0190

Email: paulsonj@aol.com

www.john-paulson.com;

Like many companies, there is probably no time or resources available to attack the problems, and no idea how to attack the problems, just ‘get the product out the door!’

I’ve seen it over and over throughout my background in operations management, and as a consultant.

Rocket Science?

Supply chain improvement initiatives can be a big challenge to some companies; Identifying the problems, resource availability to attack the problems, organizational buy-in to solutions, defining metrics, identifying the critical constraints, identifying the solutions, understanding the tools available, and how to use the tools to assist in problem solving, the challenges in change management, and more. Yes, the challenges can be substantial in supply chain improvement initiatives. There is an approach and an accelerated improvement methodology to manage these challenges, along with valuable learning within the methodology process that provides for both business growth and personal growth.

The answer; No, it’s not rocket science. However, there are simple, and very effective tools to learn, and they can be learned during the project. Depending on the need, the tools could consist of concepts from Total Quality Management, Deming’s PDCA (PDSA), Six Sigma tools, DMAIC, Lean tools, Kaizen, SPC tools and others. It’s an easy to understand improvement methodology, utilizing the tools on an ‘as needed’ basis, will move your improvement initiative forward, and your company forward as a continual learning organization, and continual improvement organization.

The problem solving strategies developed over the past decades have shaped the current problem solving methods of today. Collectively, these tools are proven, and powerful for an organization to grow from.

1) Leadership Takes the First Step

First, leadership takes the step to address the areas that need improvement at a high level, and drive the supply chain improvement initiative message to the organization, along with freeing up resources to move the initiative forward. Leadership identifies the supply chain improvement Steering Committee to take the lead.

2) Understand the Supply Chain ‘End-to-End’ Flow

I find many companies have yet to understand their supply chain process, flow, and strategy. As I had blogged previously regarding the importance of process mapping for organizations, this is a must for the beginning of a supply chain improvements initiative. This is the basis of the existing processes, and identifying critical points of constraint, bottlenecks, and identification of primary and secondary areas for for improvement.

3) Identify and Define the Problems

Supply chain issues can show up in a variety of places; Key performance indicators, customer feed-back survey, ‘Top 5 Pain Points’ survey from departments, market analysis, bench marking analysis, profit and loss analysis, and more. The Steering  Committee identifies the processes to improve based on business objectives. There are tools that can be used during this particular stage to identify and validate the critical processes to focus on.

4) Plan the Project

The Steering Committee identifies what to accomplish in the improvement of the process. This could be as simple as stating ‘Improving on-time shipments from 66% to 95%’ for example. Identify the process owner, and team. Develop the project charter to include; purpose of the document, project background (problem definition, analysis, etc.) , project objective,goals, approach, scope, assumptions, cost, project team resource requirements, roles, responsibilities, project governance, time-line, etc.

5) Analysis

At this stage, the project team takes over to study the process flow, baseline data collection, identify the internal/external customers, understand the requirements, develop a gap analysis,  identify root cause to the problem.  Develop the problem statement worksheet.

6) Develop Solution

The team will plan the solution, develop the risk analysis, and develop the cost/benefit analysis. The solution may include identifying ‘best practices’, and a benchmark study. Once a potential solution has been identified to test, a Steering Committee review and approval will be required to move forward with solution test. It is possible, depending on the complexity of the project, the solution approval process could be limited to the process owner at this stage. What is very important to remember at this stage, the teams are looking for a solution for improvement, not a solution for perfection. Looking for perfection can easily result in no result, with much time spent, and much frustration. Teams often fall into the analysis paralysis of trying to identify the perfect solution. Often, this is due to fear of potential failure of the solution,  or of the initiative. Teams need to understand the intent of the process is to learn from, with the goal to improve.  Improvement in incremental steps is a good thing.

7) Test the Solution, and Learn

It is more important for the organization to understand the entire process is a learning process, as is with the testing stage. The testing stage is a learning process first and foremost. If the solution does not pass with the predicted results, that is OK, the team most likely learned something very valuable. It is human nature to become very frustrated if a test does not result with what was predicted. Our culture looks at failure as a negative. Failure in most cases is a primary ingredient to success. Again, the approach to the improvement process is a learning approach, with the goal to improve. If the test failed, the team will cycle back to the solution stage. This cycle may happen several times which is OK, expect it, and learn from it. Once the test passed with predicted results, a ‘proof of concept’ demonstration may be a next step for the Steering Committee approval, or at minimum, process owner approval.

8 Measure the Solution

Once the test past predicted results, measure the results, confirm benefits meet the  defined success criteria, document analysis,  obtain approval from process owner and Steering Committee to implement.

9) Implement the Solution

Adopt the solution; train people of the process, update standard operating  procedures, update process flow chart, plan cut-over from old process to new process, communicate change. Depending on the complexity of the change, the cut-over process and plan could be a project in itself to manage.

10) Monitor the Process

Monitor the process for continual improvement opportunities.

Conclusion

As stated in the beginning; like many companies, you may say there is  no time or resources available to attack the problems, and no idea how to attack the problems. In business, there is only one choice, change faster and more effectively then your competition, or you may find your company out of the game.

The concept I have introduced; an accelerated process improvement methodology, will move your process improvement initiatives forward, and your organization forward. A methodology, unique from traditional process improvement consulting services, that focuses on organizational learning in a ‘as-required’ approach, while improving processes and the supply chain on a continual basis.

Bringing in an outside expert on supply chain process improvement consulting, who has solid experience in your industry, who has a solid understanding of problem solving methodology and tools used, change management, and has strong facilitator skills may be a wise choice for companies who need assistance with the initiatives. Bringing in a second pair of  ‘supply chain experienced eyes’, looking from the outside in, can be very beneficial in some cases. This consultants role is not to necessarily to solve the problems. Most importantly, this consultants role is to transfer knowledge on ‘best practices’, how to identify and solve the root  problems in supply chain, training on process improvement methodology, training on problem solving tools used, and providing insight from experience. A good consultant will streamline the consulting  and training approach, to train on the tools used, as the tools are needed. A concept to ‘training on the project’, which I find to be very cost effective for organizations.

For more information on the process improvement methodology, tools, and guidance, contact:

John Paulson, Supply Chain Consultant, Process and Systems Improvement Specialist

Cell: 503-819-0190

Email: paulsonj@aol.com

www.john-paulson.com

I have seen the good, the bad, and the ugly with ERP implementations. I would estimate 30% of my consulting projects I have been brought in to clean up the mess of poorly managed or implemented ERP projects, or provide project assessments of problem projects. In many cases these are projects of well known ERP consulting implementation service providers.  Over the years I have found many companies rely on their ERP implementation service provider to run the ERP show and the management of the project. This often came with problems..  and serious problems to say the least.

For a company who is planning an ERP initiative, it is essential, if not critical, to become ERP savvy, to take ownership of the ERP initiative, lead the ERP project, to know the project warning signs when you see them and know what corrective action to take. Leading the ERP initiative, owning the project management of the implementation and working in collaboration with your ERP implementation service provider, leveraging their systems expertise, their resources and experience is important and essential for the success of your organizations ERP initiative.

So, how does a company become ERP savvy?

Becoming ERP savvy comes with much experience. The best approach is to bring someone on board with solid ERP experience from business requirements development to software selection, to implementation, to post implementation support, to upgrade planning. Whether this is a full time position, or contract position, this is certainly a critcal step to ensure ERP success.

What should a company look for in a ERP specialist?

An ideal profile will include;

• Experience with software selection
• Experience with software and services negotiations
• Experience managing third party implementation service vendors
• Solid ERP project management of multiple projects
• Managed functional and technical teams
• Understands change management
• Ideally someone with specific ERP system knowledge of the system being implemented, though, not necessary.
• Ideally someone with specific industry experience would be prefered.  Some industries are highly regulated which may need to be considered for ERP initiatives and the process.

Bringing in an experienced ERP specialist, well before the software selection, who is on your side of the fence, I believe is a critical step for any ERP initiative  to ensure success of the project.

______________________________

Schedule a speaking engagement with John Paulson on the topic:

‘ERP: The Good, The Bad and The Ugly’

This topic covers the top 10 reasons for ERP project failure, and how to avoid failure. Experiences, insights, and tips on successful ERP project management.

Great for any ‘ERP Kick-off’!

John Paulson, Supply Chain and ERP Consultant, Process and Systems Improvement Specialist

Cell: 503-819-0190

Email: paulsonj@aol.com

www.john-paulson.com

In business, being ‘process focused’ is the most effective way to manage an organization at any level and eventually support its overall goals. By improving processes, a business or organization can improve internal communications, efficiencies, effectiveness, adaptability and customer service. Keeping processes flexible is a key attribute to being able to adapt to a changing economy, customer needs, and business needs.

What is the Purpose?

The purpose of process mapping is for better understanding and identifying potential areas for improvement, identifying your constraints and bottlenecks in the flow. It involves the gathering and organizing of facts about the work, the flow, inputs, and activities, decision point, outputs, referencing specific work instructions and operating procedures, and displaying the process maps so that they can be questioned and improved upon by knowledgeable people. Process maps aid in understanding by abstracting, using visual charting symbols consistently and masking unnecessary details.

 What are the Benefits?

Process mapping improves our understanding of processes along with our understanding of business and operational performance. Some of the benefits of a well-prepared process map are as follows:

• Clarity of department or enterprise wide project impact to processes
• Identify bottlenecks in the supply chain, and moving forward with prioritizing the solution development to the constraints.
• Employees can participate in constructing a process map giving employees an opportunity to experience a shared view.
• The methodology of process mapping is the catalyst to give businesses and organizations access to more diversity, creativity and innovation.
  • Some of the best solutions to business problems come from within the organization.
  • Reveals the complexity of the actual process.
  • Reveals the issues and gaps that cause business and operational problems.

People may be more willing to participate in a change initiative and pitch in with new ideas when they are directly involved. This helps to increase the probability of success and encourages a higher level of involvement and agreement.

• Process maps can save you time and simplify your projects because they can:
  • Build, influence and accelerate the “Opportunity Improvements” and “Design” phases of a project.
  • Effectively communicate ideas, information and data visually.
  • Aid in solving problems and making decisions.
  • Identify actual or ideal paths and can reveal problems and potential solutions.
  • Identify process constraints and bottlenecks to focus improvements on.
  • Be produced quickly and economically by a skilled individual.
  • Show processes broken down into steps using symbols that are easy to follow and understand.
  • Show intricate connections and sequences easily, allowing for immediate location of any element of a process.
  • Show an entire business process from beginning to end and can be used to understand the current-state and to design and depict the future-state process.

Process maps help you to understand the important characteristics of a process, allowing you to generate useful analytical data in order to derive findings, draw conclusions and formulate recommendations. Furthermore, process maps allow you to systematically ask many important probing questions that lead to developing a view on business process improvement.

A well constructed process map is a powerful tool that can contribute towards key business, strategic and operational benefits such as:

• Reduced operating costs
• Increased quality
• Increased productivity
• Improved lead-times
• Improved flexibility in operations / supply chain
• Improved customer service
• Work simplification
• Helps in prioritizing improvements based on the level of constraint identified to the flow
• Lower learning curve of cross training or new employee training
• Increased visibility for areas for improvement identification

In addition, process maps can help:

• Identify the root cause of sub-standard process performance
• Provide process details in the analysis phase of Six Sigma projects
• Prepare your organization for ISO programs
• Establish a baseline in order to validate improvement and justify change or capital expenditures
• Promote a process-centric attitude within your organization
• Protect your organization against the risk of losing knowledge capital by capturing and documenting critical current-state processes
• Prepare your organization to make the transition into system requirements analysis because they describe how functions would interact with a system to complete an activity step
• Reduce the risk of scope creep of projects
• Assign notes to each process identifying; tasks, work instructions related, Operating procedures, etc.
• Reduce the risk of unidentified business requirements of a project

Applications for Business Process Mapping Include;

• Business Process Improvement, Redesign and Reengineering Initiatives
• Organizational Process Training
• Supply Chain Constraint Identification
• Quality; Six Sigma, Value Streaming Mapping, ISO
• Simulations / Models
• Information Technology; IT projects, Systems Integrations, ERP, Disaster Recovery, Business Continuity
• Work Measurement
• Document, Review, and Analyze Current State Processes
• Design Future State Business and Operational Processes
• Integration of Processes for New Services, Operation Start-ups

Conclusion;

Every time you improve your organizations business processes, you generate crucial benefits for your business in the form of cost savings, efficiency gains, and greater customer satisfaction, loyalty and profitability. Even small improvements to a relatively simple process can pay big dividends to for an organization.

For more information on process mapping and value stream management for your organization, contact John Paulson at; jpaulson@columbiatci.com  
]]> http://columbiatechconsulting.wordpress.com/2010/09/02/process-flow-mapping-%e2%80%98a-picture-is-worth-a-thousand-words%e2%80%99/feed/ 0 John Paulson http://columbiatechconsulting.wordpress.com/2010/02/20/a-success-story-supply-chain-collaboration/ http://columbiatechconsulting.wordpress.com/2010/02/20/a-success-story-supply-chain-collaboration/#comments Sat, 20 Feb 2010 00:02:50 +0000 johnpaulson1 http://columbiatechconsulting.wordpress.com/?p=66 ]]> We hear much about the importance of collaboration in the supply chain, and the difficulties associated. Let’s first define the word ‘collaboration’ in business; ‘a process in participation through which people, groups, organizations, work together to achieve desired results’.

While at one of Panasonic’s manufacturing divisions in North America, I was handed the opportunity to improve supply chain performance for their customer service operation. This particular division was reported to be ranked second from the bottom of over 100 divisions worldwide in customer service performance for parts support, with a 28% ‘on time’ delivery performance. With orders past due in excess of two years, we had some unhappy customers, unhappy distributors, and an unhappy corporate office in Japan

After an initial assessment of the customer services operation,  the process flow, existing systems, internal and external customers, requirements and gap analysis, we identified critical resources and functions within operations and the supply chain. We urgently needed their assistance in the turn-around efforts initiative. We developed processes and  procedures with a streamline focus, identified information system requirements, identified critical suppliers, distributors, customers, and set up a formal materials management and sales and operations planning process along with ERP system integration from a manual planning system.

Next, we improved communications, responsiveness, reliability, and visibility with customers, distributors, and international suppliers including setting up a weekly teleconference on progress to plan, status of orders, and the sharing of planning data.  Much improvement with this came from improving our utilization of our existing ERP system functionality to take the existing manual processes onto the ERP system to improve information flow, supply chain / materials planning, data accuracy, and tighter communications throughout the supply chain.

Next, we had the challenge of breaking down the silo walls of a manufacturing organization, to open up the walls for cross functional collaboration. To build a collaborative cross functional integration with people who have been managing their departments independently, focused only on their specific department performance for many years.  This was our challenge, and this challenge of collaboration was our main ingredient to the success of improving the customer services operations and supply chain performance in an expedient manner.

Collaborative inter-departmental integration involves typically informal processes based on trust, mutual respect, the sharing and alignment of cross functional goals, information sharing, the joint ownership of decisions, and collective responsibility for outcomes. We did find that providing a box of donuts during our meetings certainly helped attendance with some key critical people.. In short, collaborative integration is how well departments work together. Thus, collaboration between departments is often needed to ensure delivery of high quality services to customers, and involves the ability to work seamlessly across the “silos that have characterized organizational structures”. Collaborative behavior is based on cooperation, a willingness, rather than on compliance (a requirement). Its success is contingent upon the ability of individuals from interdependent departments to build meaningful relationships. The fundamental challenge for managers focusing on improving customer service in the supply chain is to gain a better understanding of the components to success of cross-functional collaboration. Working with your manufacturing manager, your suppliers, logistics personnel, warehouse personnel, planning, distributors, customers, in a collaborative effort, sharing a common goal and the successes,  and to make certain of recognition and ‘reward’ where credit is due will provide for success to your collaboration efforts in supply chain and alignment of business strategy.

As more firms have discovered the significant opportunities for improvement in managing the flow of product to the customer in better, more efficient ways, much attention has been focused on the measurement of distribution service performance. For example, the ability to meet quoted or anticipated delivery dates and quantities on a consistent basis, the ability to respond to the needs and wants of key customers, and the ability to notify customers in advance of delivery delays or product shortages are identified as key distribution service performance areas. Many successful firms are focusing on distribution competency to build relationships with key customers by customizing their basic service offering until it is “just different enough to fit exactly what the customer needs”. The proliferation of quick response systems (QRS),efficient consumer response (ECR) initiatives, and just-in-time (JIT) supply programs are tangible examples of how a distribution service can offer customers added value. These programs tend to position a distribution service as the core capability that achieves customer satisfaction through inventory availability, timely delivery, lower product failure rates, and thus fewer lost sales or returns/complaints. Successful distribution service performance is often dependent on the level of collaboration that exists between the firm’s marketing and logistics functions. The absence of cross-functional collaboration may result in promises made by the firm’s sales force that have not been coordinated with logistics, promotions that are not synchronized with delivery schedules, and failure to deliver product in a specific, requested format because it is not the most efficient way to do so. Without cross-functional collaboration, firms cannot be expected to respond optimally to customers’ requirements. It is, therefore, expected that effective inter-departmental relations–the product of cross-functional collaboration– will be positively associated with distribution service performance.

In summary, the positive results we experienced at the Panasonic manufacturer supports that cross-functional collaboration and effective inter-departmental relations are positively associated with supply chain service performance. A collaborative effort with IT, manufacturing, warehouse, planning, logistics, procurement, suppliers, distributors, they all had a powerful contribution to the success we experienced. They came together to assist customer service operations improvement, a shared common goal which resulted in bringing ‘on time’ customer deliveries up from 33% to 95% in 4 months and receiving a letter of commendation for the resulting improvements from the ivory tower.

Today’s competitive business environment is largely dependent on the degree to which firms are able to integrate across traditional functional boundaries to provide better customer service. Sure we had difficulties with our supply chain collaboration initiative, we certainly had our challenges to work through. Taking steps to improve the supply chain collaboration in increments may be the best approach for some to ensure success, and most importantly, it’s a process of continual improvement. It takes someone who can bring the functions together, the people together, gain buy-in, working collectively..and maybe a box of donuts for that initial meeting.   ; )

1. Stop thinking about it, and start doing it!’ ..and you don’t need a team of consultants to make it happen. Chances are, in this current economy, your operations are not running at full capacity giving your organization the opportunity to place resources on your lean improvement initiative. Now may be the best time. 

2. Understand your current business processes, chart it out, communicate it to the entire team. Let the team pick it apart. Expect many revisions and adjustments until you get the final result. You’ll be surprised how valuable this chart will be. 

3. Choose one element of the process to incorporate lean, this could be focusing on a major constraint in the supply chain such as materials. One important lean element is to eliminate ”push” production for a “pull” system. In other words, you should strive never to produce finished goods to fill a forecast or warehouse minimum/ maximum, but only to fill customer orders (the ideal situation). When you base all of your production on the pull of a customer order, you eliminate waste, excess inventory and many other issues. Start eliminating the waste associated with work order management by utilizing back-flush concepts.

Or within manufacturing for instance, you can incorporate lean to  a production line. Start at the beginning and follow a piece or pieces through the process, and time it, recording the time taken by every step, and the times in between where parts or completed products sit idle, as work in process or finished-goods inventory. Be sure to record any times where your people or machines are idle, waiting for work to cycle to their step in the process. At the end of this exercise, you will likely end up with some surprises when you measure the time where value is added to your product or process against idle time, or time spent in activities such as materials handling or inventory buildup.    

4. List ALL ideas; Soon, after working this exercise a few times, you or your manufacturing team will quickly generate ideas about how to improve the flow and efficiency of your operations. This will help others in the team to expand on ideas from others, and generate creative ideas. 

5. Once your team understands the current state, begin to map out an ideal “future state” of the specific process. The team can identify and eliminate the wasteful steps in the process. This future state gives the team a goal to work towards. 

6. Once the team mapped out the future state, you can begin scheduling improvement events to begin reducing waste in the process. Once the specific improvement initiative is completed, monitor, and move on to the next improvement initiative and begin the cycle again. It’s a never ending process. 

Small successes to start are important. Begin the ‘hit list’ with attacking the low hanging fruit first. For instance, spend a week on finished goods inventory, and trim down the waste there. Later, spend a week reducing work-in-process inventory, then a week improving the flow in your process by moving machines or processes around. As you work through these events, you will slowly make progress toward your ideal future state. 

Also note; Lean is not just for manufacturing operations. Lean can be incorporated throughout the organization, but always keep a focus on the benefits to the full supply chain. And remember, your people are an important asset in the lean initiative.

Do you feel you are not quite getting full system functionality required out of your ERP system?

Looking for more understanding of your ERP system and its capabilities?

Looking to incorporate lean concepts to operations, but not sure how with your ERP system?

With economic cutbacks taking place these days, manufacturers running under full capacity, companies are taking a step back to look for ways to improve their operations, streamline processes, implement lean concepts, review and align with best practices. Companies are looking for opportunities that are offered with their existing ERP systems capabilities for their operation improvement initiatives.

Your ERP system has become the information system and backbone of your organization. Use this time to review your ERP system for system optimization opportunities, align existing system capabilities with business requirements and processes which may have changed over time, or to assess system capabilities for lean concepts to operations. In short, now is the time to identify improvement opportunities and implement for continued ROI of your ERP system and improvement to operations.

At Columbia Technical Consulting, we work with companies nationally assisting them with optimizing their existing ERP system perfomance for continued ROI, along with system and process alignment, and system upgrades