Visual South Insights

When is standard costing the best option?

The Visual South team works with hundreds of manufacturers with varying manufacturing modes. Many of our customers fall in the “to order” category. That means they are mostly make-to-order; and within that category they are either engineer-to-order, configure-to-order, assemble-to-order, project based, and mixed mode (they build some sub-assemblies to stock that can be used as a component part, finished good, or replacement part). The predominant costing method for “to order” companies is actual costing.

What is testing and why is it important?

Visual South has implemented countless companies on a new ERP. If we look through the lens of an ERP implementation—meaning a company is leaving a legacy system or systems, and migrating to a completely new ERP—testing is when we make sure we are comfortable with how everything has been set up. Testing in ERP implementation reduces the risk of discovering misalignment or problems AFTER go live. We want to unearth and solve as many problems as possible BEFORE go live. If testing reveals the ERP has been set up correctly, then it will be able to support the new procedures and processes once it is live.

Contents

• Introduction
• Chapter I – How to Run a Successful ERP Comparison
• Chapter II – 5 Characteristics of a Successful ERP Implementation
• Chapter III – 5 Characteristics of ERP Implementations Failures
• Chapter IV – Post ERP Implementation: How to Keep It Running Well
• Epilogue

Introduction

Buying ERP is a big deal. I know because I’ve done it. I was a Plant Manager in the mid-90s, and we were running production with a homegrown system that could not be modified because we didn’t have the source code. It was better than nothing, but not by much. We were not managing our capacity, our scheduling consisted of pushing product through the plant day in and day out. It was exhausting, and our on-time delivery range fluctuated from OK to bad. The results we got did not reflect the work we put into it.

There’s a method to ERP implementation plans and timelines

Creating an ERP implementation timeline can be a difficult process. There is no standard template that will magically fit all projects, as every one is unique. No two businesses, even in the exact same industrial segment, are alike. Each has a different scope, team, and availability. However, what’s typically the same for just about all small to medium-sized ERP implementations are the core phases and tasks to get from purchasing your new solution, to going live with it, and beyond. This blog will discuss Visual South’s methodology for an ERP implementation project plan.

ERP solutions don’t have everything

Evaluating Enterprise Resource Planning (ERP) systems is not an easy task. Naturally, your focus will probably be on finding a system that is a good match for your company. Much of the criteria used to judge the software will likely be based on what features and functions it has or doesn’t have. That’s reasonable, but limiting your evaluation to features and functions will not give you everything needed to make a great ERP decision for the company. To make a great decision, you also need to consider factors outside the ERP system.

What is a KPI?

A KPI (key performance indicator) is a measurement of value that can be quantitative or qualitative in nature. Manufacturing companies typically use and track KPIs to determine how a particular area of operations is performing. KPIs are ideally presented in dashboard format, giving decision makers the ability to quickly answer the questions like, “How are we are doing?” and “What is causing performance issues?” Think of KPIs as a company or department’s scoreboard for how the team is playing the game.

Manufacturers have made the move to cloud-based ERP systems

It seems like just yesterday that the concept of cloud-based ERP for the manufacturing industry was far-fetched. But today’s reality is manufacturers are choosing cloud deployment over on-premise deployment virtually every time. That is a paradigm shift for those of us who have been working with enterprise applications in the manufacturing sector.

A big decision

If your company is evaluating ERP solutions, you already know that choosing the right system is a big decision. The evaluation process is not straightforward, or something that companies do on a regular basis. Selecting a new ERP is typically a “once in a (business) lifetime” decision, because if you land on the right solution, your company will extract value from it for decades.

What is an Application Process Review?

What we do in an Application Process Review (APR) is pretty straightforward, and we perform several for our clients over the course of a typical year. In the review, we observe how the ERP processes have been built to manage the business. Then, we make recommendations to streamline and improve the processes and procedures related to the flow of data in the company. For example, how to use the ERP to alert procurement of projected material shortages, as opposed to having them look for shortages in a spreadsheet – usually after it was manually updated. In essence, an ERP application process review is a gut check on how things are working, and what can be done to make them better.

The most common reasons for ERP project failure may surprise you

That vast majority of ERP projects are successful. There are obstacles and challenges associated with any large project, but good teams always succeed. That means you understood the specific steps in the ERP project, built a strong ERP implementation team, and made sure business objectives drove the primary deliverables of the expected new and improved functionality.