Bad judgment and traceability…they go hand in hand!
People are emotional beings that are prone to make rash decisions that can have a potentially devastating impact on; their business, their personal lives and the businesses of others.
The most recent example of this is Stewart Parnell the chief executive at Peanut Corp. of America. Recent media reports link Mr. Parnell and his company to salmonella illnesses. The decision making Mr. Parnell went through is topic for another discussion, what I find interesting is the impact on his life and surrounding business partners.
I saw an interesting article that talks about how Mr. Parnell is isolating himself from family and friends as a way of insolating those around him from this growing media circus. There is no doubt that all the publicity and potential lawsuits will cause tremendous damage to Peanut Corp of America, and may even drive the company out of business. Yet, there are many more articles about his customers (like Kashi) that are now scrambling to recall products that may contain tainted peanuts.
This is a prime example of why companies in regulated environments need to be able to track the “lots” (or serialized items) that went into finished products. Those companies with good processes and automated systems (ERP) can manage and hopefully recover from this shock. Other companies that lack good processes or solid business system to access the lot information open themselves up to tremendous exposure that may drive them out of business. The worst part is these companies may have had no knowledge of the bad lots…but that doesn’t matter when the lawsuits arrive, or the Sherriff padlocks the front door.
Friday, February 13, 2009
Wednesday, February 11, 2009
Maintain traceability throughout the enterprise:
Maintain traceability throughout the enterprise:
When a large company implements an ERP system they typically have a dedicated internal team focused on making sure every component of the business system is customized, configured and integrated with all the unique business needs of the company. While this approach can deliver the expected result, this process requires extensive internal resources, significant external implementation consultants and includes a high risk of failure.
For most mid-sized companies this type of implementation is not an option…the costs would be too high, the implementation would take too long and the risk of failure could literally put a company out of business. Yet the cost of doing nothing or implementing multiple stand alone point solutions presents its own series of costs, challenges and risks.
One method mid-sized companies have selected is to use a hybrid of a broad and deep ERP with an open architecture for integration. Most mid-market ERP systems will offer a fully integrated solution to manage; Engineering, Sales, Operations, Materials, Shipping and Financials. Yet trying to be all things to all people is impossible…so as companies look to integrate all aspect of their organization in a common platform it is necessary to be able to integrate seamlessly.
Some of the more common examples of where companies may look to integrate with their ERP system include:
1) Design & Engineering - CAD (Computer Aided Design) PDM (Product Data Management) or PLM (Product Lifecycle Management)
2) Sales – CRM, Web store, Customer Portal or Forecast Management tools
3) Supply Chain Management- Supplier Management, Supplier Portal or Collaboration
If business functions are not addressed by the ERP system then a point solution needs to be added. These systems must be able to solve the specific business pain and interface with the ERP. Integration requires both; load/unload data, and transaction updates that will not corrupt the database.
The best options for mid-sized companies are solutions that are fully integrated from the ERP vendor. These are almost always the lowest cost solution, easiest to maintain and quickest to implement.
If functions are required that can only be addressed with 3rd party add-on applications then it must interface with the ERP. This option is more expensive (buying separate system), requires more maintenance (because the interface needs to be updated as the software is updated) and takes longer to implement (because of the additional complexity of creating specification, writing interface, and implementing).
The worst solution is a series of non-integrated systems. These are expensive (users are purchasing multiple applications, database, hardware, report writers, etc.), labor intensive to maintain (the same data is maintained in multiple locations & each system will have to be updated separately) and time consuming (with multiple point solutions a company will almost always be in the mode of upgrading, maintaining or trouble shooting problems). The worst part is the systems will eventually get out of sync and the data will be wrong in most of the systems.
When a large company implements an ERP system they typically have a dedicated internal team focused on making sure every component of the business system is customized, configured and integrated with all the unique business needs of the company. While this approach can deliver the expected result, this process requires extensive internal resources, significant external implementation consultants and includes a high risk of failure.
For most mid-sized companies this type of implementation is not an option…the costs would be too high, the implementation would take too long and the risk of failure could literally put a company out of business. Yet the cost of doing nothing or implementing multiple stand alone point solutions presents its own series of costs, challenges and risks.
One method mid-sized companies have selected is to use a hybrid of a broad and deep ERP with an open architecture for integration. Most mid-market ERP systems will offer a fully integrated solution to manage; Engineering, Sales, Operations, Materials, Shipping and Financials. Yet trying to be all things to all people is impossible…so as companies look to integrate all aspect of their organization in a common platform it is necessary to be able to integrate seamlessly.
Some of the more common examples of where companies may look to integrate with their ERP system include:
1) Design & Engineering - CAD (Computer Aided Design) PDM (Product Data Management) or PLM (Product Lifecycle Management)
2) Sales – CRM, Web store, Customer Portal or Forecast Management tools
3) Supply Chain Management- Supplier Management, Supplier Portal or Collaboration
If business functions are not addressed by the ERP system then a point solution needs to be added. These systems must be able to solve the specific business pain and interface with the ERP. Integration requires both; load/unload data, and transaction updates that will not corrupt the database.
The best options for mid-sized companies are solutions that are fully integrated from the ERP vendor. These are almost always the lowest cost solution, easiest to maintain and quickest to implement.
If functions are required that can only be addressed with 3rd party add-on applications then it must interface with the ERP. This option is more expensive (buying separate system), requires more maintenance (because the interface needs to be updated as the software is updated) and takes longer to implement (because of the additional complexity of creating specification, writing interface, and implementing).
The worst solution is a series of non-integrated systems. These are expensive (users are purchasing multiple applications, database, hardware, report writers, etc.), labor intensive to maintain (the same data is maintained in multiple locations & each system will have to be updated separately) and time consuming (with multiple point solutions a company will almost always be in the mode of upgrading, maintaining or trouble shooting problems). The worst part is the systems will eventually get out of sync and the data will be wrong in most of the systems.
Thursday, February 5, 2009
Improve the ROI on your ERP investment:
Improve the ROI on your ERP investment:
Most midsized manufacturing companies invest a significant amount of resources (sometimes blood, sweat & tears) implementing their core ERP system. Using limited resources to implement an ERP system makes sense because the return on investment (ROI) is quick and easy to measure (a successful ERP implementation will reduce inventory costs, improve efficiency and enhance customer satisfaction).
Yet after the core ERP system is up and running it can be difficult to find significant opportunities that will yield similar ROI. Two options companies can use to continue to improve efficiencies and reduce costs include implementing Expansion Modules to the core ERP system or implementing Business Activity Monitoring.
Expansion modules are add-on tools that work with the core ERP. An expansion module typically leverages the data in the ERP system, has a similar look and feel and is quick and easy to go live. For example, Quoting leverages the existing account master, part sales, etc. data that has already been entered. The user interface is similar so the learning curve is fast, and the tool should be fully functional so the go live is quick. Other expansion modules include; Engineering Change Control, Warranty Tracking, Subcontract Management, Lot/Serial Control, etc. Expansions modules have another huge advantage in a regulated environment because the data is collected and stored in a single location, making it easy to track manage the data as necessary which is vital for organizations that require a high degree of traceability.
Business Activity Monitoring (BAM) is a second area that delivers significant ROI with an existing ERP system. BAM (or Event Management) monitors a data base looking for certain database conditions…when that condition occurs, BAM automatically send an alert or message. BAM becomes an invisible assistant that can automatically perform repetitive tasks that are usually performed by administrative personnel (improving response time and reducing costs). BAM will warn in the event something requires immediate attention. BAM runs in the background and can check for hundreds or thousands of different conditions. When a condition happens BAM can send a message through email, pager, or text message. In addition to messaging, BAM can write data to another system when a condition exists.
There are many examples of how BAM can have a significant, immediate impact on Engineering, Finance, Sales, Purchasing, Inventory or Production. The key to a successful BAM deployment is a well defined condition to monitor, and a well defined event to trigger when that condition occurs. This could be: send an email to the sales manager when a customer is put on credit hold or send an email to the customer when their order ships. A more complex event could manage scrap in production, email the QA Manager, create a workflow request, and alert purchasing to buy more. BAM will have a significant and immediate impact on the business simply by leveraging the data in your ERP system.
Most midsized manufacturing companies invest a significant amount of resources (sometimes blood, sweat & tears) implementing their core ERP system. Using limited resources to implement an ERP system makes sense because the return on investment (ROI) is quick and easy to measure (a successful ERP implementation will reduce inventory costs, improve efficiency and enhance customer satisfaction).
Yet after the core ERP system is up and running it can be difficult to find significant opportunities that will yield similar ROI. Two options companies can use to continue to improve efficiencies and reduce costs include implementing Expansion Modules to the core ERP system or implementing Business Activity Monitoring.
Expansion modules are add-on tools that work with the core ERP. An expansion module typically leverages the data in the ERP system, has a similar look and feel and is quick and easy to go live. For example, Quoting leverages the existing account master, part sales, etc. data that has already been entered. The user interface is similar so the learning curve is fast, and the tool should be fully functional so the go live is quick. Other expansion modules include; Engineering Change Control, Warranty Tracking, Subcontract Management, Lot/Serial Control, etc. Expansions modules have another huge advantage in a regulated environment because the data is collected and stored in a single location, making it easy to track manage the data as necessary which is vital for organizations that require a high degree of traceability.
Business Activity Monitoring (BAM) is a second area that delivers significant ROI with an existing ERP system. BAM (or Event Management) monitors a data base looking for certain database conditions…when that condition occurs, BAM automatically send an alert or message. BAM becomes an invisible assistant that can automatically perform repetitive tasks that are usually performed by administrative personnel (improving response time and reducing costs). BAM will warn in the event something requires immediate attention. BAM runs in the background and can check for hundreds or thousands of different conditions. When a condition happens BAM can send a message through email, pager, or text message. In addition to messaging, BAM can write data to another system when a condition exists.
There are many examples of how BAM can have a significant, immediate impact on Engineering, Finance, Sales, Purchasing, Inventory or Production. The key to a successful BAM deployment is a well defined condition to monitor, and a well defined event to trigger when that condition occurs. This could be: send an email to the sales manager when a customer is put on credit hold or send an email to the customer when their order ships. A more complex event could manage scrap in production, email the QA Manager, create a workflow request, and alert purchasing to buy more. BAM will have a significant and immediate impact on the business simply by leveraging the data in your ERP system.
Tuesday, February 3, 2009
Traceability in an ERP system is more than transactions:
Traceability in an ERP system is more than transactions:
Most ERP systems are capable of capturing inventory transactions and associating a Lot or Serial number to the items being transacted. This allows a company to track a unique identifier for purchased items, manufactured parts, and customer shipments. When these Lot or Serial numbers are linked together it is possible to view the complete history of how a product was built, where a component was used, and what was sent to a customer.
The next evolution in business systems is to integrate workflow and document management into the transaction processing of the ERP system. By integrating workflow and document management a company is able to predefine the process for collecting and managing information. Workflow allows a company to predefine which fields are required at each stage of the process, and then automatically route that workflow request to the user(s) responsible for acting on that request.
The merging of transactions, workflow and document management results in a combination of traceability and accountability. In this scenario the data is captured and stored so it can be easily retrieved, and the individual(s) responsible for acting on that data are clearly defined and their actions are captured.
Examples of where this could apply include:
1) Receipt of a purchased item- upon the receipt of a purchased part the ERP system will transact the receipt, update inventory, lot/serial data and the voucher. Yet those purchased items may also require incoming inspection or test. Workflow and document management can capture; quality assurance, test or compliance data elements and route them to the appropriate people to action. Source or key documents related to that transaction can be linked to multiple attributes and then stored in a central secure location.
2) Scrap of an item during production- during shop floor transactions some items may fail and need to be scrapped. For items that are scrapped specific test or disposition information may need to be collected and stored so it can be analyzed later. After the data is collected on the scrapped item, a workflow request may need to be approved, or acknowledged.
3) Shipment to customer- after items are shipped to customers there may be a need to follow up and contact a customer and confirm the product was able to perform all of the required tasks. After a shipment transaction is performed a predefined workflow request can prompt a user to contact a specific company and collect specific data. And then based on the data collected that request can be automatically routed to another person for analysis.
As you can see the combination of an ERP system with a workflow and document management system has many significant benefits. This combination of functionality collects the raw data elements, organizes the internal workflow, and captures documents in a structured format. This combination is very powerful because it puts the power of information in a single location so a user can quickly see the source data elements, which did what during the process, and what supporting documentation exists.
Most ERP systems are capable of capturing inventory transactions and associating a Lot or Serial number to the items being transacted. This allows a company to track a unique identifier for purchased items, manufactured parts, and customer shipments. When these Lot or Serial numbers are linked together it is possible to view the complete history of how a product was built, where a component was used, and what was sent to a customer.
The next evolution in business systems is to integrate workflow and document management into the transaction processing of the ERP system. By integrating workflow and document management a company is able to predefine the process for collecting and managing information. Workflow allows a company to predefine which fields are required at each stage of the process, and then automatically route that workflow request to the user(s) responsible for acting on that request.
The merging of transactions, workflow and document management results in a combination of traceability and accountability. In this scenario the data is captured and stored so it can be easily retrieved, and the individual(s) responsible for acting on that data are clearly defined and their actions are captured.
Examples of where this could apply include:
1) Receipt of a purchased item- upon the receipt of a purchased part the ERP system will transact the receipt, update inventory, lot/serial data and the voucher. Yet those purchased items may also require incoming inspection or test. Workflow and document management can capture; quality assurance, test or compliance data elements and route them to the appropriate people to action. Source or key documents related to that transaction can be linked to multiple attributes and then stored in a central secure location.
2) Scrap of an item during production- during shop floor transactions some items may fail and need to be scrapped. For items that are scrapped specific test or disposition information may need to be collected and stored so it can be analyzed later. After the data is collected on the scrapped item, a workflow request may need to be approved, or acknowledged.
3) Shipment to customer- after items are shipped to customers there may be a need to follow up and contact a customer and confirm the product was able to perform all of the required tasks. After a shipment transaction is performed a predefined workflow request can prompt a user to contact a specific company and collect specific data. And then based on the data collected that request can be automatically routed to another person for analysis.
As you can see the combination of an ERP system with a workflow and document management system has many significant benefits. This combination of functionality collects the raw data elements, organizes the internal workflow, and captures documents in a structured format. This combination is very powerful because it puts the power of information in a single location so a user can quickly see the source data elements, which did what during the process, and what supporting documentation exists.
Subscribe to:
Posts (Atom)
