I found it pretty interesting and took some notes:
What are the alternatives for an SME?
- Keeping all the data in Excel spreadsheets. However, it is not adapted for companies with too much complexity (number of products / customers / parts / suppliers / production sites…),
- Simple ERP programs such as Open ERP and many others,
- Complex ERP programs such as SAP or Oracle.
Is it easy to push users to switch from Excel to an ERP?
It is very hard. During the transition, top management needs to show a commitment to the ERP, and all managers need to have a look at the ERP’s reports every day.
A few tips from a speaker:
- Identify employees who are enthusiastic about the change and who are curious. Make they “key users” (see below).
- If necessary, fire the few who will always resist.
What to do before setting up an ERP?
The preparation usually takes about 6 months. Here are the steps:
- Select a project manager inside the company, who will work with a consultant and drive the implementation.
- Modify the internal procedures. Simplify the flow as much as possible. Think lean. Write down the new procedures and follow them.
- With an ERP consultant, decide where the ERP needs customization and where the company’s procedures cannot fit the ERP’s natural logic. It is important to minimize customization to save money but also to avoid headaches when a new version of the ERP comes out.
- Prepare the data. Beware of the data imported into the database. It is better to carefully cleanse the data (removing anything unnecessary, and correcting mistakes) before importing them into the ERP.
- Train a few key users (one in each department) who will prepare the data, train the other users, and do a lot of testing before the new system goes live.
Is everything set after the implementation?
The implementation never ends.
If a customer has a special requirement, some reconfiguration might have to be done. If capacity changes, some configuration is necessary. If customizations were done and the ERP needs an updgrade, some IT guys might get a headache.
Three mistakes to avoid
A lot of information will be in computers, but don’t forget about visual management. Put up charts so that everyone can see progress on key metrics. All employees might not use the ERP, but they can all understand simple graphs.
A “big bang” approach might be tempting, but it will consume all resources for a certain period, and Chinese managers are not very good at defining their needs exactly before the implementation. It is better to implement it slowly, one step at a time (with products, then sales, and so on), and to correct the course when necessary.
Chinese companies are required by law to submit accounting books in Chinese. And some regulations are a bit different (for example, how to value inventory). Don’t use an ERP that doesn’t output accounting books in Chinese!
Compatibility with lean manufacturing
The first two speakers came from companies far down the path to a lean enterprise. They said their ERP systems did not prevent them from conducting continuous improvement. One speaker mentioned that an ERP tends to push the company to think in terms of workflow rather than functions — a very good thing indeed.
They were actually more fervent users of technology that Toyota itself (the inspiration of the lean movement). Toyota factories typically have no computers on the shop floor. They do track what they buy and what they sell, but they don’t want to use the “material requirement planning” module of an ERP.
Debates about the need for one ERP system
All speakers mentioned the need for a common database for the data of all functions of the company. I should mention that not everybody agrees with this (see Michel Baudin’s take on this).
Similarly, all speakers mentioned the need for an ERP. Kevin Meyer, in Forget SAP, Run Down to Staples, makes a compelling argument against ERPs in manufacturing operations.
Any reactions to this?