Where To Start ERP Continuous Improvement?

ERPs are designed to eliminate waste and cut unnecessary cost. In my experience business rarely utilise full potential of an ERP. This is mainly because, after the implementation, ERP it is left alone.

ERP has a key role to play in business improvement. Therefore, continuously improve use of ERP in your business.

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As a starting point consider following areas for continuous improvement:

  1. Improve Data Quality – Assign data owners within your business. For example, allocate responsibility to certain employees to ensure that Price lists, Stock, Customer, Supplier data is valid and up to date at all times.
  2. Use power of reports and analytics – If you have good data you can have meaningful reports and take powerful decision. For example:
    • Choose best suppliers – Based on reliability and quality of delivery, rather than price.
    • Negotiate with Supplier – Based on history of orders with the supplier negotiate better prices/rebates.
    • Choose best Sales executive – Based on expected/actual profitability of his/her sale, rather than revenue.
    • Improve Sales forecasting – So that, you can proactively procure raw material, replenish stock.
  3. Make informed decisions to fire bad customers – Identify cost and special requirements (packaging and other overheads) of delivery, returns and quality expectations of your customers. Analyse profitability of your customers.
  4. Automate and simplify Purchase Order and Supplier Invoice approvals – Consider using templates for ordering routine stuff (like stationary), Punchout catalogues, EDI and other electronic communication with the suppliers.
  5. Implement new features and modules – During initial implementation there are always few features and modules that are not implemented. Consider implementing value add features and modules. For example, Advanced Planning and Scheduling, Customer Portal, Trial Kitting, Dunning Letters etc.
  6. Reduce unnecessary data entry in ERP – Remove/Hide any fields that are not required. So, end-users do not waste time entering garbage information.
  7. Improve User-Interface – Simplify data entry screens (hide/rearrange fields, tabs, menus etc.)
  8. Improve User-Experience – Set up personalised role based landing pages. It make navigation much easier. It helps end-users, as information and modules they access on daily bases is readily available on the landing page. Consider use on hot-keys, teach personalisation features to the end-users.
  9. Empower End-User – Teach writing basic reports, saved searches, data import and extraction from ERP.
  10. Improve Work In Progress (WIP) – WIP is one of the main reasons for inefficiency. Try to reduce WIP by improving visibility of existing work, utilisation of labour and machines. Give right level of authority to Production manager/Services Manager to say ‘No’ to additional orders. Therefore, setting right expectations with Sales and customers. Improve ability for Sales staff to predict delivery of new orders based on existing workload in Production area.
  11. Standardisation – Standardised production helps reducing set-up time, number of batches etc. Standardised services reduce waste and mitigate risk of unknowns.
  12. Consignment Stock – Identify items that will best serve you as a consignment stock. Negotiate consignment stock arrangement with your supplier.
  13. Inventory: ERP helps to reduce stock in your warehouse and still meet your manufacturing and/or retail needs. ERP helps you to plan manufacturing needs. So, your manufactured items do not collect dust because of overproduction. Your Work in Progress (WIP) decreases. You make more informed decisions on purchasing raw material. As you have analytics available in ERP, you choose reliable suppliers and order raw material well in time, knowing their average lead times.

I hope you find this useful!

Drop me a comment, if you like to share your experience.

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