ERP News

Avoiding Cracks in ERP

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One of the problems in running a business is that things can fall through the cracks. Things that should be done don’t get done, or get done poorly.

 

A crack, in this sense, is a situation that isn’t handled correctly. As a result something that should be done doesn’t get done.

 

ERP is designed to keep things from falling through the cracks. In theory the ERP processes won’t let anything be ignored. In practice the situation is not so clear cut. Things happen and business efficiency – and customers – suffer because of it.

 

The first step in keeping things from falling through the cracks is to make sure your ERP processes don’t have cracks.

 

In ERP a crack typically results from an incomplete process design. That is, the process doesn’t cover all the possible situations. This is the result of inadequate planning or poor process design.

 

Cracks can develop as businesses change over time. New circumstances can arise that weren’t allowed for in the original design. This means that the processes need to be adjusted to meet the changed conditions.

 

In designing a process for ERP, it’s important that all possibilities be covered, even the unlikely ones. In fact the unlikely outcomes are the most likely to become cracks because the process designer didn’t think the process through far enough.

 

On long lead time projects, change orders are a fertile source of cracks. Changes are a fact of life and the longer it takes to ship a product to the customer, the more likely it is that there will be changes. As a result the order is prepared incorrectly or, worse yet, it gets stuck in limbo.

 

The changes don’t get communicated to the right people, or those people don’t act on the changes.

 

Here again, the problem is in part process design. If your business processes don’t have a robust way of recognizing and responding to changes in orders, you have a big crack and a chance for a major problem.

 

Another reason cracks occur is lack of oversight. The process fails to function properly and no one notices. At least no one notices until the customer raises hell.

 

This is usually a failure of organization. Not having someone checking to see that things are going smoothly. There is a presumption, especially with ERP, that everything is proceeding normally. While it’s true that things are more likely to proceed without problems with ERP, this isn’t automatic and there needs to be adequate supervision.

 

It’s important that you have an automatic review process to make sure things in your ERP system are progressing normally. One way to do this is to set an alert on any action that is taking significantly longer than it should. If an order is taking too long to ship, for example, a manager should be automatically notified to take corrective action.

 

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