ERP Project Phase 1: Business Process Improvement

For R&L Spring Company, Lake Geneva, Wis., an OEM manufacturer of precision springs, rings, wire forms and other wire products, choosing the project team was the first challenge.

“In our methodology, the Business Process Improvement phase starts with Project Organization,” said Ultra Business Consultant Shannon Harrop. “We reviewed the goals of the project with R&L’s project manager, and we discussed what we want from the project team.”

The project team, Harrop said, must consist of the people who understand the current system and the company’s unique business processes and workstreams. What’s more, the team members need to have a vision for the future state of the business.

“For R&L, which is a small organization, it was both easy and difficult to select the team,” Harrop said. “It was easy because we only needed seven people. Difficult because each person handles multiple functions. So, we had a lot of overlap. It was difficult, also, because the small team had to be able to handle the extra workload required by the project.

“We used a process inventory to determine the seven core team members,” Harrop continued. “And we made sure we had people on the team who could speak to all the processes targeted for improvement.”

The seven core team members are the key decision-makers on the project, and were supplemented as needed by additional experts identified by the team in advance. These SMEs were called in for limited-time, level-two discussions.

“For a successful project,” Harrop said, “it’s important to start by knowing the processes in each workstream, determining which will be addressed when, and to have the right people in the room making the decisions.”

Determining the Current State, Finding Opportunities for Change

With the team built, the next milestone was determining and documenting the Current State. “We went through the workstreams one by one, and through the process inventory list, to understand how they do what they do,” Harrop said. “And, when we needed insight into complex, unique processes, we talked to the SMEs.

“Then we had follow-up discussions with each process owner to get their insight, capture greater detail and know all the variables – in short, we needed to learn the complexities of how their process works in reality,” Harrop said.

Throughout this process, the Ultra consultants captured opportunities for change – opportunities for new efficiencies, system issues to fix, missing functionalities, process issues and critical gaps. This information, along with the detailed knowledge shared by process owners, was used to assess the maturity of R&L Spring’s processes.

“It’s important for us and our clients to know where their processes are on the maturity scale, and how they compare to industry benchmarks,” Harrop said. “Typically, we ask them to self-rate, and then we compare those ratings to where the information we’ve gathered shows them to be. It often is extremely enlightening for our clients.”

The maturity scale is critical to the project: It informs the project plan, sets project priorities, identifies key for focus, enables improvement metrics and sets a baseline for KPIs. Most important, it provides a foundation for determining the Future State.

“This is the part of the project that can get overwhelming,” Harrop said. “It’s easy for the project team to get frustrated and ask, ‘Can we really be this bad?’ So, we make sure they understand that we’re not there to change everything all at once. We tell them that it’s a journey, and we’re only at the beginning.

“We told R&L Spring not to get concerned about their Current State. We knew we would find opportunities for change – some simple, some difficult – and that we will work together to improve efficiency, and to build new and better processes.”

Next: Continuing the Business Process Improvement phase – Visioning & Education, Future State, Business Case for Change