Technology is a key reason for manufacturers’ ability to produce more output with fewer workers. So when it comes to information systems, can you best maximize your investment in manufacturing IT systems?
Automation, machine-to-machine data exchange, robotics, mobile data access via the ubiquitous cloud, manufacturing 4.0: all contribute to what has become an efficient industry that far more productive than three decades ago.
However, the enlightened manufacturer understands it is not merely technology alone which fuels the enviable record of efficient production. It is only when the proper technology is deployed along with well-designed business processes that the enterprise can function at its optimal and generating the ROI that technology solutions promise.
Getting the most out of an investment in manufacturing IT seldom produces the desired results unless a simultaneous review and redesign of business processes is undertaken.
First Things First: The Current State
As an independent ERP consulting firm, we guide our clients to take a critical first step when looking to maximize an investment in manufacturing IT.
It’s imperative to define business performance measurements. We look to The Balanced Scorecard by Kaplan and Norton to help clients determine the next steps. It recommends creating a scorecard to track the metrics of four categories:
- Customer measures
- Financial measures
- Internal measures
- Innovation measures
When the effort gets underway to evaluate the current state, it helps establish a baseline from which your enterprise can track results from its current state. Determining the desired future state defines what success looks like and whether the cost is worth the investment.
Assessing Business Maturity
The role of an ERP consultant adds some clarity when looking to get the most ROI out of an investment in manufacturing IT.
We guide our clients to assess the capabilities and maturity of the business and its processes with the use of the Capability Maturity Model.
Companies contemplating an investment in new technology solutions typically are aspiring to achieve Level 5 results but aren’t there yet.
Companies in the underperforming levels often attempt to be everything to all its customers. This can cause the business to be over-extended and ineffective at attaining any of their goals.
With the existing technology platform assessment and a review of the top-level strategy complete, the team now has the vision to attain the appropriate strategic tools to complement the opportunities and performance metrics that have previously been developed.
Now the real work of maximizing the ERP investment begins.
When it comes to an ERP project, managing project resources can become complicated quickly. So early on, limit the number of projects that are active at any given time for any individual.
This is proven to help drive a faster ROI for the ERP project team.
A key to leveraging investment in manufacturing IT will depend on completing active projects as fast as possible. To accomplish this, break down projects into the tasks required to complete the project. Tasks should never take longer than 1-2 weeks. This provides a way to keep the responsible task leader and team focused.
If task completion dates begin to slip, it’s a sign that team members are overloaded and an assessment of the number of active tasks is in order. In addition to actively managing and participating in the active project, members of the Transformation Lead team must be the thought leaders for your business. It’s critical that team members are well-versed in the nuance and skills of Six Sigma, Lean Manufacturing and managing cultural change in an organization.
The Future State
Many manufacturing companies set goals based on historical performance. It’s easy to look at last year’s performance and set a goal to increase revenue by 10 percent or reduce costs by eight percent. This is better than standing still but hardly world class.
World-class results won’t be achieved merely by upgrading your current ERP system or purchasing a new solution. There has to be a concurrent emphasis on evaluating current business processes and introducing a more efficient and less wasteful process to drive business improvement processes.
Establishing a stretch goal that represents a 30-50 percent improvement over the baseline is only accomplished when the team understands it can no longer rely on legacy work processes. In order to achieve a stretch goal, everyone must utilize the tools at hand and be prepared to alter business processes in new and innovative ways.
Key Take Away
It might be counter-intuitive but driving ROI from your investment in manufacturing IT is not all about technology.
Evaluating the right technology solution for business process improvement and revising work processes can result in a business that is significantly transformed and operating at optimal efficiency.
As business improvement consultants, we remind teams that when the desired future state has been realized the pain of changing workplace behavior and learning new skills will be forgotten.