Read on for a first-hand look at the project as part of Ultra’s “Stories from the Field” blog posts.
This “mini case study” puts the focus on our efforts to drive business process transformation at the midmarket manufacturing company, along with a key lesson learned: the importance of setting a clear scope for an ERP project.
About the Company
The equipment manufacturer operates several manufacturing facilities and warehouses in the U.S. The facilities perform machining, stamping, coating, assembly, fabrication and other key processes.
The company has been in business for more than four decades, and has experienced significant growth in the last eight years. In the next few years, the company expects to scale the business and expand operations to global markets.
The Limits of Legacy Systems
In past years, the manufacturer relied on an outdated ERP system. After nearly two decades, it was clear that the company was severely impacted by the system’s lack of integration, decentralized data management, poor reporting and other key shortcomings.
As an example, the system did not offer any form of capacity planning. Without this key functionality from the ERP system, the team was forced to use manual tracking with spreadsheets and manual calculations to understand how to most efficiently project production needs.
This was a critical concern, because it was difficult for the company to effectively plan for anticipated expansion in terms of personnel, facilities, raw materials and product distribution to accommodate growth.
Further, the manufacturer had no easy way to get real-time analysis or reporting of daily operations.
It was clear that this environment hindered the chance for the company to optimize current operations, or scale for the future.
Manual Work-Arounds, Siloed Systems
Given the limits of the legacy ERP, the company built “home-grown” systems, relied on siloed solutions and developed complicated manual work-arounds.
As is typical with this kind of “patchwork” environment, there was a high chance of errors, time-intensive duplicate data entry, out-of-date reporting and other key challenges.
Because of these and related limitations, the organization was on the look-out for a new ERP system.
The First Step: Set the Scope of the ERP project
While it was tempting for the manufacturer to jump head-first into setting up demos of current ERP systems, the company turned to Ultra’s ERP consulting team for a proven selection methodology which started with a careful process to set the scope of the ERP project.
Establishing the scope of the ERP project is often the stage that gets overlooked due to time and resource constraints. Given the limits of the legacy system, the company was facing significant pressures.
However, in this case it was critical to take the time to fully understand the needs of the business and the expectations from all departments within the business.
To set the scope of the ERP project, the team took the following steps to:
- Identify key issues, stakeholders and impacts throughout the enterprise
- Evaluate current processes
- Analyze “What is working, what is not working?”
- Structure change management through education and communication
- Define future processes
A Look at the Current State
Analyzing the company’s current state required gathering key performance metrics and examining their value. Examples included productivity, quality, shop floor data, overtime, inventory, and others.
In this case, an integral part of the current state analysis was business process mapping.
By visually engaging in this business process documentation, it became easy for the team to identify waste and redundant processes. The current state problems were documented as opportunities to be addressed in the future state.
Applying a strategic approach sets the foundation for a successful selection and implementation.
Learn More to Set the Scope of an ERP Project
In the next edition of this blog series, we’ll look at the next steps to put into place as this engagement continues with the equipment manufacturer.
Check out additional insights from active ERP project engagements. As an example, our colleague Andrew Stein shared a “Stories from the Field” blog post summarizing a project in the construction industry.