Effective ERP: Moving from management grip to efficiency
When some businesses deploy an ERP system, they think that control of their business operations will suddenly improve, as if by magic.
This is rarely the case and getting the most out of an ERP system requires a certain approach. The approach I like to describe is one that was explained to me as 'grip, then efficiency'. Or, put it another way - put your house in order and then get slicker.
With regards to using an ERP system, the grip comes from embracing logical tools and workflows that align with your business. Efficiency comes from managing your ERP's processes to minimise the amount of work required. Let me dive into some practical things you can do to improve both grip and efficiency
Understanding the workflows
As with all with all systems, one part of the system is connected to another part of the system. If you don't use one part of the system properly it is likely that another area will suffer. If there are gaps in the knowledge of your users, this is a good place to start. Find out how the system works and ensure your users know too!
If there are multiple ways of working your ERP system then it is a good idea to agree on the 'one best way' to carry out the task in question, define a Standard Operating Procedure (SOP) and train out the method. Having defined the one best way leads me into the next point.
Use accurate data
As programmers say, "garbage in, garbage out". Nothing is truer than with ERP systems. If you clumsily enter data into your ERP system it will catch up with you eventually.
Aside from mistakes being made from following incorrect instructions, if you have too much inaccurate data flowing through your system it becomes much harder to make decisions. If you can't make decisions swiftly from your ERP system then that is the time when spreadsheets and whiteboards start to take over (and probably the reason you switched to an ERP system in the first place!).
If you need to specify what kind of information needs to be inputted then do so. This might seem a little bit like going back to school, but your ERP system will thank you and you will get the benefits of having an efficient and effective system.
Sometimes, these kinds of input errors will happen even with the best intentions, which brings me to my next point.
Like your car, or any piece of equipment, it needs to be maintained. The way that you maintain an ERP system is primarily through housekeeping.
Keeping your key information up to date and clean is critical to gaining grip and efficiency from your system. By 'clean' I mean that data is complete and accurate. Statuses might need updating, works orders might need completing and sales orders might need shipping (for example).
Defining a routine to help you with your housekeeping is a great idea, and that leads me nicely onto my next point.
Develop and effective routine
Most businesses don't get the most out of having a routine. Routines are often applied to the lower levels of organisations but rarely get considered for management teams and executive boards.
From an ERP perspective, the following items work well when added to your weekly routine:
- Chasing up outstanding quotes (and tidying the contracts module).
- Reviewing jobs that are on hold due to changing customer requirement / technical issues
- Looking at your capacity levels from different horizons
- Low level works order scheduling
- Reviewing stock / perpetual inventory
- Expediting purchase orders
Look at your key business processes, the crises that repeat in your organisation and your main ERP modules to come up with a shortlist of items for your routine.
So, once you have a good understanding of your ERP workflows, have accurate information, are on top of your housekeeping and have developed an effective routine it is time to ramp up the efficiency.
Move into continuous improvement
With all of your fundamentals in place this is when you can move from grip to efficiency.
One of the best ways to do this is by using the 'CCC' method (also known as 3C), which stands for 'Concern - Cause - Countermeasure'. As well as being one of the simpler improvement methods, it is also brilliant in this situation.
If you haven't used this approach before, just follow these steps:
- Tell your team to capture any issues you have with your ERP system (you can widen this outside of your ERP system if you want), these are your concerns.
- Dig under the skin of each of the concerns and figure out what is really causing the issue. Don't settle for the first answer you get, really dig away to the core. If you know how to use the 5 Why method, consider using that here.
- Flip the answers to your root cause and define your countermeasures.
These countermeasures is your action plan to improve the effectiveness and efficiency of your ERP system. Keep adding to your list of concerns, never get too comfortable and voila, here is your recipe for ongoing system performance and business performance!
So, how does this fit with Fraction ERP?
Having a simple system, with good logical workflows and simple housekeeping views is one way to get a head start on this management challenge.
We designed Fraction ERP to be simple to use, but powerful enough to be an ally for your business. If you want to learn more about how the system works and how it can work for your business then fill in the form below to organise your free demo.