The Future, and 3D Printing

Manufacturing, long one of our key topics here, continues to evolve.  We’ve written before about “additive manufacturing,” more commonly known as 3D printing, and a recent article by the editors at Bloomberg points out where all this is heading.

As we’ve noted before, the basic concept behind 3D printing is that you download a digital instruction file for a design and, using one of many available “printing” devices on the market today, the machine very slowly (but increasingly faster these days)sprays  a material, usually a special plastic, through a heated nozzle in slow patterns in order to create actual objects.  There’s been a lot of press lately about the law student in Texas who published full instructions on the Internet for printing out a usable gun.  While he was subsequently forced to take the file down, it had already been downloaded by over 100,000people.  Such are the dangerous implications of this unbottled genie of technology.

But beyond the controversy, we think (as does Bloomberg) that the potential is, in their words, “stunning.”  Already global sales of 3D printing are said to have reached $2.2 billion, and are expected to triple by 2019.  A company called Kor Ecologic is producing a car – the Urbee 2 – which, when completed will weigh 1,200 pounds, and be comprised of about 40 pieces of thermoplastic, requiring minimal time and labor to assemble.

Bloomberg’s question in an article published in their magazine’s May 20 issue is “whether the technology will transform manufacturing more broadly.”  We think long term it will.  While today’s printers are slow and the materials expensive and inconsistent, you just know those wrinkles will be worked out in time (just look at computers in general!).  Longer term, it’s a potentially disruptive force in supply chains, when you think about the reduced need for warehousing, inventory planning, shortened supply chains and reduced assembly lines.  There’s potential for elimination of a lot of waste, shipping and pollution long-term.  Those kinds of trends always win out in the end.

Bloomberg also points out how down the road (a “few decades” in their view) engineers “should be able to blend raw materials in new ways, endow products with nanotechnology and artificial intelligence, and create objects that interact with their physical environments.”  Think armor with embedded sensors or a turbine blade that monitors its own temperature.

If you really think about it, it’s the fulfillment of the promise of “mass customization” toward which manufacturing has been slowly evolving for decades – and only more rapidly of late.

Of course, the downside, besides our earlier make-your-own-gun example, includes the intellectual property aspects, with so many items subject to possible counterfeiting, and all the ensuing lawsuits that are bound to follow – thus likely making attorneys as a group one of the beneficiaries of this growing technology.

Think too about the implications for medical devices, vehicle parts, and homemade replacement parts.  The list goes on.   And finally, as Bloomberg reports, this: a recent report from Washington think tank called the Atlantic Council predicts that 3D printing “has the potential to be as disruptive as the personal computer and the Internet.”

And we can’t even count the number of careers and companies those have launched.

 

What Constitutes an ERP Failure?

In our prior post we described what Panorama Consulting in a recent article said were “3 Things That Will Help You Achieve ERP Success.”  They published a companion article around the same time this year in which they suggested what constitutes a failure in an ERP implementation, which we’ll highlight below.

Noting that according to a survey they recently completed over 80% of ERP projects are late, over budget or fail to deliver expected business benefits, they make the point that while these events are indeed frustrating, they don’t necessarily constitute failure.

In fact, their survey showed that ‘operational disruption’ occurred in over 40% of organizations, but that in about half of those cases, the disruption lasted only between a week and a month.  (The other half consisted of projects whose disruptive effects last several months longer.)  That’s not failure, it’s just disruption, and frankly, it’s common.  Projects are typically over sold and underestimated, and everyone gets ‘happy ears’ at the outset, so the results should come as no surprise.

The failures, in truth, are what come as a result of the disruptions, or of poor implementation planning, and for evidence of this Panorama cites a good example.  A client’s engineers and sales reps were having trouble with the product configurator in their new system, not uncommon among ETO (Engineer to Order) manufacturers.  The consultants recommended delaying the Go Live by 30 days to allow users to become more comfortable with the new processes, an unwelcome event with an estimated cost of $70,000.  Instead, the client opted for “a Hail Mary flick of the switch.”  In other words, they rolled the dice that the decision would not affect their business.

You can probably guess the outcome.  The client had not built enough safety stock to account for a potential disruption, barged ahead before critical engineering processes were fully defined, and experienced a revenue loss of over two million dollars as a result.

The good news is that most failures are avoidable.  Sure, delays are sometimes required.  Disruptions happen.  Training, implementation and configuration can take longer than expected.  But with the right focus on, and belief in, sound project management and the right expertise and methodologies, companies can succeed.  (And it helps to define success, as we noted in our prior post.)

 

3 Things That Will Help You Achieve ERP Success

A recent article from Panorama Consulting noted that while many, some say even most ERP projects take longer than expected, go over budget, and fail to deliver expected business benefits, research from Panorama’s “2013 ERP Report” indicates that an overwhelming 86% of surveyed firms still report being generally satisfied with their ERP implementations.

Why the dichotomy?  Well, at least partly it’s because those companies had no clear definition of success.  So once the transition pains subside, they report overall satisfaction.  Perhaps raising the bar a tad is in order, and to this end, we submit Panorama’s three key steps companies can take to ensure their ERP project teams actually achieve real success…

1.) Clearly define success.  While for many companies we see, “anything is better than what we have…” you’re not spending hundreds of thousands (or in large companies, millions) of dollars to achieve incremental success.  You’re looking for a tangible return on investment from your software.  The “business case” should be the key mechanism for both justifying the investment and for defining what constitutes success.

2.) Articulate expected process improvements.  Expected business improvements should be equally well defined and clearly articulated to the project team.  More than merely suggesting software will make things better, the process improvements should be clearly defined and documented in a way that they can actually be enabled.  For our clients, we like to define these during the initial Business Process Analysis in order to ensure they become a part of the eventual solution.  If you clearly define the ‘before’ processes and then the proposed ‘new’ processes, you stand a much better chance of actually streamlining operations.

3.) Conduct post-implementation audits.  About 90 days after implementation, conduct an audit to ensure that actual results are measured and compared to expected benefits.  Look for places where processes are breaking down, inefficient, or not delivering results.  While painful, this is often the low hanging fruit that can help justify early investment.  We often find that training is a key area that has been neglected.  Often too, we find that report creation, business intelligence, drilldowns, and all the ‘after-the-fact’ data revealed by the new system is ignored or insufficiently exploited.  The post-imp audit period is the perfect time to look for improvement in these areas.

Words to the wise…  it’s all about getting your money’s worth!

For contrast, in our next post we’ll take a quick look at what Panorama Consulting says constitutes an ‘ERP failure.’  Stay tuned…

 

10 Ways to ROI with ERP (Part 2 of 2)

In our prior post, we introduced you to Panorama Consulting’s 2012 ERP study, which reported that roughly half of all ERP projectS go over budget, over time, or both.  In our prior post we listed 3 key action items (“Benefits Realization Activities”) suggested by their staff.  Today, we’ll cover the remaining 7:

4. Operational Metrics and Benchmarks:  After you develop your high-level business metrics (key performance indicators, or goals) translate those metrics into operational numbers to which executives are held accountable.

5. Design Detailed Business Processes:  This process is begun during the initial Business Process Analysis.  Once that’s done, take this modeling to the next level and develop more detailed documentation to ensure that teams clearly understand their roles, responsibilities and key processes.

6. Group Metrics, Processes and Benchmarks:  While departmental metrics are useful, these must be translated to an individual level to gauge performance person-by-person.

7. End-User Training:  Use the process models detailed above to develop end-user training that not only helps employees understand how to use the new technologies but also how to perform new processes and job functions. Many training programs underestimate the value of the latter.

8. Benefits Measurement:  Here’s where real value is found.  Measure actual benefits after implementation and compare the results to projected departmental and individual metrics to identify any potential benefits gaps.  But don’t expect full benefits to be achieved for some time.

9. Root Cause Analysis of Benefit Gaps:  Work to understand why gaps exist between potential and actual benefits realization.  Are workers reverting to workarounds because they understand how to use the technology, but not the importance of doing so?

10. Implementation of Corrective Action:  Follow-up training, enhanced communications, focus groups and process control and governance are some common ways to bridge gaps and enhance ROI.  Remember, it’s part of your Lean process, and thus, it’s all about continuous improvement. 

Apply this thinking and these action items as you roll out your ERP implementation and you’ll be making serious inroads toward improving your ERP return on investment.  Better still, keep it up, and you’ll be maximizing that return for years to come.

As we noted previously, the Panorama White Paper can be found here (registration may be necessary).

10 Ways to ROI with ERP

According to a 2012 report by Panorama Consulting on the state of Enterprise Resource Planning systems – the lifeblood of any growing business today – a whopping 57% of ERP projects go over budget, and nearly that many take longer than expected to implement.  Moreover, according to their research, nearly half of all projects “realize less than half of expected benefits” and nearly 30% “have not recouped any costs.”

It doesn’t have to be that way.

Companies who start with a focus on “benefits realization” have the best shot of measuring, then attaining, a suitable, and even enormous, return on investment (ROI).  Simply put, benefits realization is a comprehensive project approach that focuses on identifying, measuring and ensuring the business benefits achievable through technology.

You break down high-level business benefits into “manageable, actionable chunks” as Panorama best puts it.  You measure the benefits after implementation and utilize tools to ensure that the benefits are maintained, then sustained.  In short, you’re merging the technical aspects of the implementation with the business aspects of the implementation to ensure that benefits are realized.

In a recent White Paper, Panorama described their take on Ten “Key ERP Benefits Realization Activities” that focus on business value, ones companies implement as part of an overall ERP project plan.  [Find the original white paper here.  You may need to register first.]

We’re reprising them here because we believe strongly in the wisdom these profess.  Fully half the action points below relate to how well a company assesses its internal needs, maps its workflow and processes, prepares itself for ERP, and measures its progress – all critical components that being with a functional needs analysis (or what our firm refers to as the Business Process Analysis).

We’ll review Panorama Consulting’s first 3 Benefits Realization Activities in the rest of this post, and list the other seven in our next post.  The first three, with excerpts from their comments…

1. High-level Business Case, Corporate Metrics and Benchmarks:  It is important to identify and quantify the potential benefits of the project and then compare those benefits to the projected costs associated with the proposed information technology.
2. Organizational Readiness Assessment:  Assess the company’s culture and identify employee resistance to change early in the project in order to pinpoint activities necessary to overcome this resistance.
3. High-level, Enterprise-wide Business Processes:  Business processes need to be modeled and improved to improve efficiency and to make certain that technology is not merely used to “pave the cow paths.” Even more importantly, these defined business processes should ultimately drive overall ERP design, configuration and implementation.

This is a critical topic when a company evaluates ERP.  We’ll close out with Panorama’s remaining seven action items in our next post, so stay tuned…

 

4 Capabilities of a Lean Company – As Defined by Lean Behaviors

We found a very good article on article that goes beyond the usual talk of Lean, and moves into the subject of Lean behaviors.  In doing so, the author of the article found here shifts the lean emphasis from purely Lean and Toyota Production System concepts over into the realm of continuous improvement and respect for people.  In it, they refer to comments made by Steven Spear, co-author of Decoding the DNA of the Toyota Production System and author of Chasing the Rabbit.

Spear offers insights into the more personal side of lean by noting 4 capabilities of lean companies.  We’re posting these four below as taken directly from the captioned article:

1. Design processes in a way that participants in the process see opportunities for learning. Make anomalies, incidents and problems jump out in the process of performing the work.
2. Swarm the anomalies, incidents and problems. Bring people quickly together at the site of the problem, with the people who were present to the problem, and immediately when the problem occurs. The intent is to study the incident (problem) to get to the root cause. It’s all about learning.
3. Share what you learn with all relevant parties in your company. Do it immediately. Do it extensively.
4. Lead the company in a way that others develop the above three capabilities. In other words, create people who are intent on learning every day from what is occurring while doing the everyday work of the company.

If it all sounds deceptively simple, that’s probably because, well… it isn’t so simple in practice.  The article diverts a bit at this point into a pitch for the author’s company’s own project management tool, but in quoting from Spear they really do highlight the opportunity inherent in lean for certain ‘teachable moments.’   It touts rightly the importance of using management to teach and lead, not necessarily directing the work or solving the problem.  It’s about building competence so that you eventually build confidence in your people.

And that’s probably why it isn’t so simple.  We’re talking here about cultural change in the company and behavioral changes in individuals – and therein lies the very essence of teaching.

And a true lean opportunity.

Eliminating Resistance To Eliminating Paper

Hard as it may be for some to believe, some folks still resist the notion of going paperless, even in today’s modern office environments.  Those with long business tenures have developed a certain attachment to the paper trail of invoices, document approval procedures, organized paper filings, and the like.  Modern ERP systems like Microsoft Dynamics NAV and others are quickly making paper documents largely a thing of the past.

Thus, it’s important that business managers take appropriate steps to going paperless that will gently suppress the resistance that sometimes emerges.  Recently, a white paper published by Metafile Information Systems, which bills itself as “an independent provider of paperless document management applications,” put forward their five approaches to doing just that, which we’ve reprised below.

1. Deploy Paperless ERP in its out-of-the-box form, without customizations.  It’s easy to lose control of the paperless chase when everyone involved has their own idea about the customizations they “absolutely have to have.”  Trying to understand every such nuance can seriously complicate and delay implementation.  At least in the early going, keep it simple, and keep it simply “out-of-the-box.”
2. Crawl before you try to walk, run or fly.  Don’t subject your AP department to a huge change in processes all at once.  Begin with the basics, ensuring paper documents are scanned into the system where they can be managed, stored and routed more easily than paper.
3. Don’t confuse Paperless ERP with the “paperless office.”  Don’t scare folks with comments like “employees will never be able to touch paper again.”  Let people feel free to print out those documents they feel necessary (to take to meetings, etc.) – just make sure the paper versions are supplemental to the digital, and not the other way around.
4. Don’t overcomplicate your relationship with paper-based vendors.  While large companies may have mastered EDI transmissions, don’t assume many of your smaller suppliers have – because, we can assure you, they haven’t!  However, with merely a recent version of Microsoft Word, anyone can save a document as a PDF, and all that’s required to send a PDF is an attachment to an email.
5. Avoid resistance from approvers in other departments by keeping the process standardized.  If a customized approval process requires, say, that only a work PC be used for approvals, users can find themselves “simplified” into limited access.  If access is available via the Web for example, they “do not need to worry about maintaining different software for occasional approvals outside the office and can use simple mobile devices for approval.”  Managers using dashboards can then have more visibility into the business from wherever they may be at the moment.

At our firm — and for many of our clients – going paperless has been one of the quickest ROI turnarounds of any in the ERP process.  As we’ve written about in previous posts, the elimination of paper invoices, POs and related documents results in an immediate and meaningful cost savings that today is within the realm of virtually every business.  Better still, it’s a cost savings that comes very cheaply, and it’s there for anyone who wants it with most of today’s more modern ERP systems.  Just ask your provider!