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donationThe Wall Street Journal recently ran an article (4/12/14) pointing out just how few people the entire world wide web actually relies upon for much of its security.  According to the article by Danny Yadron, the recent encryption flaw underscores this very weakness:  It is “mostly managed by four European coders and a former military consultant in Maryland.”

The Journal article points out that most of the 11-member team are volunteers, and only one works full time.  Their budget is less than $1 million per year.  The Internet’s encryption methods are largely based on something called OpenSSL, a protocol developed in the 1990s to create a free set of encryption tools that have since been adopted by about two-thirds of the world’s Web servers.

The most recent incident we’ve all heard about, Heartbleed, was a bug unintentionally introduced by a programmer on New Year’s Eve, 2011 while working on some bug fixes for OpenSSL.  The bug was subsequently overlooked by others until discovered recently to much fanfare and alarm.

The OpenSSL data encryption project is run by a full-time developer named Stephen Hensen, described by Yadron as “a 46 year old British cryptographer with a Ph.D. in math.”  A couple other Brits and a German fill out the project’s management team.  The team is constantly refining the secure sockets layer (SSL) which guards again hackers reading data that users send to websites.

All the team members, it is noted, are outside the U.S., to avoid arms export laws that apply to advanced encryption.

But arguably the best part of the story is this: The foundation that runs OpenSSL relies mostly on $5 and $10 donations, according to the Journal article.  They have seen a slight uptick in donations since Heartbleed was disclosed.

So there you have it folks: the most critical layer of most Internet security is run by a miniscule team of mostly volunteers who accept small donations for their efforts.

Happy surfing… but please, give til it hurts, won’t you?

 

forecastingOur friends at APICS recently pointed out some thoughtful considerations for those companies who find that their forecasting performance for inventory, sales or production are not as accurate or stable as they would like.  In the Mar/Apr 2014 issue of APICS Magazine, research director Jonathan Thatcher writes about the key issues companies must consider.  We’ll reprise a few of his key suggestions today.

First, notes Thatcher, “Don’t schedule production based on the greater of the forecast or sales orders.  Instead, make sure orders consume the forecast as they come in.  Ideally, your ERP system should display figures for forecast, customer orders and requirements summary.”

So for example, when the forecast calls for 100 units and customer orders equal 25 for a given period, this leaves a remainder of 75 forecast units.  Production does not care whether the units are ordered or forecast – they’re just “units” to them.  Through Sales & Operation Planning then, your team can consider the ideal forecast to project, based on sales trends as well as how well production is meeting demand while avoiding adding unnecessary inventory.

A second issue Thatcher notes is what’s called the MRP demand time fence (DTF).  Set the DTF equal to production lead time, and make sure your MRP system shows forecasts to zero within the demand time fence.  If it takes one week to manufacture a unit, then the DTF would be one week.  As the article posits: “Forecasts made inside the DTF should be ignored as it is too late to produce them, and those forecasts will overstate demand.”

And of course, don’t forget to flag extraordinary or non-repeating (“odd”) orders.  Don’t make these outliers part of history on which regular forecasting is based.

Finally, make sure that your weekly forecasting period matches the periods used by sales.  Sales rarely occur evenly week over week.  Aggregate numbers, Thatcher points out, “are your friends” insofar as “data based on long histories is easier to forecast than daily or weekly data” with less variability.

By definition, APICS notes, “no forecast is completely correct.  But we can get a little closer to perfectin with a stronger forecasting practice.”

For more information on this topic, try starting at the APICS Magazine site here.  (Note: there is generally a lag-time between the appearance of an article in print form and its appearance at their site.  The article excerpted above came from the “Ask APICS” section of the Mar/Apr issue.)

dms_logoThis post series begins here.  It’s based on a brand new white paper produced by our partners at DMS in Canada.  Learn more about them here.

In today’s final post in this series, we’ll look at DMS’s final two tips (No’s. 9 & 10):

9.    Set Realistic Expectations.  Manufacturers often have lofty expectations of their ERP system, as DMS points out – understandably, considering the money being spent.  But, they point out, “Having realistic expectations for the amount of time that is spent on the implementation, training and rollout is essential toward calculating the correct return on investment (ROI).  One thing that cannot be accounted for, but should be expected, is the inevitable bump in the road, or where things come to a halt.”  Be sure to align your expectations, DMS advises, with the unexpected, too.

Be sure as well that there is a link in place between your processes and your ERP.  (We advise this is best accomplished via a thorough Business Process Analysis at the outset of your project).  According to the Aberdeen Group, 55% of best-in-class manufacturing operations tie their processes and operations together, as the cost savings gained help them utilize their software more fully.

DMS’s white paper makes the following key point about your expectations:

“ERP is a system where CEOs and executives have to put aside certain measurements. Once it is well implemented and integrated into a business, there will likely be results that are not easily measured or analyzed through statistics, such as better communication, improved decision-making, and better performance from manufacturing employees.”

10.    Listen To Your Staff.  As DMS notes, “End-users are the lifeblood of ERP implementation at manufacturing organizations.”  They are your best resource for measuring the success of your deployment.  We always advise: listen to them early and often.  Aberdeen Research has noted that the 20% of manufacturers who see the best performance in ERP are 75% more likely to measure performance and software analytics.  Often, it’s your users’ comments that help fine-tune these measurements.

Finally, don’t necessarily assume all is well with your new ERP system.  Talking to users is one of the best ways to determine if that is true.  Test and talk.  As DMS concludes, employees will be more willing to provide feedback if your organization is sharing news about what is happening during the ERP implementation and rollout.  As in most things in business, keep the lines of communication always open.

We hope you’ve benefited from our highlights – and our own commentary – of Dynamics Manufacturing Solutions’ implementation tips. They mesh well with our own advice of many years.  But, we believe, it’s always good to hear it from someone else.  For more info about DMS’s NAV solutions, contact us directly for guidance.  You can also visit DMS’s website here.

 

dms_logoThis post series begins here.  It’s based on a brand new white paper produced by our partners at DMS in Canada.  Learn more about them here.

In today’s post, we’ll look at DMS’s next 3 tips (No’s. 6, 7, 8):

6.    Ensure that Laptops, Desktops, Servers and Networks are Solid.  It’s important to have a good hardware infrastructure in place.  Test all your hardware.  Figure out how the hardware you now have in place will fit with your new software.  (We’ve found that relatively newer hardware can usually be repurposed with upgrades in RAM, disk drives or perhaps network controller cards to accommodate new software.)  Be sure your provider gives you a current spec sheet on both “minimum” and “optimal” hardware configurations.  And most important of all, pay close attention to your server needs.  It will be the workhorse of most systems, and the item(s) most likely to need upgrading.

7.    Identify Super-Users.  One way to smooth the path for your users is to engage a group of super-users to learn the software’s ins and outs first.  The client project manager should determine the key system advocates, and give them first shot with the new software.  (As noted earlier, we often do this in the context of a conference room pilot.)  End user system acceptance doesn’t happen automatically.  But if you can develop a few power users into system evangelists, those early victories can pay long-term team dividends.

Meanwhile, as DMS points out, keeping up communications across the team is essential.  You have to sell change as part of the new system.  Your firm won’t see benefit from the new system unless your team embraces those changes.  Your super-users can lead that charge and build momentum across the organization.  They have to be dedicated to organizational change and communication.  If that change is seen coming only from the IT team, it’s not likely to stick.

8.    Don’t Skimp on Training.  No surprise here, especially in view of our earlier comments.  But the training isn’t just for going live.  It should continue with refresher courses afterwards.  When you train… make the training role-based by user… make attendance mandatory… let employees know during training where it makes sense for them to come together as a team… engage your employees and try to make the sessions engaging, a little humorous, even exciting… give some thought to what else you can do to further each employee’s understanding of the system.

Finally, remember: this is about change, not just technology.  It’s a culture shift.  Understanding the importance of training – and communication – before, during and after, will be the differentiator that determines your level of ERP success.

In our next and final post, we’ll look at what the DMS e-book says about setting expectations and listening to your staff.  Stay tuned…

 

 

dms_logoThis post series begins here.  It’s based on a brand new white paper produced by our partners at DMS in Canada.  Learn more about them here.

In today’s post, we’ll look at DMS’s next 3 tips (actually, no’s 3, 4, 5):

3.    Be Open to Change.  Manufacturers with legacy ERP systems are used to doing things a certain way.  But with new ERP systems come new ways of thinking.  Taking advantage of changes in software, changing old system processes and procedures, planning for change… all of these require an open mind.  As Panorama Consulting points out from a recent survey on ERP deployment, about two-thirds of companies find it hard, and only about 30% believed this stuff was easy.  But as DMS notes, there are very few things worth doing that are truly simple.  Their advice: adapt for success and plan for change.  ERP is not just a capital expense, it’s a change management tool.

4.    Get User Buy In.  DMS says this is likely the most important part of the entire ERP process.  Communicating changes early and often is critical.  People don’t like change, so keep your employees involved.  Praise from supervisors and regular discussions with managers can keep employees motivated.  Identify the right metrics then track them to drive accountability home.  As DMS concludes, “No matter what a company does with its ERP implementation, it is essential to ensure employees are interested and involved. Without them, failure could be imminent.”

5.    Prepare Your Staff.  Too often, as DMS points, manufacturing firms underrate the importance of training.  Often, new or added computer skills are required.  Processes change.  Staff needs to be educated.  As one software consultant DMS quotes has noted: “Technology is easy.  People are complex.  Organizational dynamics are even more complex.” 

Thus, companies must plan for what is changing, determine which areas need training and what methods will be used.  Training needs to be targeted, and developed for the specific needs of the target.  This is not about classroom style training any more.  It must be tailored to the working needs of your individual users.  (In our own firm, we often start with initial training and testing during conference room pilots among select department heads or super-users, to smooth out the rough edges, before starting to train users downstream.)  The bottom line: have a training plan.

 In our next post, we’ll look at infrastructure, super-users and training.  Stay tuned…

dms_logoWe begin April with a series of 4 informative posts derived in part from a white paper from our friends at Dynamics Manufacturing Solutions.  We think the points they make, and that we enhance from our own experience in the series that follows, will be useful to manufacturers.

Recently, a company we partner with called Dynamics Manufacturing Solutions released a very good e-book entitled “10 Steps to Successfully Deploying ERP in Manufacturing Shops.”  DMS is an Alberta, Canada based provider of manufacturing software solutions designed to be integrated with Microsoft Dynamics NAV.  (Disclosure: PSSI partners with and sells DMS solutions to our manufacturing customers.  That said, their e-book strikes us as balanced, unbiased and very representative of our own advice to customers.  We think their advice is worth parsing and passing on in this blog.)

For the record, DMS can be reached here.  Their e-book can be found here though you may need to register first.

In our next few posts, we’d like to highlight some of DMS’s conclusions as put forth in their “10 Steps…” document, as we’ve found each step to be valid and worth the attention of anyone involved in an ERP project.

We’ll begin today with their first two steps, which cover project management and selecting and empowering your team.

1.    Professional Project Management. DMS begins by quoting accounting and advisory services firm Pricewaterhouse Coopers who note that “the leader of any project team is pivotal in forming the goals of an ERP solution.”  All companies have project goals for their ERP.  It’s the Project Manager’s job to figure out (along with their ERP provider) the timeline over the course of the project at which the various components will be functional.  Implementing, converting data, training employees and going live should all be benchmarks to a project’s success.  Project managers need to get to know their new software at a pretty granular level, and lead the team in testing, before releasing it company-wide.

PwC suggests appointing team members who are trusted and have experience in similar projects.  They recommend role-based training to employees in each area of the company.  It’s also the PM’s job to ensure the project stays on budget.  And while cost overruns can’t be eliminated in these sorts of projects, “they can be managed with the right tools and tactics,” DMS points out, quoting a Management Professor at Cal State Univ.

2.    Select Your Team and Empower Your Leaders.  DMS points out that more than just good intentions are required when deploying ERP in the manufacturing environment.  “There must be a proactive, intelligent leader who works to make the project successful from start to finish. Good leadership helps plan the adoption process, implement the software, train workers, and ensure everything runs smoothly.”

Your projects need a sponsor, and the sponsor must have a plan.  The sponsor must show interest, be trustworthy, smart, experienced and work well with their team.  It’s a manageable task, provided you think it through from the start.

In our next post highlighting DMS’s findings, we’ll look at the roles of change, user buy-in and preparing your staff.  Stay tuned…

 

Cloud-ERP-GraphA recent article from Panorama Consulting  [link may require registration] points out that the adoption rate for so-called cloud-based ERP systems is declining at a rather precipitous rate.  According to Panorama’s just released “2014 ERP Report” the percent of cloud and Software-as-a-Service (SaaS) ERP adoptions declined by almost 50%, from 26% of all implementations in 2012 to just 15% in 2013.

Our pie chart above, courtesy of Panorama graphically displays the overwhelming continued prevalence of on-premise (traditional) based systems.

Frankly, we’re not surprised.  We’re actually more surprised by how seldom we’re even asked the question, let alone fielding serious prospect or customer inquiries.  As Panorama’s CEO Eric Kimberling himself pointed out in a recent article, “This data point also conflicts with the continuing industry hype proclaiming the death of on premise ERP and touting cloud and SaaS ERP as the greatest thing since sliced bread, so what could possibly explain the disconnect?”

Panorama’s conclusion in part is that many of the cloud ERP vendors have not done a very good job of promoting their offerings, or of reducing user fears about security issues, or perhaps of simply educating potential customers about their options.

We would add to that the fact that in many instances, there are serious drawbacks to cloud based systems when it comes to ERP.  Few vendors offer true multi-threaded, multi-tenant implementations.  Modifications are often difficult, if even possible.  Security fears still persist.  And in most companies we see – at least in the smaller to mid-size space — the promised cost savings don’t necessarily play out as well as expected on an amortized basis over a range of years.  Like most “choices” the one between on-premise and cloud, or SaaS, is neither simple nor one-sided.

The jury is still out as to the viability of these kinds of solutions.   Our own specialty areas which include manufacturing seem to our way of thinking thus far to be a rather poor fit for the highly customized requirements of many in the manufacturing sector.  When you add to that a dearth of options, limited customizability, and a lack of education or muddled marketing from vendors, it’s not hard to see why the blue section of the today’s chart (the so-called “traditional” model) is still the largest, and according to Panorama, apparently a still growing share of the pie.

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