2.5 Checklist for ERP Implementation

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Brandon Lewis
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1 2.5 Checklist for ERP Implementation

2 Learning Objectives Discuss the elements of the ERP checklist Explain the importance of education and training Discuss the implementation plan Discuss the activity of technology evaluation Highlight implementation cost and potential benefits

Discuss the implementation plan Discuss the activity of

3 Introduction Implementation must be carefully planned and controlled as it affects: Processes People Performance

4 ERP Checklist 1. Company wide education 2. Management leadership 3. Performance measurement 4. Organisational accountability 5. Project organisation 6. Project plan 7. Business processes 8. Technology evaluation

5 1. Education & Training Top management Application of ERP concepts to the company Operations management Capability of ERP Critical mass of the company Usage of the ERP software

6 2. Leadership Senior manager to champion the implementation: 1. Budget/manpower approval 2. Develop policies and plans 3. Establish and enforce accountability 4. Enforce disciplines 5. Review project status

7 3. Performance Measurement Financial performance Operating performance 1. Top management planning 2. Operations management planning 3. Database 4. Operations management execution

8 4. Accountability Most effective way to create accountability is to: 1. Have clearly defined roles and responsibilities 2. Schedule regular process review meeting chaired by the process owner

9 5. Project Organisation Steering Committee Project Manager Project Team Members Marketing Finance Manufacturing Materials Engineering Purchasing Trainer Quality Information Systems

10 6. Implementation Plan Mission statement Operating plan System implementation plan Education and training plan

11 System Implementation Plan First Cut Education Justification, Commission,Responsibility Initial Education & Training Ongoing Education & Training Inventory Accuracy Routings,Work Centres Financial Information Bills Of Material Accuracy Item Analysis MPS Preparation Systems & Software Pilot Cut Over Systems Pilot Shop Floor Control Capacity Reqts Planning Purchasing Cut Over Systems Implement Financial Planning Simulations 0 Months MRP MRP II ERP

Material Accuracy Item Analysis MPS Preparation Systems & Software Pilot Cut Over Systems Pilot Shop Floor Control

12 MRP Phase First cut education program Justification, commitment and assigning responsibility Improve inventory accuracy by tightening stockroom control Provide broad base education for all people using the system Aim at 98% BOM accuracy

accuracy by tightening stockroom control Provide broad

13 MRP Phase Establish essential ordering policies Establish production plan and MPS policy System selection and customisation Pilot program on one group of product line and monitor critical measurements Full implementation

selection and customisation Pilot program on one group

14 MRP II Phase Training users on using SFC, CRP, Purchasing etc Improve routing accuracy (95%) Pilot implementation of SFC Full implementation

15 ERP Phase Incorporate/integrate financial data Implement: Financial planning Product costing Inventory valuation Payroll connection Accounts payable Accounts receivable

16 7. Business Processes Business Process Re-engineering (BPR) Bills of Material 99% accuracy Routing 99% accuracy Inventory 98% accuracy SOP reviewed monthly

17 8. Technology Evaluation 1. Software selection a) Definition of requirements b) Software selection team c) Compilation of business system requirements d) Identification of system providers e) Demonstration by system providers f) Analysis and recommendation 2. Software implementation Customisation

team c) Compilation of business system requirements d) Identification of

18 Implementation Cost vs Potential Benefits Implementation cost Hardware Software Inventory accuracy BOM accuracy Routing accuracy Education & training Consultation fees Potential benefits Inventory reduction Improve customer service Improve resource utilisation Improve productivity Cost reduction

training Consultation fees Potential benefits Inventory reduction Improve

1.3 ERP System Evolution

1.3 ERP System Evolution Learning Objectives State the purpose of enterprise resource planning (ERP) systems List the challenges facing the industry List the development stages of the manufacturing planning