The advantages of cost reductions, standardized manufacturing processes, and real-time analytical insight have been the goals of enterprise resource planning software since its creation over four decades ago.  Engaging as these goals are in principal, there has always been a struggle to make these happen without removing business unit independence within the company, perpetual process standards that result in inferior product and service outcomes, and defining the true measure of payback for ERP systems.  Exacerbating the ERP concept even more is the endless enterprise consolidations taking place in the global economy of the 21^st century.

Therefore, integrating not only business practices, but also the often divergent IT approaches of two or more merging manufacturers is something that happens with greater frequency, and is something to not be taken lightly.  We can call these consolidation efforts wherein executive sponsorship is of absolute necessity in order for the smoothest and seamless change to take place.  Furthermore, in many instances such changes involve machinery, technology, and management as well as even, perhaps, large cultural changes in the way workers perceive their work environment as well as their work philosophy.

To the extent that new approaches to ERP must be considered in the new consolidation approaches taking place on the global arena, there must also be novel ways of perceiving business change at the cultural level.  For example, does a manufacturer really have the time any longer to make an incremental changeover to a new ERP software system?  Or, do cultural practices regarding labor and management dictate a non-parallel implementation of ERP?  As innovative designs in process integration and data integration are the drivers behind IT, it is certainly the case that most manufacturers would benefit from practice of an all-up approach to implementation.

Additionally, consolidation means having to reassess ERP environments where supply streams merge into one grand ocean.  Having an early sense of key processes, licenses, software versions, and so forth would mitigate problems down the road regarding the state of your business and ownership environment.  This could include looking for more logical groupings of people and production.  This could be by work centers, functionalities, processes, and even geographies.  In short, in consolidation scenarios where ERP changeover is involved, management must look beyond the short-term gain in a smooth transition and toward the longer-term strategy of growth for the sake of all involved stakeholders.

To consolidate is to combine the best of both worlds, while eliminating the worst of each.  This might mean maintaining status quo in changeover in order to allow smaller consolidation pilots to take place.  With these small pilot efforts, best practices can be identified at the local departmental level, and then blended with the findings from other areas around the operation.  This is where ERP consolidation benefits the most, for the smaller pilot efforts allow for a more efficient harvesting and disposition of diverse forms of data.

This entry was posted on Monday, November 3rd, 2008 at 9:00 am and is filed under Accounting, Implementation, Quality, Shop Floor. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.