How can ERP with built-in good practices of manufacturing companies help a fast-growing company successfully survive organizational change and implement ERP without much risk?
Fast-growing companies always encounter limitations that are not only represented by the market, machines and people, but also often get stuck in organization and communication. As long as communication in production takes place between experienced “first-timers” who know each other so well that they can exchange information with just a glance and accurately estimate times based on rich experience and very broad knowledge and familiarity with the issue down to the smallest details, the matter run smoothly and efficiently. At this stage, Excel and paper documentation are good enough tools to manage the process effectively. The accounting service takes care of the business part and the company operates without problems.
When the number of employees increases, the complexity of orders, the demands of customers, and the work is no longer carried out in a small location, problems begin to appear, which usually manifest themselves in the overload of individuals, problems with meeting deadlines and quality and managing efficiency and costs, as well as ensuring the right personnel.
In this step, growing companies start looking for solutions.
The importance of the right choice of ERP systems
Unfortunately, the success statistics of the implementation of ERP systems are not exactly brilliant, but the company can still protect itself and choose a less risky path. Proven solutions that have built-in good practices reduce the risk of unsuccessful implementation, but if they also provide experts who know business processes and play an advisory role during the implementation phase, as well as a development team that can support the company’s competitive advantages during implementation by developing specifics, it is this combination is a true formula for success.
There are many pitfalls in the choice itself, and one of the most common is that the company chooses a solution that is “too small” or a solution that is “too big”. Such implementations can be completed, but they leave behind a lot of parallel systems, manual work, copying data and dealing with the information system instead of the business.
The integrity of the provider in terms of understanding business and supporting processes is by far the most important. This does not mean that there is necessarily only one provider for all areas, but that the key provider covering ERP issues can play its role comprehensively and provide the data that decision-makers need for timely decision-making.
The digitized Deming Circle is the goal and consequence of a good and comprehensive implementation. No matter how well the production is planned, it does not help if it is not accompanied by proper implementation, monitoring and action.
Action can only be good when the data is up-to-date. Timeliness can only be guaranteed if the capture is automated and does not depend on the human factor and time lag. Planning can only be good when it is responsive and turns around every time there is a deviation, and takes changes into account.
Humans appear in this system when decisions have to be made, and therefore they must be competent and have the right information. A good ERP system has built-in knowledge and mechanisms that allow this Deming circle to spin. These mechanisms include HRM systems, fine scheduling systems (PREACTOR), MES systems, BI systems and are connected to external systems that enable forecasting and automatic data exchange and retrieval.
The future of ERP systems
Trends show that in the future, IT solution providers will continue to work intensively on improving the user experience and supporting rapid changes. Real ERP is part of successful digitization and is embedded in IoT, which increases the efficiency of systems through connectivity, and in addition, the data that has been accumulating in ERP systems for years is an important source of knowledge for decision-making. The quality of the forecast always depends on high-quality, realistic and sufficiently large amounts of data, which provide a statistically adequate sample that we can trust.
The expectations of the new generations are significantly different and for them, the use of solutions on mobile devices is primary, although it is difficult to imagine how the complex processes carried out in the ERP system will be managed with the help of a smartphone, this is a fact and the younger generations at all to think of other options. Similar to mobile solutions, it applies to the cloud, which will eventually become the only way due to its many advantages. The reason for this will mainly be the speed of implementation, price and security of the solutions. The cloud service is available anytime, anywhere, without high costs and demanding hardware. Maintaining hardware only for the needs of one solution and providing a team of systems engineers to take care of availability simply will not bear the cost and will hinder the competitiveness of companies.
Business intelligence (BI), which draws data from the ERP system and other connected systems and devices, will continue to be used to display data in the form that they need quick and reliable information for decision-making. With the concept of “BIG DATA”, data sources have become significantly wider and collected from various social and other networks.
ERP systems are already incorporating smart algorithms and analytics based on artificial intelligence methods. If we look at the primary role of ERP systems, which represents the efficient planning of various resources in the company, and focus on production planning, which is one of the key areas and to which Kopa gives special weight, we find that IoT and modern artificial intelligence algorithms can take a step forward in effective planning.
By connecting and taking advantage of IoT, ERPs are aware of what is happening and can, based on e.g. certain changes on the sensor relate it to a business effect and, by analyzing the combination of data and comparing it with past events, point out the business problem that this sensor state is shifting (e.g. the last time this temperature sensor showed a higher value, it increased the output by 2%.).
The role of ERP in digitization and connectivity with IoT
In this connection and the final round and the chain of which the ERP is a part, planning can be done effectively because all past and current data are available (link to the PREACTOR tool). It can be deployed based on this in a way that takes into account competencies, past good patterns, and even artificial intelligence algorithms that further improve the plan. When the plan goes into execution (UTRIP), compliance is monitored in real-time and action can be taken at any time when a deviation occurs. ERP, which is part of this connected whole, is aware of the situation at any moment and uses different mechanisms from escalations, to finding optimal replacements and suggestions that lead to optimal functioning of the system and the entire chain.
The essence of modern ERP systems lies primarily in the awareness of what is happening in the entire chain and the utilization of the knowledge hidden in the data.
