THE PROVEN PATH

Today there is a tested, proven way to implement Enterprise Resource
Planning. Thirty or so years ago, no one could say that. Back
then, people said:
It should work.
We really believe it’ll work.
It stands a good chance of working.
It certainly ought to work.
30 ERP: M I H
2 Pareto’s law refers to the principle of the “vital few—trivial many.” For example,
in many companies, 30 to 60 percent of their sales comes from 5 to 10 percent of
their products. Pareto’s law is also the basis for ABC inventory analysis, and is used
extensively within Total Quality Management and Lean Manufacturing/Just-In-
Time.
No more. There’s no longer any mystery about how to implement
ERP. There is a well-defined set of steps, which guarantees a highly
successful implementation in a short time frame, if followed faithfully
and with dedication.3 These steps are called the Proven Path.
If you do it right, it will work. Period. And you can take that to the
bank.
How can we be so certain? How did this become such a sure thing?
The main reason centers on some executives and managers in certain
North American manufacturing companies. They had several things
in common: a dissatisfaction with the status quo, a belief that better
tools to manage their business could be developed, and an ample
supply of courage. These early implementers led the way.
Naturally, they had some help. Consultants and educators were
key to developing theory and practice. Computer companies, in the
early days, developed generalized software packages for material requirements
planning, capacity requirements planning, and plant
floor control. But, fundamentally, the users did it themselves.
Over the past 35 years, thousands of companies have implemented
MRP/MRPII/ERP. Many have implemented very successfully
(Class A or B); even more companies less so (Class C or D). By observing
a great variety of these implementation attempts and their
results, it’s become very clear what works and what doesn’t. The
methods that have proven unworkable have been discarded. The
things that work have been refined, developed, and synthesized into
what we call the Proven Path. Today’s version of the Proven Path is
an evolutionary step over the prior ones; it has been refined for ERP
but it is true to the history of proven success over a quarter century.
The Proven Path isn’t theory; it’s not blue sky or something
dreamed up over a long weekend in Colorado Springs, where the air’s
really thin. Rather, it’s a product of the school of hard knocks—built
out of sweat, scar tissue, trial and error, learning, testing, refining.
Surprising? Not really. The Proven Path evolved the same way
ERP did—in a pragmatic, practical, and straightforward manner. It
wasn’t created in an ivory tower or a laboratory, but on the floors of
our factories, in our purchasing departments, in our sales and marketing
departments, and on our shipping docks.
The Implementation Challenge 31
3 Faithfully and with dedication are important words. They mean that this is not a
pick-and-choose kind of process. They mean skip no steps.
This evolution has continued, right into the twenty-first century,
triggered by three factors:
1. New opportunities for improvement.
2. Common goals and processes.
3. Time pressures to make improvements quickly.
Keep in mind, when the original Proven Path was developed by Darryl
Landvater in the mid-1970s, what was then called closed-loop
MRP was close to being “the only game in town” for major improvements
in manufacturing companies. Quality? In the United
States that was viewed as the job of the quality control department,
and people like W. Edwards Deming and others had to preach the
gospel of Total Quality Control in other parts of the world. Just-in-
Time, and its successor, Lean Manufacturing hadn’t yet hit the
North American continent in any meaningful way. Other important
tools like Design for Manufacturability, Activity-Based Costing, and
Gainsharing, hadn’t been invented yet or existed in small and relatively
unpublicized pockets of excellence.
Today, it’s a very different world. It is no longer good enough to
implement any one major initiative and then stop. Tools like Enterprise
Resource Planning, Lean Manufacturing, Total Quality Management,
and others are all essential. Each one alone is insufficient.
Companies must do them all, and do them very well, to be competitive
in the global marketplace of the 2000s. Winning companies will
find themselves constantly in implementation mode, first one initiative,
then another, then another. Change, improvement, implementation—
these have become a way of life.
As competitive pressures have increased, so has the urgency to
make rapid improvement. Time frames are being compressed, necessary
not only for the introduction of new products, but also for new
processes to improve the way the business is run.
The current Proven Path reflects all three of the aforementioned
factors. It is broader and more flexible. It incorporates the learning
from the early years and includes new knowledge gleaned from ERP.
Further, it offers an option on timing. The original Proven Path dealt
with implementation on a company-wide basis only: all products, all
components, all departments, and all functions to be addressed in
32 ERP: M I H
one major implementation project. However, as we’ve just seen, the
current Proven Path also includes the Quick-Slice implementation
route,4 which can enable a company to make major improvements in
a short time.
The Proven Path consists of a number of discrete steps that will be
covered one at a time. We’ll take a brief look at each of these steps
now, and discuss them more thoroughly in subsequent chapters. The
steps, shown graphically in Figure 2-2, are defined as follows:
• Audit/Assessment I.
An analysis of the company’s current situation, problems, opportunities,
strategies, etc. It addresses questions such as: Is Enterprise
Resource Planning the best step to take now to make us more competitive?
If so, what is the best way to implement: company-wide or
Quick-Slice? The analysis will serve as the basis for putting together
a short-term action plan to bridge the time period until the detailed
project schedule is developed.
• First-cut Education.
A group of executives and operating managers from within the company
must learn, in general terms, how Enterprise Resource Planning
works; what it consists of; how it operates; and what is required
to implement and use it properly. This is necessary to affirm the direction
set by audit/assessment I and to effectively prepare the vision
statement and cost/benefit analysis. It’s essential for another reason:
These leaders need to learn their roles in the process, because all significant
change begins with leadership.
A word about sequence: Can first-cut education legitimately occur
before audit/assessment I? Indeed it can. Should it? Possibly, in those
cases where the executive team is already in “receive mode,” in other
words, ready to listen. Frequently, however, those folks are still in
“transmit mode,” not ready to listen, and audit/assessment I can help
them to work through that. Further, the information gained in audit/
assessment I can be used to tailor the first-cut education to be
more meaningful and more relevant to the company’s problems.
The Implementation Challenge 33
4 Quick-Slice ERP will be covered later in this book.