How to Use ERP for Continuous Improvement
When was the last time you sought to make a great change or process overhaul within your business? What motivated the switch in strategy and desire to improve? The reason is usually a significant roadblock built by ignoring business problems, until they grew into potential threats to your bottom line. These could be customer dissatisfaction, rundown production lines or poor employee engagement.
Taking a reactive approach to organizational change can take a huge toll on your company's resources. Because you already have significant areas of waste or problems within your business, fixing those leaks is even more of a challenge. The solution to these roadblocks: continuous improvement, or CI. Instead of huge, unscheduled projects that come up only as necessary, your business should be aiming at constant, incremental process improvement and waste reduction.
In the past 20 years, the experts at Datix have witnessed how enterprise resource planning (ERP) software can play a critical role in continuous improvement strategies and business growth. Below, we detail how to incorporate your ERP software into your CI methods.
Continuous Process Improvement
Continuous improvement can be applied across all areas of your business. Based somewhat on the Japanese concept of kaizen (where "kai" means change and "zen" means good), CI relies on constant reflection on your business processes, identifying areas of waste and reducing them so that your business takes constant steps forward rather than huge jumps when you come up against a rut. Think of it as a wide-ranging philosophy that you can use to drive concrete results. Rather than shy away from business changes, gradually change your processes to strengthen your enterprise and mitigate risk.
Continuous Improvement with ERP
The idea of continuous process improvement is certainly a lucrative one for any business. Who doesn’t want to improve every day and act proactively to prevent major setbacks? However, a successful and well-implemented continuous improvement strategy is easier thought of than achieved. The secret to getting it done—ERP software. With its wide-ranging and highly detailed data capabilities, ERP can greatly support continuous improvement and streamline quality standards and business processes. These include tracking and managing orders, shop floor activities and shipments. ERP can act like a magnifying glass into your business’ operations, creating drill-down reports on key processes. From there, you can hone in on areas of waste and work continually to reduce excess costs.
Start with Implementation
ERP implementation is, naturally, a huge process. It’s best to approach such a project with the concepts of continuous improvement in mind—one step at a time. You don’t need to get your entire organization on-board the ERP ship simultaneously. Implement and train department by department, prioritizing those users who will be most reliant on the software first. These early adopters will become power users who can then disseminate their knowledge and enthusiasm for the ERP instance throughout your company. When you leverage the principles of continuous improvement in your ERP implementation, you will find that every project runs smoother and becomes effective much faster.
Improve with Analytics
The core of continuous improvement is realistic self-reflection and a consistent review of business processes. Then, you remodel and improve those processes as necessary. A well-implemented ERP system will give you the tools and wide-ranging statistical context that will allow you to connect actions with concrete results on your shop floor and set performance metrics based on concrete data. Then, you’ll have concrete results that you can act on to analyze and make improvements. Once you do begin to make those small, daily improvements, your ERP will be able to reveal how changes in your actions influence the end result in your efficiency and product.
Business process modeling isn’t just something you do one time right before a software implementation—it should be a constant endeavor. How can your organization make improvements? Is there a production line that can be made more efficient, or a frequent backup in your inventory during certain seasons? By linking your goals for continuous improvement with a solid business process management strategy, you’ll find that the information and capability that enterprise software provides can be a vital conduit to true continuous improvement.
A Job for Everyone
No one knows your business better than your employees. Top-level executives may think they can describe all of your operations and processes right down to the last detail, but they inevitably can’t. They just aren’t involved in the day-to-day detail of every single role within your company. That’s why it’s critical that you hand over the task of continuous improvement with ERP to all of your employees as well. If they are trained on all the functionalities of your system, your employees will be more likely to notice and understand failing processes or areas that need some improvement before they become big problems on a larger scale and affect even more team members and departments. Good training and change management will have employees using the system successfully, and they will become a crucial foundation for continuous improvement with ERP software.
Is your business just "getting by," rushing to make significant changes only when they become absolutely necessary? This method could be more damaging than you think. While those great bursts of improvement are monumentally satisfying, you should also aim to improve in some way at every opportunity, so that your business becomes increasingly powerful. Instead of throwing tons of money at an unexpected problem or sudden change, leverage your ERP solution for continuous improvement strategies that will be easier on your employees and on your wallet.
To get advice on continuous improvement within your business and how enterprise software can help, contact an expert at Datix today. We're an Epicor Platinum Partner that has helped businesses of all shapes and sizes adhere to lean principles, reduce waste and drive revenue. Furthermore, we developed continuous improvement plans (CIP) to provide you with an array of enterprise software services, ranging from server monitoring to customizations, to ensure your ERP system grows with your business. Our premier consultants will help you protect and strengthen your software solutions well past go-live!