Page 59 - MetalForming September 2015

The most effective CPO under- stands the complete operation by department and business- process flow. He must be able
to gather and understand functional data, as well as synthesize and analyze reports coming from sales, shopfloor data collection, inventory, accounting, qual- ity and other areas.
Documenting the Current State
With the CPO in place and
driving the ERP selection and implementation project, docu- menting the current state becomes job one. Business processes evolve over time and can pass from one per- son to another with minimal docu- mentation, rather than from a con- scious effort to constantly reexamine and improve processes based on their strategic value. Fortunately, an ERP project provides the perfect opportu- nity to document the current state.
Current-state documentation helps teams determine ways to use best prac- tices built into an ERP system to streamline and improve each process. The BPI team analyzes each process and develops a process flow with the inputs, processes and outputs docu- mented. As a bonus, the process flow becomes an excellent tool for identify- ing process waste.
A shared view of the current state lets the team recognize any problems that exist. Many senior executives might not realize the extent of waste, but once a current-state map visually defines the processes, those issues see the light of day and the “aha” moment occurs.
Time to Educate Business-Process Owners
Many users in a manufacturing company may not be well-versed in current best practices. They know very well, however, their current system or may recall some capabilities from a past position. Once the current state is
reviewed and documented, companies must educate their business-process owners on what is possible with cur- rent, state-of-the-art ERP systems.
Many managers may be tempted to jump over education and head direct- ly for the future state. However, taking time to plan an education curriculum that involves industry analysts and ERP vendors/experts will help a team understand what’s possible and broad- en the team’s perspective on proven best practices. Through this education, the BPI team will begin to identify pos- sible cures to the wasted processes, redundant data, and unnecessary man- ual steps uncovered by the current- state mapping and documentation exercise.
A manufacturing company cannot design or execute a future state without a comprehensive, strategic approach to education.
Ensuring the Rubber Meets the Road
To build the future state, the CPO must lead the charge to develop improved business-process flows. In hands-on workshops, process owners review waste in current processes and discuss best practices and future-state
requirements. They then develop “to- be” maps that, when combined, define the desired, improved future
state. Whiledevelopingtheprocess
improvements,theteamshould evaluate the impact of new processes on business per-
formance in three areas:
1) What can we do today with existing systems? Before implementing an ERP system, what waste can be removed now? 2) What are the strategic midterm improvements that
require IT investments?
3) What functional areas will
improve with a new workflow enabled by a new ERP system?
The Business Case for Change
With a future-state business process designed, the process owner asks, “How does this new business process improve our company?” The answer becomes the basis for the business case for that process.
At this stage, the BPI team discuss- es, analyzes and documents the bene- fits to the business that will be attained with the implementation of each new business process. Implementation costs also should be documented so that a complete ROI can be docu- mented for each BPI. At the end of this phase, the CPO develops a complete list of all BPI projects for the enterprise.
Most critical is linking improved processes to improved performance, with a focus on current-state metrics. For example, if today’s inventory has a certain carrying cost, what’s the impact on these metrics if a new process is put into place? In this way, manage- ment sees how the investment in a new ERP system will reduce inventory costs, reduce stock-outs, improve cycle time, etc.
From the plant floor to the front office, an ERP system can help you work smarter in all functional areas. Plan smartly at the outset of your BPI project as you begin down your road to success. MF
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