ERP Quality Management: Avoiding Delusions

Quality management is a difficult subject matter to wrap your brain around without actually experiencing it. You will learn on the first week of go-live that during the creation of your ERP blueprint, you were delusional – ranging from minor to major - about how the quality system should work. With good intentions, what you blueprinted was the way you wished the world was, not the way it is. If there is good organizational trust, there can be a great deal of positive learning about the way ERP affects the quality management process. If the organization is dysfunctional, ERP quality management can be a nightmare.

Blueprints Can Bite

An easy example is putting a shelf life constraint on a component material. In the comfort of a conference room, it might make perfect sense when asserted – without the benefit of any quantitative data, just the voices of experience - that “we never use a component material more than six months old.” Based on that, every material is configured to have a six-month shelf life, and after six months, the material is quarantined for disposal.

On Day 1 after go live, fifty percent of customer orders could not be assigned a delivery date because there was insufficient component inventory available to open manufacturing work orders. Customer service sends out a broadly distributed email that inventory was loaded incorrectly. Planning forwards this accusation to the ERP implementation team, since clearly the components do physically exist. The implementation team investigates and finds out that a significant amount of material exceeded the shelf life rule, and the ERP system appropriately quarantined them from use. The ERP team communicates this problem back to supply chain. Supply chain, in turn, sends an email to the quality manager explaining the shelf life problem. In the meantime, the vice president of manufacturing is told that “a system bug” is preventing work orders from opening. Before leaving on the first day of go-live, the quality manager sends an email back to supply chain and manufacturing saying that all of the expired shelf life items will be okay to use as is. Nothing is changed in ERP. On Day 2, 65% of customer orders cannot be promised, due to lack of available component materials. The VP of manufacturing is told the ERP implementation team didn’t get the inventory problem fixed. This cycle continues until eventually, someone on the implementation team changes all of the shelf life dates to five years, and the problem magically disappears (as does shelf life control).

It’s not that people are bad or stupid; this is just complicated stuff and it’s hard to understand at first. If you are pursuing ERP quality management, aim for three things (a) avoid adding new control processes at first (b) be brutally honest, and not aspirational, in your ERP blueprint and (c) be prepared to quickly change rules in your ERP. Quality management can help immensely, but only if applied with intelligent discretion.