3 steps to standardizing ERP across operational sites

During the last four decades a number of ‘standardization’ models have been subsumed within the manufacturing industry. These models range from early-80’s philosophies, primarily driven by concerns associated with data consistencies across operational nodes, to other models that suggested changes to the way manufacturers viewed differences in processing across sites.

Consequently, the word ‘standardization’ has become part of manufacturing’s collective awareness. However, what started out as a way to identify and overcome subjective differences between efficiency and inefficiency has became a catch-all phrase that sometimes creates more confusion than clarity, particularly when a manager is in the midst of attempting to standardize ERP across operational sites.

Dealing with system divergence

Thankfully, the central characteristics associated with today’s ERP platforms tend to operate on generally consistent systems processes, since nearly all of today’s mid and large-scale resources platforms are based on SQL databases; which themselves tend toward highly-standardized sets of technical rules.

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However, once you begin to consider the user-interface level and beyond, all bets are usually off, since highly-divergent ERP system variants begin to appear between sites. This is often due to the fact that ERP vendors don’t make money on the basis of competing with themselves, but instead sell individual (and highly-subjective) advantages, driven by differences embodied by one competitor or the other. These ‘advantages’ can be great if you work from a single manufacturing site driven by a single computing infrastructure, but what happens if you own and operates multiple sites and disparate ERP platforms? What steps can you take to deal with system divergence?

1. Apply the Theory of Constraints to identify the weakest link

One of the most useful standardization doctrines I’ve ever utilized involves what is referred to as The Theory of Constraints or TOC. In the mid-80’s an Israeli manufacturing engineer named Eli Goldratt postulated TOC, “…as a methodology for identifying the most important limiting factor (i.e. constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.”

While Goldratt was initially concerned with machine-load balancing across one or more automated manufacturing lines, his thinking ultimately lead to more expansive applications including new ways to look at efficiencies associated with change and standards-management driven by TOC’s ‘weakest link’ approach. So, if you are faced with the need to standardize ERP processes throughout a cluster of disparate operational sites, the first step is simple; identify and understand what you cannot do from one site to the other, then work backwards through what you can do. This process will trim and optimize each site’s common capabilities and showcase what will have to be done from an ERP change point of view.

2. Identify critical operational sites and work from there

When an enterprise is facing issues regarding multi-site ERP standardization or the lack thereof, the best thing to do is to start at the locus of the entire operational infrastructure then work outward iteratively.

Until each site is well-understood, and compared with the capabilities of others, you will run the risk of missing a small, but salient, element in the overall chain that could come back to bite the enterprise downstream.

In order to standardize a complete ERP site chain effectively, one must first identify the most critical site then prioritize all other sites in turn until each work center is investigated and documented completely. Until each site is well-understood, and compared with the capabilities of others, you will run the risk of missing a small, but salient, element in the overall chain that could come back to bite the enterprise downstream.

3. Create a standardization checklist

Part of getting an ERP standardization effort going in the right direction involves the use of some of most mundane but critical work processes available; checklists. Since the entire goal of standardizing ERP across multiple sites is establishing a common set of rules and guidelines that lead to the same results across a multi-site infrastructure, one might think that leveraging comprehensive checklists might appear to be quite obvious. However, the truth of it is that many enterprise managers figure that they can control and manage everything involved in a standardization project, when they can’t. If you face a complex standardization effort, developing checklists at every step of the way will ensure that that information is propagated to everyone who is likely to be impacted by the effort. That way, no one will miss the memo, and errors in the process will be reduced accordingly.