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How to Nail the ERP Implementation Process

Author: Nick Goellner
Published On: Nov 30, 2023 12:00:00 PM

MC 384 Blog Image

What typically screws up the implementation process? The selection process. In episode #384 of MakingChips, Paul Van Metre shared that they changed their selection process as a result of this particular story: 

They went through several demos with the President of this particular machine shop. It was a thorough process. It was only in hindsight that they realized the president didn’t include any of the shop leadership in any of the process. He lived on the West Coast and the shop he ran was on the East Coast. 

When ProShop had the kickoff meeting for implementation, his team asked “What’s ProShop?” The deal was already signed. Deposits were paid. They had no idea their ERP was getting replaced. It was an uphill battle from there on out. It was awful.

Now, ProShop makes sure that the head of manufacturing, quality control, customer service—and any other relevant department—is represented in the process. Everyone should be excited and bought in.

Choose a system that works for the whole shop

ERPs have a strong financial component, so the accounting department and CFO often lead the search for an ERP. That’s why many companies choose an accounting-centric system with poor functionality for manufacturing. 

But at the end of the day, what do your customers pay you to do? Make quality parts and deliver them on time. They don’t pay you to invoice them, do accounting, or put financials together. 

That being said, you need clean financials. But accounting-based systems are often poor at job-costing, which is incredibly important to a manufacturing company. You need good costing data.

The moral of the story? Don’t let any one function carry too much weight in the decision-making process.

Use real data and processes in demos

When you’re searching for software, you need to find something that works for your company. Most software companies use slick demos that look great. But once you try using it in your company with your data, it falls flat on its face. 

You need to know how it works in your situation with your parts. If the software company isn’t willing to show you what it could look like in your company, it should be a red flag. If you use your own process and data, you can see how it works in real life and it’s more likely to be aligned to your needs. 

You have to let go of the past

You have to let go of the way you do things today. Many shops have created convoluted workarounds because their ERP systems weren’t doing their jobs. You have to be open and realize what you’re trying to achieve. There is always likely a better way to achieve a result than the way you’re doing it today. 

It’s not uncommon for clients to want to migrate their old database into the new system. It’s a terrible idea. While ProShop doesn’t start from square one, you want to only bring over clean, relevant, and current data. There’s no point in transferring over thousands of part numbers you haven’t made in 10 years or clients/vendors you haven’t worked with in years. You can always import more data later if necessary. Don’t clutter your new system with bad data. 

Many manufacturers also want to bring in their job routers. However, Paul points out that many routers have big gaps that aren’t represented in the ERP. Something doesn’t just go from machining to anodizing to the customer. 

After machining, there’s typically an inspection process. Then it needs to ship to the vendor. When it comes back to you, you do a receiving inspection. Those substeps are left out of most routers. Those steps trigger dashboards and work queues. You have to fill in the gaps. 

ProShop accepted a customer who shouldn't have signed up because they weren’t a good fit. They wanted to customize ProShop to be just like their old system, which is counterintuitive. When they stop trying to make customizations and workarounds and revert to the original settings, they realize that it works as it should. 

Some of ProShop’s best clients and raving fans struggled in the beginning because they were trying to make it like their old systems. 

Overcoming analysis paralysis in the implementation process

Any complicated software will have numerous modules and features. You don’t need to learn the entire system front to back before you hit “go.” 

The most successful clients dive in. They test work orders within a few training sessions. You don’t watch hundreds of hours of video and try to play in the Super Bowl. You have to start small and practice. You’ll make mistakes and it’s part of the process. You have to learn by doing.

You can add in advanced functions as you go after the basics have become muscle memory. When you’re replacing 5–6 different systems with one, start with something simple, such as getting rid of paper travelers. 

What else do you need to know? Learn more in episode #384 of Making Chips.

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