Don't Think ERP Is Just Software

I’ve led a couple of MRP II implementations, and while I don’t consider myself an expert on too many things, I know quite a bit about what is necessary to have a world class ERP implementation. While you need good software, that isn’t the real key. The key is the quality of data the software uses. Bill of materials MUST be 98% accurate or better.

First a definition…accuracy is measured as check 100 items on bill of materials. If the items called for are correct and the quantity is within tolerance (you can usually tolerate an error rate for non-each items of 3%), then the item is correct otherwise it is wrong. More than 2 wrongs out of 100 is a problem. Bill of material accuracy is absolutely critical.

Routing accuracy should be 98%.

Inventory accuracy should be at least 95%.

It is possible to do it yourself IF you have experienced personnel. Otherwise they will need a guide. To be most successful, this probably shouldn’t be viewed as a software installation because real ERP requires a fully concerted effort to coordinate all activities of the organization and most companies never get there. It is too much work.

In the end, they want to get the right part, in the right place, in the right quantity, at the right time and at the right price. That takes a lot of coordination and accuracy. Bad data won’t get it done.

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