ERP Manufacturing in 2009: Expanding Beyond Traditional Boundaries

ERP in Manufacturing 2009
Expanding Beyond Traditional Boundaries
June 2009
Cindy Jutras ERP in Manufacturing 2009: Expanding Beyond Traditional Boundaries Page 2

Executive Summary
Pressures to reduce costs continue to outweigh all other business drivers Research Benchmark impacting Enterprise Resource Planning (ERP) in 2009. ERP has become Aberdeen's Research more than a necessary infrastructure; it is also a strategic weapon in Benchmarks provide an in-streamlining and accelerating business processes - while providing visibility depth and comprehensive look to those processes throughout the enterprise. This year we look beyond into process, procedure, our annual assessment of ERP usage by module and explore the preferences methodologies, and and decisions between point solutions and an end-to-end integrated suite technologies with best practice and assess the overall business value ERP brings to manufacturing. identification and actionable recommendations.
Best-in-Class Performance Aberdeen used five key performance criteria to distinguish Best-in-Class companies. While the implementation of ERP produced a reduction in costs and improvements in scheduling across all companies, Best-in-Class companies achieved significantly better results: . 20% reduction in levels of inventory, with 97% inventory accuracy . 96% manufacturing schedule compliance, and 97% on-time and complete shipments . An average of 3.7 days to close a month "Companies appreciate functionality that will translate Competitive Maturity Assessment into value for money. The Survey results show that the firms enjoying Best-in-Class performance factors influencing the selection shared several common characteristics: [between an integrated suite and a point solution] cannot be . Best-in-Class are 163% more likely to continue to measure the analyzed in isolation. An 'either-return on their ERP investment after it has been achieved or' approach doesn't help. An 'and-and' approach will ensure . 88% of Best-in-Class ERP implementations have the continued an optimal solution and a more commitment and attention of senior management throughout satisfied customers." selection, implementation, and beyond ~ Kumar Iyer, ERP Consultant . Best-in-Class are 145% more likely to implement extensions as and Project Manager, L&T integrated modules of ERP than as separate applications Infotech
Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: . Continue organizational commitment beyond initial implementation . Blend ERP extensions with core ERP modules for an integrated end-to-end solution . Use ROI estimates to cost justify projects; follow up by measuring ROI when projects are complete and continue to measure after goals have been reached
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Table of Contents Executive Summary.......................................................................................................2 Best-in-Class Performance.....................................................................................2 Competitive Maturity Assessment.......................................................................2 Required Actions......................................................................................................2 Chapter One: Benchmarking the Best-in-Class....................................................4 Business Context .....................................................................................................4 The Maturity Class Framework............................................................................6 The Best-in-Class PACE Model ............................................................................7 Best-in-Class Strategies...........................................................................................7 Chapter Two: Benchmarking Requirements for Success.................................11 Competitive Assessment......................................................................................12 Capabilities and Enablers......................................................................................13 Chapter Three: Requi... [download for more]