|
It is particularly tricky to try to fit a generic manufacturing ERP solution into a packaging or printing business. Later in this article we will look specifically at the functional gaps to consider. One may argue that they may be so significant that it is questionable if it can be made to fit at any cost. So not only is total cost of ownership likely to be very high, adversely affecting whether any return on investment can be achieved, but even more significantly, the risk of complete project failure can be very high. Before we move into functional consideration, a brief overview of ERP and its history, can help to understand why most systems are geared toward repetitive manufacturing processes.
By this stage in the enterprise solutions lifecycle, most people are at least somewhat familiar with ERP. In fact most mid to large size organizations are already using an ERP system, or have developed some equivalent types of functional programs on their own. The typical replacement cycle of ERP systems within companies, depending on the industry and source of information, is on average 7-13 years. So it is not surprising that many companies are currently looking to replace outdated technology and/or generic systems with ones that are fully integrated, founded on current, proven, open technology standards and are developed with industry specific processes that already fit their operations. Scalability and flexibility to meet the ongoing, changing needs of their organizations are also common considerations.
ERP systems are the evolution of a technique of planning and controlling manufacturing businesses developed by the American Production and Inventory Control Society (APICS) in the early 1960’s. The concept was originally termed material requirements planning (MRP) because of the technique’s focus on material planning and procurement. The technique continued to be developed (in US consultancy, the Oliver Wight organization was particularly noted in the field), and by the early 80’s, the term MRP II came into use as the concept was extended to encompass high-level capacity planning. MRP became manufacturing resource planning and the ‘II’ was added to distinguish it from the previous definition. ERP is simply an updated term for MRP II, introduced by software marketing in the mid-90’s to update the concept.
Functionally, the current product offerings in this area are similar to IBM’s mid-70’s MAPICS system, an early pioneer in the sector. These products are principally focused on manufacturers who assemble a range of standard finished products from a large quantity of parts and sub-components. These products can range in complexity from an automobile, which might be comprised of several thousand components, to a personal computer with several hundred. Clearly, for this type of manufacturer, material planning is most important. You can literally stop a production line at a cost of a million dollars an hour for the lack of a ten-cent component.
The starting point for ERP software is to define every single component of the finished product. If you can imagine taking your car apart down to the last screw, you can appreciate how complex this can be. ERP packages use bill of materials (BOM) software to define how the finished product fits together. Maintaining a manufacturing company’s bill of materials is a full-time job for a large department; because every small engineering change or improvement may result in a change to the BOM.
The bill of materials defines which components make up a finished product, but this is only one-half of the manufacturing equation. The manufacturing processes required to produce the product also need to be defined. In ERP systems, this is typically defined in the production routing. The production routing defines the work centers, set up and run times of each operation. By combining the information on the bill of materials with the routing information, it is possible to compute the cost of producing the final product.
The original MRP function is still a key component of ERP systems. It is MRP that works out the required quantity of each component to support the forecast production of the finished product. It can also work out when these components are required. The fundamental challenges for packaging and printing organizations trying to deploy generic ERP systems, is that they are designed to address a set of manufacturing problems that are quite different from the special circumstances of printing and packaging organizations. These differences are best illustrated by looking at a few selected functional areas.
|
