There’s some good news for ERP shoppers, especially first-time shoppers:

The ease of implementation has improved; and  
The total cost of ownership has gotten even more competitive

So companies that have avoided ERP systems thus far (or failed on their first implementation) have two excellent reasons for looking at systems again.  And in this new world, the companies that do implement systems will have a serious competitive advantage over those who don’t.  

A quick piece of advice that took many years to learn: shopping for an ERP system for the first time is usually very different than shopping for one the second time.  Second-time shoppers are usually far wiser; they have learned some expensive lessons from their first time around the block.  First-time shoppers tend to fall into one or more of the following seven deadly sins:

1.    Buying the demo.  They buy the glitz and sexiness that have been shown in the demo, without realizing that the system’s design is actually cumbersome and will slow down their day-to-day operations.  It’s sort of like buying a new machine for its feeds and speeds, without realizing that it will have quality issues.

2.    Buying on price.  They look at the purchase price of the software as the major consideration and negotiate that down as far as possible.  They don’t compute total cost of ownership, which includes the people costs and the maintenance and upgrading costs and the expected life span of the software.

3.    Missing the major point of ERP – integration.  ERP looks to the untrained eye like software that does various business functions – inventory management, customer order promising, accounts payable.  However, the power of an ERP system is not in the individual functions – the real power is in the integration of those functions.  The level of integration is much more subtle than features and functions inside a given department software.

4.    Scrimping on education and training.  They ignore education and treat training as an expense to be minimized, then wonder why people have trouble operating the new system.

5.    Assuming that all technologies are created equal.  Since their desktops run Windows, they choose a system that operates on a Windows server.  And besides that, Windows servers are inexpensive (see #2, above).

6.    Thinking that all ERP packages are basically alike.  Sorry.  Some packages that call themselves “ERP” do not have the required functions, or the required integration.  There is a big difference between “interfaced” and “integrated.”  Interfaced means that the module will accept data from another module if and when it arrives, but was designed to operate in a stand-alone manner.  What that means to the user is that they have to manually enter the data into each separate module.  That increases effort, cost and errors.  Integrated means that each module works hand-in-glove with the others.  For example, in an integrated system, a quality reject in Receiving would automatically trigger replanning of replenishments (and an action message to a Master Scheduler), plus automatic notification of Purchasing so they can start working with the supplier, as well as supporting the quality process (e.g. isolating the parts, tracking the MRB decision process, etc.).  Interfaced systems do not automatically trigger the ancillary processes.

7.    Changing their business processes to meet the software supplier’s model – “best practice.”  While that sounds great in theory, in practice it can cause the implementation to be very difficult, very long, and very expensive.

So what’s the advice I give to first and second time shoppers?  It’s very logical, once you stop to examine it.  Look at ERP as a strategic investment, one which will help the company become more competitive, and then approach the buying decision with that model as the foundation for the decisions.  Your first reaction to that is probably, “Well, duh!”  Mine too.  But… you’d be surprised how many companies give lip service to this idea, then blithely make more and more of the mistakes above.  And the ones that protest the loudest are usually the ones who need the most help later on.

The most successful system selections start by looking at how the company should be running after the software is installed.  Based on that vision, identify those capabilities that your company will be using in the next 5-10 years.  
    
From the list above, there is a subset of functionality that any package must have to call itself ERP:

1.    Full customer information and support, including:

o    Customer information management,
o    Order entry, tracking and fulfillment,
o    Customer billing, and
o    Material allocation

2.    Production and materials, (not just inventory management), including:

o    Shop floor management (work orders and/or Lean releases)
o    Bill of Materials and Routings management
o    Inventory management, both raw materials and WIP

3.    Supply chain, including:

o    Finished goods inventory control,
o    Shipping,
o    Purchasing,
o    E-commerce,

4.    Accounting, including:

o    General ledger
o    Accounts payable
o    Accounts receivable
o    Costing

5.    Executive decision support, including:

o    Business Intelligence – measuring the health of your business
o    Dashboard,
o    Report writer (easy to use!)
o    Spreadsheet integration

The systems selection process below will avoid the seven deadly sins.

1.    Scrutinize the demo.  It’s nice to be entertained, and good demo professionals are truly expert at their craft.  But watch the number of screens and the number of keystrokes to accomplish routine tasks, like entering an order, or running a report, or making a decision.  During one demo, I had the audacity to count, aloud, the number of screens required to enter a routine order.  How many?  6!  And this was for a client that received many, many orders, almost all of which were very simple.  Ask where the data on the screen comes from and how it gets maintained.
Realize that demo staff will disappear; you’ll have to make the system work yourselves.  So call references; find out from other companies how the package really works.  Find out how well the system operates in real companies, and how closely the demo fits actual operation.  Find out how responsive and how capable the technical support people are.  

2.    Compute total cost of ownership.  That includes

a.    purchase price of the software,
b.    purchase price of servers and other hardware,
c.    software and hardware maintenance and upgrades over 5-10 years,
d.    education and training,
e.    implementation, including consulting, data conversion, etc., etc.

Once that is done, compute the ROI on your entire investment.  If package “A” has a lower initial purchase price, but takes six months longer to implement (and therefore forgoes 6 months of the financial benefits of the new system), that should be plain for everyone to see.

3.    Scrutinize the level of integration in the packages.  The “magic” of ERP, the place where it adds value to a company, is not as much in the strength of its individual functions, but in the integration of those functions, so that the business ramifications of all data anywhere in the company are promptly and accurately reflected throughout the company.  For example, when an inbound shipment gets delayed, an ERP system will let you know which customer orders will be affected.  It will not, however, call the customers – that’s still up to the sales team.  And as those customer orders get rescheduled, an ERP system can let you see the impact on your financials for the month.

4.    Determine the optimum investment in education and training and support for the company to use the system effectively.  The old saying, “If you think education is expensive, try ignorance,” applies here.  One of the most common causes that ERP systems fail to achieve their potential ROI is underinvestment in education and training, especially in first-time users.  The intent here should be to invest the amount in education and training which will maximize the ROI on your total investment, rather than looking at education and training as an expense to me minimized.  First-time users need both education and training.  Education helps people throughout the company understand how ERP works and how it will integrate their information and support superior decision-making.  Training shows each individual user how to use the functions and screens and reports that pertain to their particular job.  All people should be educated on the system overview and fundamentals, then each person should be trained on their specific function.

5.    Investigate the reliability, ease of use, and total cost of ownership of the server platform.  Not all systems are created equal.  Windows-based servers are the most common platform for small manufacturers.  And they have their strengths, including affordability, and the thousands of applications available for them.  However, they also have several drawbacks, including downtime (frequently due to software), complexity, security, threat of viruses, and potential cost and difficulty of expansion.  Windows-based systems lack a built-in database, companies typically deploy an additional server for each additional workload in a Windows environment, but the actual utilization of those servers is a paltry 4%.  By contrast, utilization of UNIX servers is 19%, and utilization of IBM System i-series servers is 41% (and that’s important – that means lower server cost).  And only the IBM solution includes database, workload balancing, and web server software.

6.    Insure that the package has the capability to support your business operation for the next 5-10 years.  This point was covered in the ellipse diagram, above.  Flexibility and ease of changing business models is the key, because businesses themselves must change or face extinction.  The supporting software must likewise change (and do so gracefully and easily), or it becomes a competitive disadvantage!

7.    Select “Best-of-Breed” software which adapts to your company’s traditions, rather than forcing you to change your processes to fit the software design.  Most software is designed around “best practice”, and while that’s good, at least in theory, it can become a major stumbling block during implementation.  Look for “plug-and-go” software.  Look for software that improves your people’s efficiency and effectiveness, that helps them do their job better and make better decisions.  That’s what ERP is all about – that’s where the money actually comes from in the ROI.  

There are several packages that meet these criteria.  One supplier that has stood the test of time and is still nimble, innovative, and agile is Xperia Solutions, based in Allentown, Pennsylvania.  It runs on the IBM i-series server.  And it is highly competitive financially: one manufacturer acquired a 10-seat license for Xperia Solutions’ full ERP system and an IBM i-series server for less than $1900 per month for 36 months.  When compared to the improvement in operating effectiveness that the company should achieve, that is a very modest investment indeed.

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Trust, like love, is an abstraction. It means many things to different people. And, like love, you can only know it when you have it.

So what does it take to develop a culture of trust at work?  Every company puts the desire for more trust on their wish list.  The “how to” demands a complex, multifaceted strategy with a foundation based on telling the truth.  While telling the truth sounds like a no-brainer, it is shocking how hard it is to do.  It is also disappointing how ill prepared even the most sophisticated executive is to create a work climate where it is safe enough to tell hard truths that ultimately lead to a workplace culture of trust.

Let’s start with the givens:

Team interaction and collaboration constantly clash with the older model of hierarchy and silo mentality.  We are still marching out of generations of “my way or the highway” thinking “Looking out for #1” is still imbedded in our personal perspectives as we strive to be part of a team.  There is still uncertainty for leaders to know what to do and what are the exact parameters of teaming. If only there were a cookbook!

Research on team development helps put things into perspective.  The concepts of forming, storming, norming and performing have been studied for decades.  We have observed that high functioning teams are able to optimize performance and sustain cohesiveness through difficult periods with a variation of that schema.  As in the original model, forming is, of course, the first step.  Gathering the members of the team and creating a vision is critical.  It is second phase storming, in our model, that gets priority focus.  This is a carefully monitored stage that is given lots of room.  For, if this stage is shut down too quickly- usually because the leader is uncomfortable with conflict- truth is distilled and trust is never developed.  This stage is where individual patterns of behavior clash with each other and, unless there is room to observe and understand why we push each other’s buttons, talk about communication styles and gain insights into better ways of relating there is no possibility for deeper trust to evolve.  It is in the storming phase that we all make adjustments for a smoother functioning larger system.  While in the storming phase we also agree to norms so that conflict does not destroy either the vision or relationships.

The third stage, for us, is performing.  This is where people find their stride and can accept their role and the role of others on the team.  This is the place where listening skills are honed and the art of honest feedback and acknowledgement are practiced.  A lot of work gets done, strategies are finely tuned and energy is high.

What we have added to the team development model is the fourth area, transformation.  We believe performance is not the end point.  What matters more is how the team handles times that are difficult or when there is sudden change.  That is when the rubber meets the road.  It is when if the best of times becomes the worst of times that there can be a quick turn around again into the best of times.

 In this case study an American VP of Engineering in the cement and minerals industry, part of a global conglomerate based in Denmark, caught the vision of how his team could become state of the art in collaboration, productivity and profitability.  This meant beating out the competition through cost effectiveness and fast turn around from point of sale to completed project.

Challenges

• Engineers designing the equipment worked in silo-mentality and did not communicate with each other or the sales department.
• Performance measurement was not aligned around final product, rather it was related to individual tasks and therefore not an accurate reflection of overall effectiveness.
• There were concerns about not being able to meet the customer needs in a cost-effective and timely fashion.
• Various engineers from electrical, mechanical and project did not communicate needs and concerns with each other while projects were in design phase.
• Competitors were more cost effective.
• VP of engineering had the vision for what was needed yet lacked the buy-in from his team.

Solution

VP of Engineering completed the CEO executive education course, Total Leadership Connections™ (TLC), where he took his engineering understanding of systems thinking into learning about human systems.  He gained skills in team development, relationship building, identification of patterns in the workplace, conflict mastery and coping with change so he could effectively lead his team to a transformed stage of performance.  He learned how to build trust through telling the truth with respect and free the organization to collaborate effectively, be productive, profitable and develop a culture of accountability.  His next challenge was gaining the buy-in and support from his team to institute this new way of work. 

Process

A 2 ½ day team off-site was set up so that the VP could gain the support he needed to move past the silo thinking to a collaborative one.

Pre-calls with the nine members of his senior team and the VP of engineering were conducted by the CEO lead facilitator to explore current challenges and outcomes they desired from the off-site.  The following objectives were presented:

• Develop an environment of openness, understanding and healthy communication
• Explore organizational, team and personal challenges
• Create new ways of solving problems
• Learn to observe patterns of behavior in yourself and others.
• Develop a clear strategy to implement the vision  

At the off-site the team revisited the objectives and streamlined objectives for what they wanted to accomplish during the retreat:

 Clarity and alignment of vision and deliver the vision successfully

• Be happier coming to work
• Reframing negativity
• Improve team communications
• Understanding of inclusion/exclusion
• Strategy for implementing vision

 Facilitated discussion initially focused on:

• What are the most significant challenges/issues facing the company today?
• What are the most significant challenges/issues facing your team today?

Team members quickly came forth with previously unspoken issues that were holding the company back, specifically on the clarity of roles on the team.  They willingly explored conflict and gained skills to face conflict openly to improve work relationships and communication thus creating an environment of accountability and trust.

In the initial forming stage the leadership team spent time discussing realignment of roles.  This group had to give up long held beliefs about winners and losers, about speaking out or avoiding conflict, about what was best for the team, the company or what was best for oneself.

Once the stage was set and there was agreement around job realignment, the group moved into the storming stage.  Differences of opinion surfaced.  Telling the truth is never easy and when power or perceived power is at stake, cards are played close to the chest.  There is a natural desire to move to decision quickly and alleviate the discomfort.  Again, this storming stage is key to a strong foundation for performance.

Finally Steve, a well respected manager spoke his truth.  He wanted to step down from his position.  He was willing to take a more hands on role and leave the task of leading to others.  Without, to many details he spoke of pressures at home and a desire to spend more time with his family.  He said “I would never have taken this risk if the discussion in the room were not so opened and honest.  I didn’t come here consciously ready to change my job, yet I know it will be better for me and better for the team.”  He talked about his concern with letting his boss, team members, and the company down.  Steve did not talk from anger or fear; he talked with relief, letting the truth out.

The room was silent.  This was different.  People fought for more power not less.  Some acknowledged Steve, some remained silent, other wanted to him to change his mind.  By the end of the retreat the group had a succession plan in place.  And, the agreement was to give Steve time to make sure this was his long term decision.  The doors to truth had been opened and progress was made on many strategic levels.

Results of the two-day retreat

By the end of the retreat, team members were much clearer about their roles. They had learned to ask for and how to give support (coaching and mentoring), the clarified vision gave way to an action plan.  Communication was improved and members were able to handle conflict in the team and quickly move to conflict mastery.  Steve received coaching and gained even more confidence that his choice was right.  he began to feel better physically and his family relationships started to improve. One month after the retreat Steve handed his responsibilities to Sean. While Steve is no longer on the leadership team he is an active supporter of the group process and a continued help to Sean.  The doors to truth had been opened and progress was made on many strategic levels.

Results at Six-month mark

Due to issues raised during the two-day retreat the team was further restructured getting more people in the right roles for team effectiveness the team saw Steve, no longer on the senior team still making an important contribution and they saw he was please with the change.  Additional roles and staff were added allowing cost effective use of time thus cutting the cost of production.  Team members were clear on their roles and felt secure in their jobs.  Team members accepted the idea of outsourcing globally, which was cost-effective and time-effective allowing for more volume and higher profit for the company.  They had been resistant to this out of fear of losing their jobs.   They no longer dreaded going to work for fear they would be replaced.  Cross-training of functions occurred decreasing the silo-mentality and the team began working at a performing stage of team development.  While the stages of development overlap the performing stage clearly had less conflict and the conflict than shows up is neither as intense nor time consuming.

Results at One-year mark

This team has moved to a transformed stage of team development as members of have attended the CEO leadership development program, Total Leadership Connections™ (TLC).  Coaching with team members occurs and has supported the team in handling crises, change and conflict.  Team members have developed deep relationship and are now able to communicate effectively and are working in a culture of inclusion, trust and accountability with strong communication and conflict resolution skills.  They have weathered and adapted to a change in leadership at the level above the VP of Engineering. 

This team is clear on their vision of “mobilizing our resources to benefit the customer in a more efficient manner”. 

Conclusion

When a team is working at a transformed stage they will handle crisis and conflict at a fast pace thus impacting a strong bottom line.

Through becoming pattern aware leaders a culture of truth and trust becomes the environment of effective team work.

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Meals and Banquets are excellent opportunities opportunity to discuss business topics and to introduce new initiatives with your Chinese counterparts.  The following are some tips that will enhance your success at these events.

     -Learn to use chopsticks
     -Wait for your host to seat you; it is considered unacceptable to position yourself at a table
     -Leave some food on your plate; otherwise it will be refilled by your host

     -Take part in all “Ghan Bai” (Dry Cup) toasts

     -Chinese meals contain many courses, always leave room for more

     -Birds and fish are served with the head, expect this

     -Avoid inserting your chopsticks in your rice and leaving them there, this signifies death

     -These table behaviors are acceptable in China

• Using a toothpick at the table
• Spitting bones on a plate
• Making noises while eating
• Putting elbows on table
• Reaching across the table for food
• Smoking during a meal
• Picking up a bowl of rice to one’s mouth

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Dynamic weighing determines refuse weight, as the containers are being lifted and dumped. It doesn’t require settling time as is common with truck body absolute scales.  

Vibration during the weigh cycle introduces error. Proper software & hardware averaging and filtering techniques can significantly reduce the effect on results. 

Electrical noise during the weigh cycle introduces error. It can be significantly reduced by proper use of shielding, grounding and software and hardware filtering. Special consideration was given to the design of each component to make it less susceptible to signal drift caused by noise  

Acceleration (elevator effects) during the dynamic weighing cycle introduces error. It can be significantly reduced by dynamic calibration techniques that “teach” the On-Board computer the dynamics of the individual lifter mechanism. 

Creep: Whenever sensors are installed on a structure, the complete assembly must be cycled 30 or 40 times to reduce the residual stress induced from installation. This is necessary before the calibration procedure is performed because residual stress will affect the accuracy of the calibration curve. Resolution of the system is typically in the micro-inch range.

Deformation: The truck structure and lifting mechanism are all part of the weighing system. This system evaluates extremely small signal changes due to strain. You can’t afford to loose signal due to system deformation. A flexible system will not sense these changes. Accurate weighing measurements require that all of the load path go through the load cells, not be absorbed by material deflections. As an example, a typical 33000 lb. doubled ended shear beam load cell deflects .005 inch at full scale, which relates to 15 micro-inches of strain per pound.   

Leveling of the vehicle during weighing is often impractical yet it can introduce serious weighing errors. Sensors and software can be installed to compensate for weighing “non-leveled” vehicles. The inclinometer developed has been approved by OIML for +\- 9% grade in all directions. 

Side to side load shift: this causes an error when more than one sensor is being used. The error is due to the computer using a calibration curve that was developed with the weight at a specific location in the container and usually assumes equal distribution of weight at the load cells. This is not the case with a side-shifted load. Although, we have found that this error is small, it must be taken into account for certified systems. When this situation arises, the computer looks in two different places on the calibration table to make a correction. Looking in two different places yields values for two different lifting speeds! The magnitude of this error depends upon the dynamics and geometry of the lifter.  

Monopole forces, significance of: these are forces (impulses) that occur in a single direction and are not cancelled out by standard filters (hardware or software). In many instances, these effects are caused by system binding (friction), as the lifting mechanism is moving. They cause the “weight” to be continuously high or low. This is a clue to have the lifting mechanism reviewed.  

Front to back load shift:  this causes an error due to different forces at the sensors due to different applied moments. The error is many times larger for short lifters such as those used in rear and side loaders, than in front loaders with “long arms”. A meter of shift on a front loader represents perhaps a 20 % error, the arms being about 5 meters long. The same meter of shift represents a 100 % error in side and rear loaders since those mechanisms are only about 1 meter long. This type of error can be corrected but at present it is expensive. More sensors have to be added and additional calibration curves have to be created. We have been researching this problem looking for methods that are economical and practical but still yield good accuracy. 

Non-linearity in the lifters: lifting mechanisms have non-linearities due to geometry, materials and hydraulic response at broad ranged loads. This can result in weighing errors. The On-Board smart scales “learn” about the non-linearities during calibration and correct for them during actual weighing. Zero tracking and annual recalibration is encouraged to maintain accuracy, since all components wear with age and use.

Impact of calibration techniques:  A scale is only as good as its calibration. Dynamic scales are only as good as the techniques used to calibrate them. A scale which ignores side to side error in its calibration technique will still yield “good” accuracy over all, because there aren’t that many instances when the refuse being lifted is heavily shifted to one side. 

Temperature compensation: dealing with microvolt and sub microvolt signals:

The most common and reliable sensors available are resistive (full-bridge type) load cells. These sensors have stood the test of time. They are economical, reliable, and accurate. But they have a dark side. They output a very small signal … typically 10 to 20 milli-volts at full load. If 20 mv represents 20,000 lbs then 1 microvolt represents 1 lb! Customers would like to have 1lb resolution in a 20,000 lb truck scale, and that means that we must deal with microvolt DC signals. Temperature raises havoc with commercially available electronics at these very low voltages. Special precaution must be taken with regard to shielding and grounding. These scales are “software engineered” such that temperature drifts are nulled out, unknowingly, by the manner in which the scale must be operated. This works well in non-certified systems. For certified systems more stringent methods must be applied. The analog to digital converters (smart sensors) are cycled through a temperature chamber and the internal microcomputer “learns” what correction is necessary at 15 temperatures throughout the OIML range. The resolution of these smart sensors is 1 part in 32,000 counts, which represents 600 nanovolts of signal! For example: 600 nanovolts = 1 A/D count of resolution.

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