Detecting 20/20 enterprise-wide vision
By Rick Bushnell -- Modern Materials Handling, 7/1/1999
In the May issue, I noted that prolonged start-up for a new system seemed to come from a lack of what I call "enablers." One enabler was an enterprise-wide vision and the other enabler was a working knowledge of how bar codes and EDI team up to provide a valid information vision. This column will help you understand if you are having a problem with enterprise-wide vision (EWV).Caution: One person's vision may be very different from another's. Last Spring I spoke with a team evaluating warehouse management systems (WMSs). They appeared to me to include all the right people to provide an enterprise-wide vision. The team included people from warehouse operations, sales, purchasing, finance, and corporate management.
In an effort to demonstrate that I understood the collective wisdom of the team, I commented on how valuable it should be for the group to discuss the different ways that they could each use information from a WMS. Warehouse worker productivity, for example, could be used by operations but also finance could identify the true cost to handle special orders. And (since I was on a roll), I expanded upon that idea, noting how sales could obtain a better grasp of how to set prices and to determine profit from low-profit customers. I then went on to mention how purchasing could easily assess the impact of errors in shipments from suppliers or calculate total procurement expenses by including additional transaction costs from suppliers who don't use EDI.
They looked at me with vague understanding. I could see something was wrong. My first thought was, "Oh well, I did go on a bit long." Then finally one of them spoke up, "No! That's not why we have this team! The boss wants this WMS no matter what!
"Finance will make sure it has a good payback. Sales will find a way to get sales hype out of the new system. The warehouse guy has to be certain that there will not be too many changes for his people to accept. Purchasing is here to make sure we get the best price. And corporate management is on the team so he can explain it, in business terms, to the board of directors."
Oh boy! Did I feel like a dope running on the way I did. But, oh boy, were these guys in for trouble. They didn't have EWV.
In the sidebar I ask 5 questions. Give yourself 4 "vision points" for each "yes" and zero for a "no." For more information, go to the Internet Library at the site, www.isit.com, and use the key words "ERP" and "WMS."
How can you tell if you have vision problems?
. Can finance explain the value of information?
. Can operations see the need to change methods in order to reduce costs?
. Does sales understand the difference between unit cost and total cost, including handling?
. Is purchasing able to negotiate on true and total cost to order, receive, store, and ship?
. Does management understand that technology will only pay when policies and methods are changed?
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