Implementing a new Enterprise Resource Planning (ERP) system represents a significant investment in time, resources, and strategic planning for any manufacturing company. This complex process is filled with potential pitfalls that can undermine the project’s success, leading to costly overruns, operational disruptions, and missed opportunities for improvement.
Understanding and addressing these mistakes is crucial for ensuring a smooth transition to a new ERP system and unlocking its full potential to transform business operations.
The common manufacturing ERP implementation mistakes include:
- Not understanding your mode of manufacturing.
- The ERP system was customized before you fully understood it.
- You didn’t take the ERP seriously.
- You did not put the right people on the project.
- You set arbitrary dates and deadlines.
- There was a lack of executive representation.
By recognizing and proactively addressing these common mistakes, manufacturing companies can navigate the complexities of ERP implementation more effectively, ensuring a smoother transition and a stronger foundation for leveraging ERP to drive business improvement and competitiveness.
1. You Don’t Understand Your Mode of Manufacturing
There are 8 core modes of manufacturing. Understanding which mode your company falls in is crucial for having a smooth ERP implementation. These modes are defined as the styles of manufacturing processes and supply chain processes that drive the ERP system. Your mode of manufacturing helps to define the parts of the ERP system that you need to be using.
There are a few reasons that not understanding your mode is a common manufacturing ERP implementation mistake:
- The consultants didn’t have enough experience in your vertical.
- Staff brought ideas from previous implementations that worked well at their previous jobs, but don’t lend well to your mode(s) of manufacturing.
- No one considered the best practices for your mode(s) of manufacturing.
Make sure to learn the modes of manufacturing before you start to implement your ERP system.
2. The ERP System Was Customized Before You Learned the System
Another reason that manufacturing ERP implementations fail is when more time is spent in customizing the solution than learning the system. This usually happens when your team second guesses the ERP that you move forward with.
Keep in mind, most mid-market ERP systems have a lot of practice. As an example, Microsoft Dynamics 365 Business Central has over 130,000 total customers, and growing. Not all of those customers are in manufacturing but enough are that all of the bugs have been worked out.
Thinking that your business is more unique than your competitors can be the Achilles heel of your implementation if you think that you need to customize your way out of the standard best practices for manufacturing implementations.
3. The ERP Was Not Taken Seriously
When the ERP is not taken seriously by you or your team, this is a huge red flag and a mistake that you can easily avoid.
Implementing an ERP is crucial for your business’s efficiency and growth. However, not taking the implementation process seriously is a big mistake that many people make. This lack of commitment can lead to cutting corners, insufficient planning, and inadequate training, ultimately risking the project’s success and wasting valuable resources.
A poorly executed ERP system can disrupt operations, lead to inaccurate data, and result in low user adoption, negatively affecting your ability to function and grow. Remember, an ERP is not just another piece of software; it’s a strategic investment that can transform your business processes, improve decision-making, and drive growth.
To avoid this mistake, it’s important to recognize the ERP project’s importance. Make sure there is full engagement from both workplace leaders and the team, allocate the necessary resources, and commit the time needed for a successful implementation.
4. You Did Not Put the Right People on the Project
If you had the wrong team or selected too many people for the project can cause problems with your ERP implementation. Junior staff implementing the business transformational portions of the project can often be a big problem. This can often go hand-in-hand with the cutting costs and cutting corners or when the project is not taken seriously.
The other side of this problem is when you have too many people involved on the project. This is when you have too many cooks in the kitchen. The problem with this is that it gets more difficult to have the entire team agree on the approach. Having the wrong people or too many people on the project is a bad sign.
For a smoother implementation, the line managers should be involved and help control the decisions for their department(s).
5. You Set Arbitrary Dates and Deadlines
Setting arbitrary deadlines for an ERP system’s implementation can lead to many issues. When managers or business owners push for a fixed launch date without considering the project’s readiness, it not only puts pressure on the team but also jeopardizes the system’s success.
An ERP system can greatly improve or disrupt your business operations. Rushing the launch can cause problems like system bugs, operational hiccups, and employee frustration due to insufficient training and preparation. Essentially, trying to go live “ready or not” overlooks the need for the ERP to be fully integrated and aligned with your business processes.
Rather than sticking to rigid deadlines, a better approach is to be flexible and focus on achieving key milestones. This means:
- Setting realistic timelines based on the project scope, complexity, and the team’s capacity.
- Engaging in thorough planning and preparation, including detailed requirements gathering, process mapping, and user training.
- Conducting regular progress reviews to assess readiness and adjust timelines as necessary.
- Ensuring clear communication across all levels of the organization about the importance of flexibility and the reasons for any adjustments to the timeline.
Adopting a milestone-driven strategy helps prevent the pitfalls of rushing your ERP implementation, leading to a smoother transition and more effective system integration. This method reduces risks and enhances the benefits your ERP system brings to your business.
6. Lack of Executive Representation
Similar to taking the project seriously, having a lack of an executive representation from upper management is another big manufacturing ERP implementation mistake. This is also why line managers should be involved in the project.
Not having upper management or someone from the executive team is a critical mistake in ERP implementation for manufacturing. Executive sponsors are key for providing direction, resources, and overcoming challenges. Without this leadership, the project may lack alignment with business goals and fail to engage the project team effectively.
An imbalance between attending to daily business operations and focusing on the ERP project can further complicate implementation.
To avoid these pitfalls:
- Select a committed executive sponsor from upper management who can lead with vision and authority.
- Ensure active involvement from this person to underline the project’s significance and maintain strategic focus.
- Balance daily operations with project demands, avoiding neglect of either area.
- Promote a culture of ownership across all levels, reinforcing the ERP system’s role for future success.
By securing executive representation and balancing the demands of the ERP project with day-to-day business needs, companies can significantly increase their chances of a successful ERP implementation. This approach not only motivates the entire team but also aligns the project more closely with the goals of the business, ensuring a more effective outcome.
Closing Thoughts
At Sabre Limited, we are experts in manufacturing. We stand among the best manufacturing with Dynamics 365 BC implementation partners across North America. What sets us apart from our competitors is that we use fixed fees instead of time and material billing and we always put the customer first.
Our areas of expertise include:
- Production Manufacturing
- Job Shop Manufacturing
- Engineer-To-Order / Custom Manufacturing
- Project Manufacturing
- Architectural Manufacturing
- Industrial Equipment Manufacturing
If you’re interested in learning more about what Sabre Limited can offer, we’ve been dedicated to helping small to medium-sized manufacturers learn and adopt Business Central. Reach out, and let’s explore how we can contribute to the success of your manufacturing journey. Contact us at info@sabrelimited.com or call (519) 585-7524. We look forward to hearing from you.
