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Key Success Factors for Implementing Logistics ERP System

An organization must be closely linked to both supplier and customer to boost up production output and provide faster turnaround and deliveries. The organizations must have effective planning and efficient control systems in all the processes within the organization. Information Technology is one of the critical sources which organizations can apply. Essentially, Enterprise Resource Planning (ERP) is the heart of daily operations of a company and leads to efficient processes. An ERP system enables such sources as workforce, machine and materials needed to produce goods and services in organizations to be used effectively.

Developing Organizational Support

Organizations are often resistant and hesitant to change. Create a strong pillar of support for the new system by explaining to employees at all levels why the change is beneficial. Executives can benefit from the ERP systems to provide support for acquisition growth. Accountants will have the opportunity to cleanse up data and streamline it before periodic adjustments. Logistics operations will have access to accurate and timely production data plus lease operating statements. Having a written and well-defined scope of work can mean the difference between a failed project with terrible results, and a highly successful project with huge benefits. The project scope is the basis for the implementation requirements and the total resources that need to be deployed. Do not skimp on scoping. It is wise to spend the time upfront making sure all process and details is documented and define clear expectations upfront and establish overall goals.

Forming A Well-Rounded Implementation Team

Forming a versatile implementation team is crucial for organizational support and project successfulness. Wide-ranging ERP implementations require a team of project members who are very committed to making the implementation a huge success. These members should have the right skills, strong work ethic and the ability to march the project to completion. Form a team with the ability to drive the project to completion takes this responsibility seriously. A lot of projects fail to go-live because there is no focused effort to do so. ERP implementation team should consist of the experienced employees from across organization at all levels, especially the employees who know the current processes inside and out. When choosing a team that will be responsible for the project’s success, include experienced project managers, business analysts, software architects, and developers.

Setting Appropriate Expectations

To implement an ERP system effectively, business process requirements must be clearly streamlined and laid out. Specific details are vital so processes can be revisited as little as possible. General ideas are subject of uncertainty, which leaves system implementers hanging. This is where the process flows come in handy and make understanding certain requirements smoother. It is crucial to record which steps occur before and after the process from point A to point B, because that heavily affects the process itself. Take time to understand what the process currently looks like and what changes need to be made to make it more efficient with the new implementation. When defining ERP implementation project, set realistic objective and goals. The expectation of the outcome will hardly be met, and the project will be viewed as a failure. The same goes for timeline planning so make sure to plan an appropriate amount of time for the project to be completed.

Planning a Phased Approach

An ERP project is a large undertaking, and it will impact major areas of the business. It may be too much for the businesses to cope if too areas are affected at once. If this happens, staff will be reluctant to let go of the previous system and their familiar ways of work. A phased approach may be a better choice hence try to carve the project up into logical sections. Temporary integrations between the old and new system may be built; however, this is often worth the effort if it means less disruption to the business. Frequently, organizations get into trouble by failing to document key decisions, only to unnecessarily revisit the decisions later. This ultimately results in rework and delays. Most of the time, those affected by these decisions were not involved in the decision-making process. Decisions should be clearly communicated and documented in a data log maintained by the project leader. These decisions should only be revisited when business demand changes require the project team to change course.

Develop a Good Migration Plan

The purpose of a logistics ERP system is to provide accurate, timely, and insightful reporting that helps managers and executives make better business decisions. Clean and accurate data is needed to make the most efficient use out of a system. Without accurate master data list, employees lack confidence in reporting and are tossed back to the drawing board. If critical master data comes from previous system that are not integrated, major errors are more susceptible to occur during data cleaning and validation. It requires experienced oversight and coordination to merge master data, especially when different business functions of the systems being merged. Determine where the data value begins and ends, and only bring over the data that are required to support the business into the future.

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Ling Lee Kien Steven
Ling Lee Kien Steven
Ling Lee Kien Steven has substantive years of experience in the field of logistics and supply chain. He holds the Diploma in Information Technology and the SIPMM Executive Certificate in Inventory Management. Steven is a member of Singapore Institute of Purchasing and Materials Management (SIPMM). He completed Diploma in Logistics and Supply Management (DLSM) on September 2021 at SIPMM Institute.

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