DID YOU WIN ?byBrian Willcox CFPIM of Action MRPII |
| Picture the scene. Three years ago it was decided that for your company to stay competitive or to even stay in business it had better get its act together. The solution was to implement MRPII. The software and hardware salesmen sold you the benefits. The consultants were all lined up to help you get there. The education and training people told you to spend as much on training as on software. You picked up a feeling that you were taking a major step into the unknown. |
| You did a justification and made the decision to go ahead. You bought hardware and software, you read the books on implementing MRPII, sent the production control manager on a couple of courses, and got on with the job. It worked up to a point. |
| The question is, now the system has been running for a year, have you obtained the benefits you used to justify the decision to go ahead? Is it a success, which to me means that it is effective, people use it in the daily running of the business, and management not only get involved but drive the business with it. The problem many companies have is trying to answer that question truthfully. |
| In my previous article on the implementation steps, I said that the last task of the project team was the post implementation audit. "Once the system is up and running, one needs to know if it is achieving its objectives. Certain savings and reductions were used to justify the project, so it should be checked that they have been obtained. If not, the project team need to put together an action plan to ensure the targets are met." Easy to say but what is a post implementation audit? It was originally started by the Oliver Wight Associates who introduced us to the "ABCD check list". It was a list of 25 questions to see if the modules of the software were in use and if the basic principles were being applied. Depending upon your score, you were classified as either an A B C or D user. |
| The D class user
is one which has the software running on the computer but has not met many
of the basic needs to run the system. They run MRP as an ordering system
once every few weeks.
The C class user is one which uses MRP as a basic ordering system, but the shortage list still sets the priorities. The company has started to obtain some benefits from the system in the form of reduced inventory. The B class user uses the system as a production control tool for both materials planning and for scheduling with some form of shop floor control in place. The shortage list is still the real priority list in the company. Quite substantial benefits are made in inventory reduction and customer service goes up because they are at least starting to make the right things in the right sequence as demanded by the MPS. The A class user is one that
uses the system not only as a production control system, but also is used
by management to run the business. The company executive produces the
production plan, which is handed over to the master scheduler to work out
the detailed plan for the factory. Financial systems, customer order entry
and non-manufacturing modules are all integrated as far as appropriate and
operate as one. In summary the class A user is a company which uses the
total system to run the business. |
| This was certainly a step in the right direction as it made companies aware that there are varying degrees of success. Today, the classifications are almost the same but the criteria used to do the evaluation is much more detailed. The Oliver Wight Associates have now developed a much more comprehensive check list which is used by many consultants and companies to measure how successful an implementation has been. Today the evaluation includes the following functions; the general business, financial accounting and costing, game planning, master production scheduling, demand management, data base management, planning, shop floor control, purchasing and inventory control. |
| As can be seen from the functions covered, the approach is to establish just how the system is being applied to the company, and were the original objectives met. From an evaluation of this type, carried out by an independent person, two results can be obtained; a grading as to the effectiveness and use of the system, and a list of points that need attention with recommendations on how to rectify them. |
| The result of the first point is that the company can advertise their success to the visitors to the company by having the grading certificate on view in the reception area. The company also knows that it still has further to go in its quest for excellence. |
| The second point tells them the areas that need working on if the full benefits of the system are to obtained. |
| Some companies set themselves a target of reaching the various classifications by certain dates and then call outsiders in to tell them if they have done it. That is fine and certainly a step in the right direction, but the audit needs performing on an annual basis as it is so easy to start slipping. This way the company executive team have an evaluation of the progress being made and where potential problems are lurking. The fact the audit is due to be performed often causes people to make the effort to get their act together and get back on target. |
| In summary, the post implementation audit needs to become the annual system audit to identify which functions need to be given the attention that is needed to become and stay a class A user, capable of competing with the rest of the world. |
| October 1997 |
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