Procedural Inertia and ERP

I belong to APICS, the Association for Operations Management.   This is a professional organization which not only focuses on excellence in supply chain planning, but also in sales, operations, lean processes, and quality improvement. I’ve found that dinner meetings and the website resources always afford plenty of opportunities to learn, basically, about how to do things better.

One article on the web and in the bi-monthly magazine really caught my attention as it related to business processes and ERP systems, of which I am deeply involved as a consultant.

The author, Craig Schrotter, wrote that what can easily happen in an organization, in any kind of process, is what could be called “procedural inertia.”   [Schrotter, Craig, “The Trap of Procedural Inertia”, APICS Magazine, July/August 2013]

He stated that this “procedural inertia” follows circular logic and can therefore be difficult to recognize.   Organizations create procedures to handle, for example, the movement of inventory within the firm, and out the door to customers. These procedures often directly relate to the use of a firm’s ERP software solution and the processes developed are often mapped directly to steps a user would take in their software system.   However, a breakdown can occur and result in multiple steps and workarounds in the software that take on a life of their own resulting in inaccuracy and in inefficiency (you can download his full whitepaper on the topic at http://www.profitkey.com/wp-content/uploads/2013/05/The-Trap-of-Procedural-Inertia.pdf).

Schrotter cites, for example, the following steps that could happen in a business process such as finalizing a work order to receive finished goods into a certain bin in finished goods inventory.   The question is asked: “What if there is a misunderstanding about how the ERP system works?”  If a transfer of inventory into the proper bin could be performed without proper work order closeout, then work orders would be left open and their costing unprocessed. To address the gap, a new procedure might be written to filter on a report, find a list of all unprocessed work orders and manually close out each one. Then, a spreadsheet might be prepared and used to analyze the costs. Manual ledger entries might then be prepared to update the costs correctly.   Things might snowball, going from taking one staff member down a rabbit hole a couple extra hours per week, to something that morphs into an FTE position doing analysis and entries.

This is just one example the writer had probably seen in his experience, and is perhaps an extreme example, not necessarily indicative of what is going on in your organization.   Or is it? Can you think of business process steps and analysis that have arisen from a gap or misunderstanding of how your software system operates?

This can also apply to our personal situations, where inertia keeps us from streamlining some of the mundane things we have to do every month. I know for me, a new year’s goal must be to get personal forms, bills, documents, handling of my kids’ college expense, etc., up into the cloud to be accessed by Office apps across multiple devices and multiple users.

In the APICS magazine article, the author concludes his story with a new materials manager joining the company, finding the workarounds, and calling the ERP consultant in.   The consultant saves the day by pointing out how the firm should set up and use the system properly.

I don’t know if you look at your ERP and CRM consultants as knights that could ride in on a horse and save the day by doing training, and pointing out a simple correction that can save hours of times and manual analysis, avoiding workarounds. That sounds too good to be true and probably is, but maybe we’ve got some tools or experience with our clients where we’ve seen something we could help point you to. That’s what we’re here for.

And remember, some of the new features in Dynamics SL, GP, NAV, CRM, etc., may also prove valuable to your organization:   Learn about recent product enhancements from Microsoft Dynamics ERP!

Comments

  1. Reblogged this on smay772.

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