Effective ERP Implementation

By Jon Miller Published on August 29th, 2005

I recently read about a Japanese company called OKI Electronics that went through implementing a new ERP system. They had a few good rules that I thought were quite smart and something I think all of us can learn from.
ERP Implementations – we all hear of nightmares trying to implement them, of work becoming harder once they were implemented, of IT people complaining that no-one tells them what they really want, so they have to keep re-doing heir work. Finally, in order to save time and effort and to meet a deadline, people having to change the way they work to match the system.
People having to change the way they work to match the system. Isn’t there something philosophically wrong with that? If everyone who buys the software has to do their operations the same way, where does the competitive advantage go? That’s a scary thought.
In order to combat this, this company made some rules for Lean ERP implementation:
1. What can be done visually or structurally will not be made part of the computer system. E.g. If scheduling of sub assembly is done by Kanban, then that would not be part of the computer system.
2. The role of the system will be regulated to capture and store necessary data. Data processing must be done in accordance with the IT skill level on the Gemba. (Gemba in this case will mean engineering, sales, shop floor).
3. IT’s role will be the following:
a. Establish guidelines for the downloading of data and ensuring security.
b. Teach the different gemba’s the skills they need to process the data.
Using this they were able to cut the implementation costs dramatically and were also able to shave down their IT department from 7 people to 2. Also they avoided the expense and waste of having IT come up with methods that were either useless or not very helpful to the gemba, since they people that needed the data were coming up with the method of processing it themselves.
You may think that this is a small 100 person company. This is actually for a $6 billion company. Proof that you don’t need an expensive comprehensive system when you “Manage by principles with an eye on the Gemba.”
If you are interseted in visiting this company to learn how they are overcoming these challenges, let me know and we’ll try to organize a benchmarking tour of them in one of our Japan Kaikaku Experience study missions.

Jon Miller

Jon has dedicated his 25+ year career to the field of kaizen, continuous improvement, and lean management. Jon spent the first eighteen years of his life in Japan, then graduated from McGill University with a bachelor’s in linguistics.