Posts Tagged ‘Complexity’
The High Cost of Change for ERP
ERP (Enterprise Resource Planning) systems are expensive to build, implement, and maintain. A new study commissioned by CFO Research Services focuses on the maintenance cost of ERP. Maintenance contracts rule of thumb often run from 10% to 20 % of the purchase price of equipment or software, so doing your due diligence right is imperative from the start. There are plenty of gotcha’s after the fact.
The full study is available here
There is always going to be a need for an information system to drive data and information to the factory floor but my personal feeling is that there needs to be a balance in information flow; not just driven from the top down, but the bottom up. The bottom up approach has more power as a pull system. A system has to be focused around the point where the money is made. It’s about throughput. Money is not made in the Accounting department, they are the scorekeepers who tell you if you are making money. A Plant Manager I knew used to say “if the machines are running – we’re making money”
ERP Systems are descendents of accounting systems that have been adapted to the factory floor. Think of the “square peg in a round hole” analogy. It’s been adapted by the need to report financials at month end.
The natural workflow is from the product. The product is most important to the customer, they could give hoot about your process. Where’s My Product? When is it going to be here? What does my product cost? I want my product to have this feature.
These ERP systems are huge behemoths that are adapted to an existing production process.
Much of the ongoing maintenance cost that you’ll incur is in direct proportion to the amount of customization you have done to fit that square peg into the round hole. When the peg doesn’t quite fit there is customization or exception management – that ultimately leads to bloat-ware.
A newer field of study is providing a different way to look at the problem. Complexity Science is an emerging field of study that has promise in factory floor systems. If you’ve read my blog before you‘ll see I’ve written about Richard Morley and his application of Chaos Theory applied to the production process – with some very interesting business results – and fewer lines of code. Now doesn’t that sound like lower maintenance costs?
Just What the Heck Can a Machine Tool Do?
Adding Flexibility Does Not Have to Mean Adding Complexity; Well…Sort Of.
Microsoft Windows is known for the immense size of the program. When reminded that the Windows program is a behemoth Bill Gates recently commented that “Windows is a big challenge, the amount of hardware that it has to run with, the amount of software… it’s a daunting set of requirements that people have” Charlie Rose Television Program Aired on PBS Monday December 22, 2008. In fact here a link to the show.
http://www.charlierose.com/view/interview/9875
In order to accommodate all of the functionality does it have to become more complex? It’s Kind of a trick question.
If one entity is responsible for all of the “operation” of the system yes that entity will be complex. Now you know about – web based applications – aka – Service oriented Architecture; aka – Software as a service; aka – SaaS, aka – the cloud. Complexity is migrating from the operating system to the network. Devices will be enabled to communicate in the space we call the internet but these devices don’t have to have the level of a behemoth operating system.
Thinking about a Factory, it really makes sense. There have been 20 plus years of centralized control. A virtual alphabet soup of “solutions”; MRP (Materials Requirement Planning), ERP (Enterprise Resource Planning) The future of Information Technology on the factory floor is in making the assets integrated into the network. Make the Factory one big machine.
Think about it.
