BUSI 615 Week 7 Discussion Board 4 thread Example

Discussion Board 4: Implementation of an Integrated Logistics System

BUSI 615 Logistics, Discussion Board 4 (thread)

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The stove manufacturer and its plan are composites standing in for the firm a student would choose; the research cited is real, and the requirements follow Liberty's public course guide for BUSI 615.

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The most important implementation decision for an integrated logistics system may be one that appears on no software checklist: the date. My argument in this thread is that timing and phasing do more to determine whether an implementation succeeds than the choice of vendor. I will use the composite firm from earlier forums, Harlan Ridge Stoveworks, a Pennsylvania stove maker whose shipments peak from September to December, to show what that means in practice.

Why the calendar matters

A new system almost always slows a firm down before it speeds it up. Users learn new screens, data errors surface and processes that worked informally stop working. For Harlan Ridge, a slowdown in October would be a disaster, because most of the year's revenue ships in those months and dealers have no patience for late stoves when the weather turns cold. A slowdown in April, when the plant is building inventory for the coming season and shipments are light, is survivable. The firm should therefore schedule go-live for early spring and treat the summer as the period in which the system must prove itself before the peak.

Markus et al. (2000) give research support for this approach. Studying ERP adopters' problems and outcomes, they found that success depends on when it is measured, that early success is only loosely related to later success and that many problems appearing late had started early but went unnoticed. A firm that judges its implementation on go-live day is grading the easiest part of the test. For a seasonal firm, the real exam is the first peak season, which is why the months between go-live and September need explicit goals.

Four phases with exit tests

I would structure the implementation in four phases, each ending with a test that must be passed before the next begins.

The pilot is the key choice. A big-bang cutover would avoid running two systems at once, which is costly and confusing, but it would expose the whole firm to every error at the same moment. A product-line pilot limits the risk while still testing the integration from order entry to shipment.

The people side

A model from Holland and Light (1999) divides the conditions for ERP success into two groups. The strategic group covers the vision for the business, backing from senior managers, the chosen rollout approach and the plan and schedule; the tactical group covers day-to-day matters such as consulting users, staffing the project well, configuring the software, winning acceptance, monitoring progress, communicating and solving problems as they arise. The distinction helps assign responsibility. Harlan Ridge's owner and plant manager must own the strategic factors: they decide the April date and protect it from pressure to "just get through one more season" on the old system. The tactical factors belong to a project team drawn from the planners, buyers, shipping supervisor and controller who will use the system daily.

Umble et al. (2003) stressed two tactical factors that matter especially in logistics: data accuracy and education. A system that explodes an inaccurate bill of materials or plans against a wrong inventory balance will produce confident nonsense. That is why the preparation phase above spends months on records and why its exit test is an accuracy level rather than a date. Training should also go beyond keystrokes. A planner who understands why the system recommends an order is far more likely to trust it, and to notice when something is wrong, than one who only knows which button to press.

The cutover weekend

The pilot and full cutover each end in a weekend when the old system stops and the new one starts, and most of the risk in an implementation concentrates there. Harlan Ridge should prepare a cutover checklist that lists every data load, who performs it and how it will be verified. Open purchase orders, open dealer orders, inventory balances and warehouse stock all have to move across at the same moment, and each needs a reconciliation: the count of open orders and their total value in the old system must match the new one before anyone enters a transaction. A physical count of finished stoves and of the most expensive components on the Friday before cutover gives a clean starting balance and removes any doubt about whether a later shortage came from the conversion. Finally, the team should agree in advance on a point of no return, the time after which problems will be fixed forward on the new system rather than by reverting to the old one, because a firm that keeps the option of going back tends to use it at the first difficulty.

Measuring the shakedown

Because Markus and colleagues found that early and later success diverge, the shakedown phase needs measures that look ahead to the peak rather than back at go-live. I would track four each week: inventory record accuracy from cycle counts, the share of planned orders that buyers release without manual changes, on-time shipment to dealers and the number of transactions corrected after posting. The second is a useful signal that is easy to overlook. If buyers override most of the system's recommendations, they either distrust the data or the settings are wrong, and either problem will be much more expensive to discover in October.

Lean and MRP together

This week's chapter on lean manufacturing and MRP suggests one more design choice. Not every item needs to be planned by the system in detail. For low-cost, high-volume parts such as fasteners, gaskets and firebrick, Harlan Ridge could use simple two-bin kanban replenishment on the shop floor and let the integrated system handle only the long-lead and expensive items, such as motors, control boards and glass. Fewer planned items means fewer records to clean, fewer messages for planners and a quicker path through the shakedown.

A question for classmates

I recognize that an April date means running the old system through one more peak season while preparation continues, which carries its own risks. Even so, I would accept that risk before I would accept a go-live in the middle of the selling season. For those of you who have been through an implementation, was the go-live date chosen around the business calendar or around the vendor's and consultants' schedule, and what difference did it make?

References

Holland, C. P., & Light, B. (1999). A critical success factors model for ERP implementation. IEEE Software, 16(3), 30-36. https://doi.org/10.1109/52.765784

Markus, M. L., Axline, S., Petrie, D., & Tanis, C. (2000). Learning from adopters' experiences with ERP: Problems encountered and success achieved. Journal of Information Technology, 15(4), 245-265. https://doi.org/10.1080/02683960010008944

Umble, E. J., Haft, R. R., & Umble, M. M. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146(2), 241-257. https://doi.org/10.1016/S0377-2217(02)00547-7