Mike Liddell CEO of Lean Scheduling International talks about ERP and APS.
Over the last 20 years working with manufacturing companies, I have had literally hundreds of discussions with managers and executives about the problems they were having with their ERP systems. As I listen to them I realize that many of them do not have a clear understanding about the obvious limitations of their ERP systems in the areas of planning and scheduling.
I believe that a more accurate name for ERP systems would be EBRP systems (Everything But Resource Planning) and that is what this book is about. "The Little Blue Book on Scheduling" was written to give managers and executives an interesting perspective about a subject that will almost certainly impact their short-term profitability and their long-term ability to compete.
I am sure that some of you have been deeply frustrated by the inability of your ERP systems to do something simple such as understanding how a late delivery of raw materialswill impact your ability to deliver an order on-time. You will probably be shocked to know that your ERP system doesn't really have a built in cause and effect mechanism.
In fact many of the things I will share with you in this book will probably go against everything you have been told and that is why I go to great lengths to argue each of my points rationally and logically.
Fundamentally I feel that when we lived in a make-to-stock world, many of the problems I talk about were buried by excess inventories and built in time buffers. As companies started to move into the LEAN/make-to-order world we strip away the built in buffers and we start to expose some of the fundamental flaws that were built into most off the shelf ERP systems.
Those manufacturers who admit to actually having capacity constraints must come to grips with the reality that they are in the business of selling their capacity. Every time they react to the squeaky wheel like Pavlov’s dog, they risk clogging up their plants with low priority, low margin orders. What I am saying is that manufacturers have a choice, either they manage this process or they risk losing their key clients. Of course, without their key clients, they cannot stay profitability and they cannot grow. Luckily once you understand the problem you are well on the way to solving it.
