TAdviser.Expertise: opinion of experts of SPb CIO Club in use of ERP systems in mechanical engineering

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Facts

Except the opinion on a situation in general (of which it will be a question below), experts also provided data on a situation in own enterprises. So, from 9 used ERP systems: 1 – own development and 8 drawing. In particular, 3 domestic (2 – "1C: Manufacturing Enterprise Management 8.0" and 1 – Galaktika), and the 5th foreign origin (1 – Oracle E-Business Suite, 1 – SAP R/3, 1 – Infor SyteLine).

What ERP system is used at your enterprise? *

* Data are provided on 9 engineering enterprises  at which experts work

Source: Center TAdviser, SPb CIO Club

From 9 implementation projects of ERP systems 3 are not completed yet, 3 are complete in 2007 and 2 are complete till 2000 (to determine terms of an implementation project of a "self-written" system quite difficult since it is almost impossible to separate implementation from development and "operational development"). At the same time, from 8 companies in which experts work 5 implemented ERP systems for the first time, 3 implemented repeatedly (at the same time only in one case it is about unsuccessful implementation of the first ERP system, in two other softwares became morally outdated).

In 4 companies from the 8th the top management and IT service are satisfied with results of implementation of the ERP system, in 3 – the top management and IT service of results are not satisfied, in 1 – the top management is not satisfied, and the IT service abstains from estimates.

From 9 ERP projects predesign of cost efficiency of the ERP system was carried out in 3 cases (in both implementation projects of OEBS and at SyteLine implementation). At the same time, the effect of implementation of the ERP system affects production indicators in 4 companies from 8, in the 2nd effect is not shown also in the 2nd negative effect.

As the most often automated tasks at engineering enterprises were listed: accounting and reporting, management accounting, financial accounting and planning, inventory control, production planning, sales management, management of fixed assets, logistics, supply. So, from 8 companies in the ERP system sales management is implemented in 6, accounting and preparation of the reporting is conducted in 5, managerial/financial accounting – in 4, management of supplies/purchases – in 4, inventory/material control – in 4, personnel records and payroll calculation – in 3, budgeting – in 3, production management – in 3, management of maintenance/service – in 2, design-technology preparation of production and product lifecycle management – in 1, quality management – in 1.

What functional areas are covered by the ERP system in your company? *

* Data are provided on 9 engineering enterprises at which experts work

Source: Center TAdviser, SPb CIO Club

Among processes with which ERP systems cannot cope are specified: operational planning / solution of "a schedule task" in real time, joint work of subsystems in real time, processing of unique production processes, strategic planning. At the same time, from 8 companies applications of best-of-breed are used by 4: 1 – CAD/CAE, 1 – BI, 2 – accounting and personnel records and the reporting. Along with it, survey participants consider that most often it is required to integrate the ERP system with the following systems: PDM, CAD/CAM/CAE, BI, BPM, CRM, WMS, MES, SCADA, SCM, APS.

Opinions

Six of 9 experts consider that, with certain clauses, engineering enterprise can do without ERP system, using applications of best-of-breed, 2 – consider that it will not be possible to do without ERP solution. Along with it, 7 of 9 experts consider that there is a certain "point of phase transition" after which engineering enterprise should implement the ERP system to continue to develop further, 2 refrained from the answer.

Among possible indicators of approach to "phase transition" were specified: "time of import export of data from different data domains", "a maturity of the enterprise" (readiness to change/improve the activity for satisfaction of customer needs), "reorganization of consciousness of the head", "volumes of work in progress and stocks", "frequency of failures to meet time constraints of delivery", "the relation of the sales prices of products to cost value", "business scale", "production volumes, update rate of personnel".

From 9 experts 8 consider that at determination of a configuration of the complex system including ERP, MES, SCADA, CAD/CAM/CAE, etc. the choice should be made proceeding from requirements of the enterprise and abilities to integrate solutions, but not "from the ERP system". 1 – refrained from the answer.

At the same time, only 3 of 9 experts consider that time of custom/independent developments passed and at the serious enterprises drawing solutions should be used, considers 1 that everything is defined by TCO, 4 consider that by means of drawing solutions all requirements cannot be covered and "self-written" developments will be used all the same.

Some digits:

• 8 of 9 experts consider that the ERP system is not (should not be) by "brake" when changing the production technology, 1 – that it can slow down process of transition to new technology.
• 5 of 9 experts consider that technology optimization gives bigger, though one-time, the deposit to efficiency of engineering enterprise, than the ERP system, 4 refrained from the answer.
• 8 of 9 experts consider that demand for ERP will unambiguously grow in mechanical engineering, 1 considers that it will occur only on condition of real development of the industry.

Additional notes:

According to TAdviser, the given data and opinions of experts allow to draw the following conclusions:

• Those enterprises where projects are not completed yet are not satisfied with effect of ERP or there did not pass the term for which the effect of ERP system implementation should be shown.
• Those enterprises where it is reflected in production indicators are satisfied with effect of ERP.
• Those enterprises where solutions of best-of-breed are also used are satisfied with effect of ERP.
• Consider that the enterprise can do also without ERP those who consider that there is a point of "phase transition" after which shall pass the enterprises to ERP. Respectively, they, most likely, mean that it is possible to do without ERP before "phase transition".