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Software is Only Part of the Answer

Best Practices  
07/01/2009
Many companies of every size will look at software to improve their operations and rightly they should. Having the right information in the right place at the right time in the right form can certainly help accelerate our ability to make the right decision at the right time. More sophisticated system solutions can actually suggest a calculated or derived best decision. This is the promise that most ERP systems are sold on. The results, at least in the sales process, are that sales will go up, inventory will come down, the workforce can be trimmed, we will all lose weight, our children's grades will improve, and the bald shall grow hair. How can we possibly resist?

This does not always happen. There are many reasons for this. One reason is that we count on the software alone to do more than it possibly can. We tend to view the software as the panacea, the magic pill, the fairy dust that will solve all of our problems. We know there are no magic pills and fairy dust. Yet, we buy-in. None of us are really immune. If we believe that implementing any kind of software is the answer. We are asking the wrong question.

Software is important. But it is not the solution; it is part of the solution. It is a tool. It is part of a larger scope process; a business process that needs to be, yes I am going to use the word, re-engineered. In the original concept, re-engineering was using the software/system implementation as the backbones of a process re-design to improve business performance in many dimensions. The software is designed to handle the information part of the business process. It does not allow for, control, or predict how people will interact with it. People have to ensure the data is up to date and accurate. The business process programmed into the system and used by human beings should be more or less the same. More is much better than less.

DemandCaster® is a great piece of software. It is used to properly evaluate and size inventory to provide the best scenario to best optimize cash flow and customer service. It has excellent reports. BUT, it is no more a cure-all than any other system or software. It is a tool, a very good tool, to help companies better manage their inventories. However, we all know a tool by itself is useless. A tool, especially a sophisticated tool, is best employed in the hands of someone who is skilled at using that tool. It can help facilitate optimized inventory management but it cannot work any better waving a magic wand over a distribution center if the people part of the process is ignored. It can help define, isolate, and report on Excess and Obsolete inventories but it cannot sell or write-off that inventory. That takes well crafted and sound people processes. It can recommend inventory sizes and re-order points but it cannot make sure the data upon which these numbers are calculated are up to date. It cannot make sure the right production is scheduled or imports are ordered. All of this takes well crafted and sound people processes.

Changing the system and not attending to the people part of the process is probably not much better than doing the same old thing in the same old way and expecting different results.

So, by all means seek out the system tools that can help your business. Just remember, do not neglect to re-engineer the people part of overall process to deliver the results you want and need for your business.

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