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FAQ - What benefits should you expect from a Business Excellence project?

Almost everyone who has implemented an MRPII or ERP system will tell you the same thing. Do not expect to get many benefits from just implementing ERP (enterprise resource planning) software unless you change your ways of working to take advantage of the new opportunities that an ERP system gives you, we call this Business Excellence.

The benefits of implementing a Business Excellence programme will vary depending on how well you plan and control to start with, the type of company and how well the concepts are adopted. Likewise the time scale will vary depending on your current status and the resources you are able to commit to the improvement project. If you appoint a full time project leader and currently have an MRPII (manufacturing resource planning) or ERP (enterprise resource planning) system implemented, you should expect to see the benefits below in about 6 months. If you current plan manually or with spreadsheets and are implementing a planning system using the Business Excellence principles, the benefits should take about 18 months to realise depending on the software implementation time scale. In the worst case you should see the benefits below 18 months after cut-over to the new ways of working.

The typical benefits achieved by companies we have worked with, including the companies in the case studies, are as follows :

Area of benefit

Typical

Better Companies

Inventory reduction

30%

75%

On time delivery (make to order) or stock availability (make to stock)

to 95%

to 99%

Lead time reduction

down 50%

reduced to 1/10th

Manufacturing cost due to both more efficient use of people and equipment as well as improved productivity

down 10%

down 50%

Purchased material costs by using greater visibility and vendor scheduling

down 3%

down 20%

Reduced stock obsolescence

20%

50%

Stock record accuracy

up to 95%

up to 99%

Bill of material accuracy

up to 98%

up to 99.9%

Stock turns

doubled

tenfold increase

Typically the better companies spend twice as much on education and training staff on both the software and the business excellence issues before implementation but achieve a 200% return on investment as opposed to poor implementations which never see a net return.

There are consulting groups who could help with ERP education and training but an alternative that has proved successful and much more cost effective is to train an internal team of 3 or 4 experts. To assist you in this process I have produced an ERP class “A” toolkit which includes my book “Business Excellence” and all the other information you need for a class “A” implementation. Click here for more information and a link to purchase this toolkit for just GBP34.90 (about US$63 or 50Euro). Of course this toolkit will not solve your problems for you but it is an inexpensive way to help get you started.