ERP in logistics (http://www.ironya.com/601505.html?

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I wished to write the treatise on the subject of SAP in technologies 3PL, 4PL logistical providers. Was not in time. Financial crisis has burst. However if to replace SAP on ERP with licences GNU (free, with open codes), probably, it is possible to state my reasonings. The matter is that the draught copy of this article has been written one year ago. Till the present moment of possibility to finish the article to mind, at me was not. Now such possibility has appeared. This history has begun several years ago. It has begun with a banal question which I have set to myself. Having behind shoulders successful experience of a management by working out, introduction and operation of an information system for logistics in architecture "client-server" (a logistical information system - LIS), I have understood, that me as the project leader, quality of management does not satisfy with changes. This effect in discrepancy of speed of reaction of updatings of system and changed environmental conditions of business was showed. I would say, an increasing lack in technology of system from requests of the logistical market. The reason was banal - scrappy automation, and add here constantly increasing requests on efficiency of management of changes. Familiar history, isn't that so? I have not thought up anything new how to carry out own analytical researches on the subject of as it is possible to solve this problem. The answer - ERP. It is natural, that me the most known interested world ERP systems (for example, SAP ERP, Oracle e-Business Suite, MS Dynamics NAV/AX, Epicor/Scala, Baan). At the first stage it was important to understand, how in ERP to system it is possible to automate business processes of carriage consignments. For achievement of this purpose I used two principles. Studying of main principles of construction ERPII (in parallel with allowance for requests of own logistics). And the analysis of existing world branch decisions and experiences on the basis of the mentioned software. To convince itself that use ERP of systems for automation business of processes 3PL logistical providers the correct and effective decision has appeared business simple (I even has constructed simple model for MS Axapta). Now it was necessary to convince colleagues of correctness of my ideas. It has appeared much more difficult. The basic complexities were the following. My colleagues were not professionals in the field of information technologies that demanded the explanation of main principles of construction ERP of systems in language clear it. And it is valid than use ERP differs from classical principles of management working out of the software? For what it is necessary to pay the big money if programmers program what will order to them? The following serious problem. This occurrence of several stable myths about ERP which to me should be denied during the project for choice systems (further I I will describe them in details). The reasons of occurrence of myths the following - unsuccessful experience of "neighbours", absence of branch experience.

Absence of branch experience (3PL logistics) to operation ERP of systems in Russia led to some uncertainty of interpretation of our problems the consulting companies participating in the project for choice ERP system. Uncertainty gave bad effect of tearing away of systems as "inappropriate" to business requests. The reason is banal. The majority of the consulting companies which had experience of automation of separate directions of logistics on platform ERP, presented it as the universal decision. It not so. Such situation irritated my colleagues (-irritated) as offered decisions mismatched their requests though were declared in quality of full-scale systems for automation of logistical activity. It is natural, that on idea of additional programming ERP on the basis of our technical project, the sensible objection sounded, that we are able to do it. However not all so is bad. As I have understood, that have come not from that party. We tried to find ready decisions from the bottom of a technological chain (front-office). But ready decisions on automation of operative activity was not (today them too a little). Then I have changed tactics. We began to consider ERP system as a platform for construction of full-scale system for automation back-office. After that the situation has considerably improved. ERP technologies have ceased to seem incompatible with logistics, including for colleagues. More interesting result was received with technologies BI (Business intelligence). But about it I will write in other article. Let's return to myths which accompanied the project for choice ERP systems. Partly at the analysis of myths in the conditions of financial crisis it is possible to consider decisions on the basis of the free software (GNU), including - free ERP. However it is not necessary to forget, that introduction and support of free systems requires financial expenditures sometimes big than the paid software. The reason simple - at the free software much less branch experience of use. Myths was 5: ERP system is very expensive decision, ERP the system takes root long term, ERP system this very difficult decision, ERP the system is very expensive in operation, any partner of the company of manufacturer ERP will program any branch decision. Let's look at the results which have turned out at me. 1st myth: ERP systems is very expensive decision. It not so. What to understand as concept road? It is learnt in comparison. It is possible to use only spreadsheets. If the company has staff of programmers which create own information system the concept "road" has already other sense. It makes sense to compare cost of various decisions and to choose the optimum decision by the current moment. One more factor which defines introduction and operation ERP cost. Frequently high dearness of the project is defined by absence of competently organised job, as with the supplier of the decision, and the partner in which function system introduction can be entrusted. The reason, in my opinion, is banal. Some IT managers not always can correctly organise correct process of job with suppliers and with partners. The matter is that there is contractual a process under the name a price substantiation, proceeding from real requirements of the company. Naturally, those who

is on one I will shift barricades, cost, on the other hand the consumer try to overestimate as much as possible should aspires to minimisation of expenses. It can concern such aspects as reception of discounts, functionality optimisation, correct cast and competent use of present resources. Correct cast and resources. Any business in this or that kind possesses a certain stock of information resources. These are programs, engineering, experts, projects, the documentation. Important in the project of expansion ERP to consider these making as real help which will help to reduce a project cost as a whole. For example, the question of qualification of staff is decided by training, contract designs can be modified under requests ERPII. 2-myth. ERP the system is introduced very long term. What to understand as long term? Actually term of introduction of system is defined by software life cycle in concrete business and in the concrete company. If introduction term exceeds life cycle terms is a first call about possible failure of the project as a whole. To avoid delay of terms it is necessary to make two important things. 1. At project planning it is necessary to study attentively technologies of introduction and to try to adhere to them. For example, ASAP. Important in strategy of development of a IT precisely to describe structure and procedures of management by projects and precisely to observe them further. Believe, "telephone" technologies work only till the certain moment then can lead to disorder of projects. 2. It is necessary to break the project into stages as much as possible accurately. It is not necessary to operate with terms only in understanding of the whole project. The stages are more detailed registered and described, the predicted there will be a result. The most important thing, at accurate detailed elaboration is easier and operatively to operate design changes. It is necessary to mean, that project term depends on the budget, that is, the it is less budget, the terms are longer. As budget decrease leads to restrictions of planned resources. Important! For any project there is a minimum budget. It those means in which frameworks the project can be executed. If the allocated budget less than this size the project, most likely, will not be executed in full. On the other hand, initially wrong estimations of the budget can result further in the additional not planned expenses. To help to be defined correctly with the budget it is possible having received three scenarios of possible development of a situation: the maximum sharing of the contractor, minimum sharing of the contractor, recommended sharing of the contractor. These estimations should be received from all companies participating in the tender for project fulfilment. 3rd myth. ERP system it is very difficult. It is difficult, if there is no correct preparation of staff. It is necessary to understand, that any industrial system requires to itself the industrial relation. Certainly, introduction of system will

require of ordinary users of additional expenditures of time and forces as the new program should study, and to transfer data thus executing the direct official duties. In general there is an error, that qualitative information systems simplify work of ordinary users. Idea of "one button. It not so. Reception of the qualitative information is impossible without input of the qualitative information. Input of the qualitative information requires additional expenditures of labour. Whether company management is ready to radical change of the relation to quality of the information is a question to management, instead of to information systems. 4th myth. ERP system road to operation. In comparison with what? With decisions of "scrappy" automation? At which, as a rule, "rags" are financed from different budgets. And who has counted losses from non receipt of in time important information, especially in a crisis situation? As is known, correctness of acceptance of the information depends on quality of the information which is defined not only reliability, but also efficiency and indissolubility. At "scrappy" automation is a science fiction. Situation it is possible to break consolidating a IT resources and having created system of motivation for a IT of the services, constructed on the basis of a principle cost reduction of cumulative possession. 5th myth. Any partner of the company of manufacturer ERP will program any branch decision. Will program. Here only the question, how much this process will take on time, and how much such decision will cost. It is necessary to understand, that the availability of branch experience at the partner can really help with reduction, both terms, and costs. The logic simple - knowledge of the branch, ready operating time and decisions for branch, development of functionality of system for standard modules, understanding of problems of management - reduces largely risks of the project. Process of choice ERP of system it is necessary to organise terms and possible results in the form of the project in which accurately to register stages. Here it is quite good to spend own forces the analytical job connected with definition of boundary cost and terms. Methodology of choice ERP can be the diversified. To convince the colleagues of correctness of a choice it is important to develop strategy of development of a IT of system, having connected it with strategy of development of the company and having defined the basic concepts, controlling mechanisms, qualitative and quantitative criteria of an estimation of terms and costs to define risks. Introduction of uniform system - the uneasy process requiring of the company significant efforts. It is necessary to be defined, for the sake of what these efforts will be applied. To refuse present experience, let and scrappy automation, it is not necessary. It is a resource which the company already has. There are two basic ways of the decision of a problem of migration from homebrew systems in a direction of the industrial decision. Smooth replacement and a shock direction. In any case, present experience at the company should be used on a

maximum. Gradual and smooth replacement. Basic modules ERP are introduced. Existing "scrappy" decisions are integrated with them. Projects on creation of existing unique decisions on the new tool Further begin. Migration of data goes a following stage. In this case probably parallel management separate stages, is important that they in technological sense did not block one another (to avoid an internal competitiveness). The radical, shock method consists that system blocks are introduced at a complete stop of existing analogues (without integration). The following stage begins under condition of successful fulfilment previous. Parallelism of projects in that case represents essential risk of the project as a whole. It does not need to use, on my belief. Data, naturally, are transferred from one system to other. At such method better initially to create control centre of the standard information (master data). Not only to create, but also to start it in commercial operation. Risks of the project. They should be defined before start of the project and to develop their localisation at the initial stage as during the project it can appear that a situation left from under the control. My analysis shows, that in the majority a case ignoring of risks leads to failures. The V-principle, at the detailed analysis business of processes it is possible to formulate the basic groups of risks. At a stage of choice ERP of system on the generated groups it is brave it is already possible to detail possible negative scenarios of development. For myself I have defined main principle of decrease, both costs, and risks of the project on introduction ERP. A V-principle, it can be used for the project of introduction of any class of information systems. It consists in the following. In the beginning it is necessary to spend a detailed system analysis of all (without an exception) business of processes of subjects of automation (it is desirable - adjacent). It is necessary to choose modules ERP of system and business processes which in the maximum degree correspond one another (the maximum conformity) Further. Processes which rather without serious consequences can be harmonised with configurations ERP (reengineering business of processes) will be the second class business. The processes which have remained business should be divided on two parts. For the first part updating of modules ERP (updating a configuration) is possible. And only the processes which have remained business should be programmed from zero (the branch decision, as a rule, concerns to front-office). It seems to me, such approach will allow to reduce the budget by expansion ERP of system and to reduce risks.