Supply Chain Blog

Do Spreadsheets Undermine Your ERP in FMCG/Brewing/Pharma?

Posted by Dave Jordan on Mon, Oct 25, 2010

Despite what you might wish to believe the answer is probably, yes. You have invested heavily in brand spanking new ERP software and similarly heavily in some smart, young consultancy people to run the implementation. You will have spent some timing debating and making these choices as the change to an all encompassing and integrated ERP is a huge step and at the same time a huge risk for your FMCG/Pharma company.

Suddenly the flexibility to back-date or correct entries is lost or at least there is a rigid and auditable procedure to follow in order to make any adjustments. Sudden uplifts in Sales cannot be slipped in unnoticed and neither can the supply shortages or Marketing tardiness with promotional activity. Everything you do in a good ERP is recorded and can be seen.

ERP System ImplementationIf your ERP really is the only software being used to run your business then a hearty well done to you. However, in a surprisingly large majority of FMCG companies the all important role of change management has not received the required seniority or focus.  Staff who have been using spreadsheets for maybe 10 years cannot and will not stop using them just because they have been trained in a new ERP.  Spreadsheets are like a cuddly teddy at bedtime; they are familiar, comforting, not demanding and always there!

An element of your decision to implement a new ERP was probably a supplier guarantee that people productivity and data accuracy would be improved through use of the integrated IT. In reality you will find staff operating a covert shadow ERP on the same old spreadsheets. Detailed planning, sales and allocation decisions are being made on a spreadsheet and then manually inserted into the ERP. Commonly, decisions are taken in isolation of S&OP and lack the consistency that ERP master data brings plus the all important history development for the business baseline.

Staff efficiency and data accuracy have certainly not improved; they have worsened. The tedious “cut and paste” of data into the ERP is time consuming and fraught with error. Post ERP implementation is always a rough time for FMCG/Pharma businesses  as they get to grips with new IT but is it any wonder some stay in a continual state of intensive care?

If you pay sufficient attention to change management you can lessen the impact. If staff cannot see the medium terms benefits outweighing the short term inconvenience then they will operate the shadow ERP.  The change manager has to clearly show what the ERP brings to people first and subsequently the company – not the other ware around.

Of course, one solution might be to deactivate the spread sheet program on the network until ERP discipline is second nature? Now, who is brave enough to do that?

 

Image credit: HikingArtist

Tagss: FMCG, Dave Jordan, Pharma, ERP/SAP, Integrated Business Planning