Case Study: Transforming a Failing ERP Implementation for a Mid-Sized Manufacturer

Background:
A mid-sized manufacturing company with an annual revenue of approximately $60 million was struggling with a failing ERP implementation. The project had stalled, with only the Accounts Receivable module implemented, even though the initial budget of $1.2 million was meant to cover the entire implementation, from Accounting and Production to Supply Chain. Facing a mounting crisis, the company was on the verge of taking legal action against the system implementer, as management and the implementation team had reached a complete impasse. That’s when they called me in to assess the situation and chart a new course.

Challenges:
Upon conducting a thorough analysis, I identified several critical issues:

1. Management and System Implementer Impasse
   Due to mounting frustrations with missed deadlines, budget overruns, and unmet expectations, the company’s management was at odds with the system implementer. Relations had become so strained that the company was preparing to pursue legal action, further risking delays and escalating costs.
2. Lack of Management Focus
   While supportive of the ERP initiative, the management team lacked the active engagement required for a project of this scope. Limited oversight and accountability had created significant roadblocks in aligning project execution with business objectives.
3. Absence of Change Management
   Change management efforts were almost non-existent. Employees at all levels were struggling to adapt to the ERP system and were unsure of its potential benefits, creating a significant barrier to adoption.
4. Misaligned Vendor Promises
   The ERP vendor had initially assured the company that implementation would be straightforward and could be achieved with minimal support from their systems integrator. Unfortunately, this proved unrealistic given the lack of in-house experience.
5. Inexperience Across the Organization
   The company’s entire team, from IT personnel to upper management and operational staff, had limited knowledge of ERP implementations. They were overwhelmed and without an independent consultant to provide unbiased, expert guidance, the project continued to spiral.

Solution:
My approach was focused on realigning the project with the company’s needs and providing a hands-on, independent perspective to get it back on track:

• Conflict Mediation and Strategic Realignment:
  I acted as a neutral party to mediate between the management team and the system implementer, allowing both sides to refocus on shared objectives instead of potential litigation. With tensions reduced, we were able to create a workable plan that addressed both parties’ concerns and prioritized project success.
• Budget Adjustment and Scope Redefinition:
  After reassessing the project scope and objectives, I recommended that they revise the budget to $2–$2.5 million to cover the necessary resources for a complete implementation. This increase, though significant for the company, was necessary to achieve their goals and avoid further costly delays.
• Enhanced Change Management and Training:
  I introduced a structured change management framework to guide employees through the transition. This included training sessions and clear communication strategies to demonstrate the ERP system’s benefits.
• Independent Oversight and Expertise:
  As an independent consultant, I provided neutral, expert guidance throughout the implementation, ensuring accountability, effective project governance, and alignment with best practices.

Results:
With these adjustments, the company regained control over their ERP implementation. The revised approach addressed critical organizational challenges, resolved the impasse with the system implementer, and restored confidence at all levels of the company. By taking ownership of the process with structured guidance, they were able to move forward with an implementation that would ultimately support their long-term goals.

Case Study: Modernizing Systems and Processes for a Legacy Manufacturer

Background:
A mid-sized manufacturing company with annual revenue between $80–$100 million had been operating on a legacy ERP system for 25 to 30 years. The outdated system, no longer supported or upgradeable, presented numerous challenges, from quality issues to operational inefficiencies, making day-to-day operations increasingly difficult. Inconsistent reporting and data output left the company without a reliable “single version of the truth,” and their workflows and finished goods inventories were constantly out of balance, with finished goods inventory discrepancies reaching approximately $350,000 each quarter.

The company recognized a pressing need to modernize, improve data consistency, and establish effective workflows that would bring order to their operations. This project involved guiding them through an ERP implementation from beginning to end.

Challenges:
During the initial assessment, several key issues emerged:

1. Obsolete Legacy System
   The legacy ERP system was outdated, obsolete and no longer supported, with no upgrade path available, limiting scalability and causing frequent disruptions in quality and efficiency.
2. Data Inconsistencies and Reporting Difficulties
   Without consistent reporting and reliable analytics, the management team lacked a single, dependable source of data, impacting strategic decisions.
3. Inefficient Workflows and Inventory Discrepancies
   Inefficient workflows and frequent inventory issues affected their ability to fulfill orders accurately. As a build-to-order company, these challenges led to significant financial discrepancies, with finished goods inventory variances totaling around $1.4 million per year.

Solution:
Working closely with the company, I took a comprehensive approach to help modernize their systems and refine their processes:

• Business Analytics System Implementation
  I designed and implemented a robust business analytics system that provided real-time, accurate data across departments. This new system empowered the company to track key metrics reliably and enabled a single, consistent source of truth for decision-making.
• Process Redesign for Inventory Management
  A major focus was reworking their inventory management processes. By refining workflows and integrating effective inventory controls, we reduced their annual inventory variance from $1.4 million to less than $10,000, allowing them to track and manage finished goods inventories with far greater accuracy.
• Streamlined Accounting Closings
  I guided the company in redesigning their financial processes, reducing the time required for month-end and year-end accounting closings from several weeks to a few days, and in some cases, mere hours.
• Expectation Management and End-to-End Guidance
  Throughout the project, I helped manage expectations, ensuring the team understood the steps from ideation to successful implementation. This alignment kept the project on track and fostered a shared understanding of realistic outcomes and goals.

Results:
By the time the ERP implementation was completed, the company had fully transitioned to a modern, efficient system. They achieved consistent, reliable data output, gained trust in their analytics, and improved workflow efficiencies across all departments. The project concluded on time and on budget, and the company could now operate with renewed confidence in both their data and processes. This transformation not only addressed their immediate operational needs but also positioned them for future growth and adaptability.