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Technology Readiness and ERP

27 June, 2017

With all the hype around the Fourth Industrial Revolution, Nick McGrane, managing director of K3 Syspro, takes us back to basics and takes us through some of the fundamental principles of evaluating where your business is currently at on the Technology Readiness scale.

‘Is your organisation ready for ERP?’ has become a familiar question in business and one that has certainly already been answered by industry’s leading companies. Even so, as manufacturing constantly evolves, it is important to be aware of how and where Enterprise, or Manufacturing, Resource Planning solutions can be introduced or upgraded for performance benefit.

It’s not just about a company’s existing ERP and the latest software developments. It also implies a review of business and manufacturing processes, potentially right throughout the supply chain.

Looking first at in-house manufacturing, for a company embracing Industry 4.0 and Smart Factory models, questions like “Is there an effective robotic solution for our sub-assembly operation?” should be considered alongside “how best can we integrate automation control in an ERP system?”

There are normally alternative technological solutions and while some may be fully established, others may require development. Decision making is aided when a structured assessment system is used to navigate the options.

Technology Readiness Levels (TRLs) can play a part in assessing these issues methodically, within a frame of reference. Originally conceived by NASA, TRLs have an assigned number, from 1 to 9, indicating how far a technology has progressed, from theoretical to fully implementable. NASA used TRL assessment in the selection and development of emerging aerospace technologies. Careful assessment at each project stage determined which technologies to progress and which to sideline:

TRL Description

1 Basic Research: basic principles are observed and reported

2 Applied Research: technology concept and/or application formulated

3 Critical function, proof of concept established

4 Laboratory testing of prototype component or process

5 Laboratory testing of integrated system

6 Prototype system verified

7 Integrated pilot system demonstrated

8 System incorporated in commercial design

9 System ready for full scale deployment

Other aerospace manufacturers adopted the TRL approach but it is now much more widely used across industry as a method of ranking alternative propositions on the back of research, analysis and benchmarking.

Although the TRLs given here are fairly specific, the basic principle is open to adaptation. There is no reason why ERP technology cannot be assessed in the same way, using a TRL ladder, either in developing a bespoke ERP system, or comparing the applicability of different ERP solutions. TRL measurement can also be applied when monitoring progress and planning business goals and actions. Businesses can self-assess their entire management systems, separating the methods and technologies that are ready to go from those that might limit the success of ERP implementation. By using a TRL exercise to assess the readiness of an ERP software solution, a manufacturer can reduce schedule slips and avoid failing to meet performance objectives and the degree of operational agility it seeks when introducing new ERP modules.

It is also useful to look at the six phases of activity that take a technology from basic idea (TRL 1) to finished article (TRL 9), as they can be applied when assessing and introducing a new ERP solution:

1. Basic technology research

2. Research to prove feasibility

3. Technology development

4. Technology demonstration

5. System/subsystem development

6. System test, launch and operation

This sequence also has a resonance with the process of automation and developing smart factories. The concept applies to the engineering design, the hardware, software and all the other systems and technologies with which robots interact, including the Internet of Things.

We know that ERP can link business management technologies across entire supply chains. Therefore the TRL of an ERP component, can have a bearing on the performance of the enterprise as a whole. Conducting a TRL exercise gives businesses the chance to measure how well they are using technology already, how they might improve their existing technology and estimate how new technologies could deliver advantage through the complete supply chain. This is not necessarily a complex process - a TRL exercise can use straightforward SWOT analysis along with industry benchmarks to calculate a TRL scale point.

Industrial competitive benchmarking is concerned with measuring business performance against comparable processes in other leading companies. Group companies can exploit internal benchmarking between sister organisations to generate a comparison of KPIs. Alternatively, functional benchmarking compares similar business operations within an industry, not necessarily between companies in direct competition. Operations that are very similar across wide areas of industry can also be usefully compared, in generic benchmarking.

Of course, manufacturers who set industry benchmarks are almost certain to employ advanced technologies. These technologies may occupy ‘islands’ of automation, or ERP-enabled business functions – in fact a series of existing initiatives which, when linked effectively, can achieve an Industry 4.0-style operation with products and processes able to engage with the Internet of Things. In linking-up the technology building blocks it is important to evaluate to what extent an ERP system can be integrated with third party systems and devices.

When it comes to ERP readiness, vendors of solutions are willing to share their experience and provide advice and assistance on TRL exercises, establishing where and how to implement ERP technology. Exercises might examine KPIs, production bottlenecks, plant layout, scheduling and materials control but might also extend to logistics, data management, financial control and any number of supply chain factors.

On the other hand, if a thorough comparative assessment of alternative ERP solutions is required, it can help to use an independent consultancy. As well as cost of ownership they will look at vendor software, comparing the scope of application and functional fit according to the specified needs of the business. They will also check out the relative strengths and experience of ERP vendors in the client’s own industry, the innovation and direction behind the ERP technologies and the support network that vendors engage with in staying ahead of the development curve.

Finally, it should be emphasised that acquiring and implementing information of real value takes considerable time and resources. But as demanding as it may be, moving a manufacturing organisation forward through TRL assessment and benchmarking exercises is essential to building and maintaining world-class companies and ERP vendors and consultants can assist in the process.

For further information please visit: www.k3syspro.com

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