Overcoming Common Manufacturing Mistakes with ERP with Nick Foy

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturer's Network podcast. Our guest today is Nick Foy. Nick is the founder, CEO, and Chief Evangelist of Silverdale Technology, which provides access to world-class processes, systems, and change management methods, regardless of the size or budget. Democratizing ERP, he has over 30 years of experience in business and technology consulting and leadership positions, focusing on logistics and supply chain. Nick, welcome to the show.

Nick Foy: Thanks, Lisa. It's great to be here.

Lisa Ryan: Share a little about your background and what led you to do what you're doing with Silverdale.

Nick Foy: Yeah, like you said in the introduction, I usually say it's been 30 years, but I probably should increase that a little now. I've been saying that for a couple of years now. It's time I revised that number. But my background I started on the manufacturing line. That was my first job in the manufacturing line, producing video recorders.

And I'm guessing some of your listeners aren't going to know what the hell I'm talking about. Whatever the hell is a video recorder, and why would you make one? That was my first job. I probably got sacked from there after three months for being a disruptive influence on the production line, and I'm pleased to say after 30-plus years in the industry, I'm still doing the same thing.

Lisa Ryan: Is that disrupting things?

Nick Foy: Absolutely. Asking questions, pointing things out, and making changes is what I do. As I said, I started on a video recorder production line. I then moved into what every good Scotsman does - I ended up working at a whiskey company and worked a lot in production and logistics in that in that business for six years, and then went down into third-party logistics and which was a great experience., and then, found myself in consulting. I worked for some great clients, such as Kellogg's, doing manufacturing and lean manufacturing with them all over Europe. I eventually ended up at Amazon and spent five years at Amazon doing some great projects there.

Three and a half years ago, I founded my own company here at Silverdale, which is about bringing together the 30-plus years of experience that I have and helping companies that I've seen over the years, just like those, get into ERPs and systems and helping companies with process design and implementation.

Lisa Ryan: Can you explain what ERP is and why it's crucial for businesses?

Nick Foy: ERP is such a horrible phrase. Anyone who's not in the ERP industry doesn't call it that. It's a ridiculous phrase that we use internally. And when we say ERP, it stands for enterprise resource Planning.

Now, that doesn't mean anything, either. We all know what those three words mean individually, just not in that order. What we're talking about is we're talking about a set of tools within a system that helps you to manage workflow to help give you a single view of the customer, a single view of your business, where all your data is connected, regardless of whether it's customer or product, bills, and material, whatever those things might be.

Having it all in one place so you can make better, faster, smarter decisions. That's what an ERP is. And it's designed to replace a whole myriad of different systems out there that many companies are using if you get it right.

Lisa Ryan: Regarding manufacturing, which is the show's focus? What should leaders in a manufacturing company look for to implement an ERP system?

Nick Foy: If I were a manufacturer, some of our clients are very much into light manufacturing but also very heavy manufacturing. I recommend that you don't look at it in isolation from a manufacturing perspective, what's happening left and right, up and down in the manufacturing space.

What we mean by that is how did the manufacturing order get created. What did that happen in the first place? Is it? A sales order. How did that sales order get created? Did it come from CRM? You've had to look left of that process. Then you have to look right at that process. Once it's manufactured, what do I do with it? Do I put it into inventory? Am I managing that through lots of serial numbers? How do I ship that to customers, get it off the shelf, et cetera? And then we've had to look up and down. What we mean by up and down is then looking at things like how do we control things like versioning. How do we control the bill's material?

How do we control things like PLM - product lifecycle management? How is all that controlled? And then there's the detail of the manufacturing process itself: how are work orders controlled on the floor? How do I get instructions to operators? How do I make things clearly and easily understood on the shop floor? How do I control quality maintenance, all that great stuff that goes along? Again, because we're talking about all those things, it's about more than just that core manufacturing part of the system. There are lots of inputs, there are lots about bots, and there's a lot of stuff up and down at that as well.

As far as manufacturing's concerned, there are a lot of great standalone manufacturing systems out there. We know that. But you've got to ask yourself, does it do everything to the left and right and up and down of this process as well? If it doesn't, then you'll have a hard time in manufacturing.

Lisa Ryan: There are probably some challenges you've observed in the manufacturing and industries you've dealt with. What are some common challenges, and how can an ERP system address them?

Nick Foy: One of the, one of the biggest challenges we see from our clients and especially over the last few years with covid and supply chain issues, is, do I have everything on the floor ready for me to start my production process?

That's one of our most common issues when starting this production run. Do I have all the raw materials I need where I need them? And again, that comes down to your inventory control, how you receive products, how you store products, and how do you pick for production. For example, I can start the job by ensuring everything is in place. And getting that visibility here are the jobs I can start and those I can't. Your system needs to give you that kind of insight into material readiness or component availability.

There's nothing worse than starting a production when realizing a quarter of the way through you're missing a vital component and then having to scramble. You either have tons of work in progress now taking off the line, or you have to substitute something else that may not be as ideal as it could be.

There's nothing worse than that. Certainly, the availability of components and ensuring that inventory shows that the start of manufacturing is one of the biggest challenges our clients have faced. I believe it is, especially over the last few years.

Lisa Ryan: What are the most common mistakes manufacturers make in implementation?

Nick Foy: One of the most common mistakes we see is going too complicated, too quickly. We see clients with multi-level bills and materials: sub-components, sub-assemblies, et cetera. We had a client who we've helped get out with some of that over the last couple of months. We had an eight-level bill of material. And the reality is that it needs to be simpler for them to manage. All those sub-assemblies are part of a sub-assembly, part of another sub-assembly. And the poor operator on the shop floor is just; they're clicking buttons on the ERP. It's taking longer than it did to create the product. That's when you know you're in trouble. When the operators spend more time pressing buttons than they make the thing, you've gone to the too complex and too low level and your bills of material.

Lisa Ryan: How would they fix that if it was such a complicated process that they already have? How would they backtrack and get out of that?

Nick Foy: It comes down to which ERP system you use or the manufacturing system you use. Our system of choice is DU and with DU manufacturing. Rather than just a blunt bill of material or sub-assembly process, you also have a lot of other tools that are available to you, such as we can create different work centers to help manage that complexity. We can also create operational steps within manufacturing that can replace some of the sub-assembly processes.

So sometimes, it's about something other than dumbing things down. When I say about getting complex too soon, it's not about dumbing it down to say, let's have a single level and deal with everything offline. What it comes down to is you've got to use a myriad of tools available to you in your ERP to make the complex a lot more straightforward.

And rather than just seeing Bill's material as that, a blunt tool to fix that. There are a lot of other things in your ERP that are available to you to help fix those situations. This is where using a partner like what we do here at Silverdale becomes vital for these companies. Trying to do this on your own is problematic because guess what? You don't know what you don't know, or you don't see how other people solve This same issue, having a partner that you can call and say, Hey, Here's a problem I'm having. What do you think? And we can talk you through it.

We've got another client in a similar industry, hardware, with a similar challenge. Let us talk you through how we solved it for them and then set up a demo and a walkthrough and help the team to understand that it is an important part of what we do as a company and how would a company know if they weren't using an ERP system, how would they even figure out that, Hey, maybe this is something that I should look at or do things a different way that I'm doing.

Lisa Ryan: What would be some telltale signs?

Nick Foy: One of the very big telltale signs is a lack of visibility. If you have a sales team selling the product, they don't know the customer order status, especially when you've got custom-made products. I'm sitting in the car now. I've just finished another client who does one hundred percent of what they do is custom. Every single job, every single project is completely custom. Their problem was that the customer would call in and say, Hey, I'm just checking on the status of my order.

The problem is that they would have to call the customer then back. I don't know its status; I need to know the material availability. I don't know what's going on in manufacturing. I don't know the scheduled date. I don't know the ship date. And they'd have to call that customer back.

Now what they can do, Is immediately see, okay, yeah, great, I've got your order here. They call in, and we know who it is because of their telephone number. We can bring up their project and bring up the manufacturing order. We can see the status of the material and the scheduled date they're ready to do. Certainly, you are experiencing some of those types of issues. If you can't see the visibility of when things are happening or be able to answer those questions in a single contact or a single phone call with a client, then it's probably time to start doing that. If you've got a lot of work in progress. If you've got a lot of inventory and capital tied up in your whip, it's time to pick up the phone. As I like to say to people, implementing an ERP is never too early, but it's always too late. The best time to do your re-ERP implementation apart from today was yesterday. And it's never too early to start that journey.

Lisa Ryan: A lot of the show focuses on the workforce and creating that type of workplace culture, and we know that nobody likes change. When implementing a system, how do you approach change management for organizations now, especially if there may be some employee resistance?

Nick Foy: I don't know what you're talking about. That's what never happens. You never run into that. Of course, everybody buys into it right away. Everyone sees the panacea; everyone sees the oasis that we're selling. It's never an issue. Yeah, I've, of course, it's always an issue. The biggest way that we do that is spending time on site with the, not just with the client and not just in the boardroom. We spend very little time of our time in boardrooms. We spend a lot of our time on the shop floor understanding how things work today, but also explaining and showing and demonstrating what it will look like tomorrow.

And I know, I don't know what you're like, Lisa, but I know what I'm like If someone came into my workplace and started moving things around on my desk, put the mouse on the other side, put the webcam, underneath the monitor instead of on top. I'm going to be pretty pissed at that, and I want people to explain to me what the hell a benefit of that is.

I want the opportunity to have input. There's a famous saying, I can't remember who said it now, but I use that a lot, which is if you're going to change me, involve me. Okay. We're very big on being on the shop floor, showing people what's happening, and getting them to be part of that process as early as possible. This change is not something you can do to someone. Otherwise, it's a very negative experience. I am spending a lot of time on site, helping our clients with their change management process, creating that awareness, creating the desire from people on the shop floors. They say, oh, that's way better than these pieces of paper, or It's way better than me going to this whiteboard every five minutes to update the quantities, or whatever it might be.

It is creating that sense of awareness and desire. Give them good training outside the conference room, because guess what? Nothing's done in a conference room. But doing a training on the shop floor, creating a training environment inviting four shop floor operators to come and press buttons. Not being afraid of pressing the buttons. It's got to be a big hurdle for people when they see buttons that say, okay, cancel. Delete. Oh my God, am I going to delete the whole system? Getting people used to pressing buttons in a safe environment and helping them understand, you're part of a bigger picture here.

A lot is going left and right in what you're doing. And being on the shop floor during the go-live and the training and the support is incredibly important to be part of that team. We're very good at what we do. We spend much time engaging with the operators on the shop floor.

You'll regularly see us there in our blue shirts, on the shop floor, answering questions, helping operators, and getting to know them individually. In a lot of cases, everyone is in change management. Everyone does this at an individual pace. And you have to engage with individuals when you do this sort of thing. This is not something you can do in-mas. There are lots of tools and tricks that we have up our sleeve to make that happen. But, it's it is quite a journey, but again, it's a very individualized journey

Lisa Ryan: Do you have an example of a client that you worked with, like a before and after where the employees were fighting it, or they were just a mess, and y because of that process that you just shared, what the benefits were what the turnaround turned out to be to benefit that customer.

Nick Foy: Yeah. Yeah. I've got a goa couple. We have a client down in Georgia. They are manufacturing. They're a print company. They're manufacturing a lot of letters, postcards, and various other things on demand for some big nationwide entities. We spent a lot of time on their shop floor. Before the ERP, they had another system on the shop floor, but it wasn't available to the operators. They weren't using it for real-time updates on production. They had a wad of paper that would follow the order all the way through, through the shop floor, to make sure everything was accurate.

Now what we did is again, we spent a lot of time on that shop floor with the operator understanding, what they do today, how they do it today, and then showing them, for example, on an iPad, we put technology on the floor. We put some iPads on the floor that are not what they're now using to run their manufacturing operations.

What was interesting was showing them how easy it was to use. And I'll tell you, this is a big revelation for me. This first time on the shop floor with that client was about a year and a half ago when we first did that, and that was a. a big epiphany for me because it was fresh out of Covid.

We hadn't been on-site with clients for quite some time. And it was interesting that when we were on the shop floor, we gave them an iPad with a keyboard attached, thinking, okay, they're going to use that and do this. The first thing they did was touch the screen, and that was a big revelation for me that things have moved. People have shifted now to they're expecting to touch screens. They're not expecting keyboards and mouses on the shop floor anymore. The old ERP systems manufacturing shop floor systems were complicated and looked cumbersome.

You asked the question earlier about how you know when it's time to look at an ERP or look for a new system. If you've got keyboards and a mouse on your shop floor, you should replace them. There's no place for a keyboard and a mouse on the shop floor. And if you find yourself having to do that, you've got the wrong system. Things have moved on over the last five years. And if that's what your operators have to use, then it will not be intuitive, especially for this new generation of workers who are very used to touchscreens, et cetera.

This is a significant learning for me; it is that, wow, this world has moved on. That client spent a lot of time on the shop floor, getting them used to the workspace, also giving them some choice around, okay, where should we put this touchscreen? Should it be on the left? Should it be on the right? Should it be underneath? Should it be on top of here? And giving them some choice around their workspace as to, oh, that's the most convenient. Put it up here. Oh, great, fantastic. Let's put it here. It gives them this sense of involvement and part of that process.

We're not just going to stick it there, and it's that weird angle they can't reach or use easily. Certainly, doing small things like that makes a big difference when implementing this type.

Lisa Ryan: Yeah, and with Covid, the last couple of years, we've just, we've had no choice but to adapt to technology. Technology itself has changed to become much more user-friendly.

Nick Foy: Yeah. The shop owners think they have an older workforce, and these guys will never buy into this. They're not going to do it. It's no. They are. And, as you said, it's an expectation.

Lisa Ryan: I do the same thing. I immediately want to touch the computer, and it's like when people tell me, oh, you have to use the mouse. I'm like, what?

Nick Foy: Oh, absolutely. Yeah. We call it the official price screen. If it doesn't look like Fisher-Price. If it doesn't look like something you get on a kid's toy, then people aren't going to like it because they want big buttons. They don't want it to be difficult to right-click on something to make it go to the