Book Reviews

ERP Tools, Techniques, and Applications for Integrating the Supply Chain

by Carol A. Ptak, CFPIM, CIRM, Jonah, and Eli Schragenheim
Copyright 2000 CRC Press, LLC (St. Lucie Press), Boca Raton, Florida.

Reviewed by Sandy Friedman, CFPIM, CIRM

If anyone were to write about everything there is to know about ERP (Enterprise Resource Planning), it would have to be Carol Ptak. Ptak is fully certified by APICS at the fellow level, and has earned the “Jonah� certification from the Goldratt Institute. Ptak is the incoming president of APICS Society, and was our guest speaker at this year’s LAPICS Board Installation banquet held last summer. Ptak has built a life-long career around manufacturing education and consulting, and brings a lot of ammunition to the subject of ERP, Supply Chain Management, as well as Production and Inventory Management.
Her new book presents a comprehensive overview of the entire APICS body of knowledge, focusing specifically on the seven current CPIM modules, and encompassing some of the major key issues from the CIRM program, e.g., product design and development, Product Data Management (PDMII), configuration management, cost accounting and financial management, ISO9000, and enterprise-wide management. Although focused on manufacturing, the material in this book is also suitable to non-manufacturing environments such as logistics and distribution.

The book begins with a history of ERP, beginning with the first MRP computer programs written in the 1950s by IBM. Ptak’s well-known sense of humor is pervasive: “In the beginning, there was inventory, and it was good!� Ptak cites such well-known authors as Oliver Wight, Joseph Orlicky and George Plossl, among others, as being the “forefathers� of ERP. The book continues with discussions about: Theory of Constraints (TOC), Optimized Production Technology (OPT), Drum Buffer Rope, Supply Chain Management, Sales and Operations Planning, MRP and CRP, Shop Floor Control/Manufacturing Execution Systems (MES), Just In Time (JIT), warehouse management, Distribution Requirements Planning (DRP), and Facilities Management.

Throughout the book, Ptak emphasizes the importance of education at all levels of the organization, as well as communication and schedule-sharing throughout the supply chain from the “customer’s customer to the vendor’s vendor.� When describing the dichotomy between indigenous business practices and industry best practices as embodied by most ERP systems, Ptak acknowledges, “If every company purchasing the system changes their processes to match the software, then upon which process will the enterprise distinguish itself for competitive advantage?� Ptak also describes reasons for ERP implementation failure. Lack of education, scope creep, failure of top management to provide leadership or follow-through, assigning blame should something unexpected happen, and lack of management support, all contribute to the lack of success.

The last third of the book concentrates on system selection and implementation issues, including data accuracy, top management support, education and training, project management, and using a team approach to problem solving. Ptak says that the goal should be to improve overall business processes, not just replacement of the computer system. In writing this section, Ptak is not afraid to confront contradictions: “The inclusion of industry best practices in the ERP software provides guidance to the company in their implementation process to identify those practices that need to be changed. The downside of this approach is that the company has developed unique competitive advantages over the years and to abandon these to embrace industry best practices may actually result in a disadvantage in the marketplace… The ERP implementation cost is significantly reduced if the company will change its practices to fit the software. However, this may be exactly opposite of the desired competitive strategy for the business.�

The book also includes a CD-ROM containing a sample ERP program, “Management Interactive Case Study Simulator,� written by Eli Schragenheim, which illustrates many of the concepts described by Ptak throughout the book. The program was designed for classroom education, but serves well as a demonstration of many of the concepts introduced in the book. With patience and perseverance, it was possible to run the tutorial and illustrate such concepts as capacity planning, finite backward scheduling, and return on investment (ROI). One of the strongest points of the program is the demonstration of ROI of an installed ERP system, something that few ERP implementations calculate correctly, if at all.

Ptak offers a fresh approach to old standard materials and has made them more relevant to today’s economic environment. Although this book is intended as an educational tool and reference guide for practitioners who are about to be engaged in an ERP implementation, I find it difficult to recommend this book as a stand-alone resource for implementation, business process redesign, or even for CPIM or CIRM certification preparation as it is too general in nature. Ptak’s recommendations for effective implementation are essentially straight out of the APICS body of knowledge. While there is nothing wrong with that, the book should have focused more on real-world examples of successful as well as unsuccessful implementations to illustrate just how the concepts were employed. Some new important concepts such as Advanced Planning and Scheduling (APS) were barely mentioned in the book.

Despite its shortcomings, I recommend this book for anyone who needs to quickly gain a broad introduction to supply chain management, manufacturing management, and system implementation methods, and recommend that this book be the starting point for a more in-depth educational process.