May 11, 2016
(In the voice of the late Andy Rooney) “Did you ever wonder why clothes never pick themselves up off the floor?”
I have a degree in mechanical engineering, and though I’ve spent the better part of the last two decades working with ERP software, it seems I’m an engineering nerd first and software geek second. Sometimes that engineering nerd leaks through when working with ERP software.
Many times over the last 20 years or so, I’ve encountered the Second Law of Thermodynamics in action. What does that have to do with ERP systems? It’s actually a great analogy to what I observe time and time again.
The second law deals with Entropy. Entropy can be defined as a property of a closed system and is a measurement of the amount of disorder in the system. Organized = low entropy. Chaos = high entropy. My wife’s closet = low entropy. My basement shop = high entropy. The second law says, left to itself, the entropy in a system will either stay the same or it will increase (become more disorganized). It never decreases by itself. In order to decrease entropy, you have to add work.
You see this all the time. A common example is adding some sugar to a beverage. It may sink to the bottom at first, but it will eventually dissolve, becoming diffused through the beverage. It has gone from an ordered state of a solid to a less ordered state of a solution. The sugar will not, by itself, “un-dissolve” to the bottom of the glass again. If you want to get the sugar out, you will have to do work.
You see it every day next to the kitchen sink as dirty dishes, or the clothes on the floor in the kid’s bedroom. Or the autumn leaves in the yard, or the general state of the garage. Entropy is all around us, and it’s always increasing unless we work to reverse it.
I see this also applying to ERP software. ERP software is all about making order from chaos. It allows organizations to know the financial position of the company, or the state of inventory in the warehouse, or the planning of materials in manufacturing. Companies see features like locations in warehouses, or item lot control, or multi-dimensional accounting; and they think they can get better control over their business processes. And they can. But they forget that they are trying to reverse entropy and that requires work.
ERP systems promise to make it easy to add control. Just create locations in the warehouse so everything has a place. Or add commodity codes to the part numbers so you can report on them. Or have a gazillion ledger accounts to track the most minute cost. If that is what your business needs, great. But regardless of what the ERP system promises, remember that essentially what you are asking for is a reversal of entropy. If the organization is not willing to put in the work to maintain the commodity codes, or mapping costs to ledger accounts, or making sure everything is in its place in the warehouse; you can actually end up with more chaos.
When implementing ERP systems, or any system for that matter, organizations should think about the effort required to maintain that system and if they are willing to expend the effort and define who is responsible for the effort. I have seen many instances where an organization decided to put a control in place, but never assigned responsibility or allocated the resource to maintain it, and as a result ended up with more entropy than when they started.
Entropy… it’s so prevalent we don’t even notice it unless we think about it. But when it comes to ERP systems, we need to be mindful of it when making configuration decisions.