2. Modifications May Lead to Extensive Delays and Decreased Production Value
Modifications to supply chain systems may cause extensive delays during selection, implementation, upgrades, and future integrations. If a problem arises, correcting a poorly designed or coded modification can take days or weeks, with no guarantee that the first fix is the final fix. These costs eat away at production value. During implementation, modifications are notorious for causing inventory discrepancies, mistaken shipments, and work stoppages that can damage your brand, cost millions of dollars, and result in decreased morale and turnover throughout the organization.
Tip: For any proposed modification, evaluate the annual savings against the vendor’s cost of the modification, the increased time to the implementation schedule, the resources that will be required to test and re-test fixes, plus the Net Present Value of doing it all over again every 4 years. If the savings does not significantly outweigh the costs, abandon the modification or delay it to a future project phase.
3. Customized Systems and Modifications Carry an Increased Risk of Problems
Customized systems and modifications have an increased risk of malfunction. Complex systems are not necessarily designed to be easily modified, so the best-laid plans may not work as anticipated. This is comparable to putting larger tires on a Jeep and then finding out that your gas mileage was reduced by 40% and the tires sometimes rub against the shocks (yes, this happened to me). The point is that the positive effects are easy to exaggerate and the negative effects are very difficult to predict. Implementing a new system is a major event for your company, so you should avoid making it more complex than it needs to be.
Tip: Compare and contrast previous modifications with actual results. Did the modification go smoothly, and if so, did problems arise at a future date? Also, how often did problems arise? Add these costs and issues to your analysis of proposed modifications.
4. Modifications Have Perpetual Costs
Modifications always come with added perpetual costs. The cost of modifying a system today might seem minimal, but when it comes time to upgrade the system, the modification must also be upgraded as well. In the realm of cloud-based supply chain solutions, upgrades are inevitable, and more modification costs will recur with all upgrades.
Tip: Map out the projected future upgrade timeline and assume your initial modification costs will recur with each upgrade. Consider the total cost of recurring modifications when evaluating the reasonability and need for modifications.