The Hidden Costs of Obsolescence, Misused Metrics, and Misaligned ERP

Unknown Obsolescence Is a High-Risk Blind Spot

I’ve walked through dozens of manufacturing plants across North America—and one of the first questions I always ask is:

“Do you know the state of your control systems?”

In 90% of cases (and that’s conservative), the answer is unclear.

Engineering and maintenance teams are doing everything they can to keep the plant running. They don’t have time to migrate legacy systems or build a risk register for obsolete platforms. But that’s exactly what makes it dangerous: you can’t manage what you don’t know is failing or might fail shortly.

The result?
Costly unplanned downtime, frantic calls to find someone who still understands that 20-year-old PLC, and days of lost production because the OEM is out of business or the firmware can’t be recovered.

Here’s what I usually recommend:

• Start small. Pick one line or system and document its current state (platform, firmware, support status).

• Build a time horizon. What needs attention in 6 months? What’s critical within 3 years?

• Plan the contingency. If this fails, who can fix it? What’s the lead time on replacement parts? What’s your temporary workaround?

Facilities that think through these questions—even partially—are miles ahead of the ones that don’t.

This isn’t about fear—it’s about readiness.

DDS: The Most Underrated Practice on the Plant Floor

One of the most impactful — yet often overlooked — manufacturing best practices I picked up during my time at Procter & Gamble is something deceptively simple: Daily Direction Setting (DDS).

At its core, DDS is a short, structured meeting (no more than 10 minutes) held at the shift change. The goal? Ensure clear communication between the outgoing and incoming crews. But here’s where most plants go wrong: their shift meetings lack structure, focus, and impact.

A proper DDS isn’t just a casual chat — it’s a critical handoff that covers:

• Unresolved issues from the previous shift

• Priority focus areas for the next shift

• A snapshot of the current state of operations

If your facility doesn’t have something like this in place — or if your current pass-down process feels like a checkbox exercise — this is your sign to reboot it.

Start by defining a few clear ground rules:

• Keep it short and on-point

• Focus on facts, not opinions

• Document recurring issues

• Assign follow-ups where needed

Don’t expect transformation overnight. But as your teams get better at articulating the right problems, they’ll also get better at solving them.

Change in manufacturing is never easy. It takes time, consistency, and reinforcement. But if you encourage your team to keep showing up, keep refining, and celebrate even small improvements — the impact will follow.

Do You Really Know What Your OEE Is Telling You?

OEE — Overall Equipment Effectiveness — is one of the most referenced metrics in manufacturing. Every operations dashboard has it. Every vendor claims to help you improve it. Every consultant can explain the formula. But here’s the hard truth I’ve seen in the field:

Most facilities don’t actually use OEE to make better decisions.

In far too many plants, OEE becomes just another number to report. The data gets collected, someone builds a slick-looking dashboard, maybe leadership tracks it monthly… and that’s where it ends. The problem isn’t that people don’t know what OEE is. It’s that they don’t know how to apply it in a way that drives real action on the floor.

Let’s break down a few hard-earned lessons from facilities that actually use OEE effectively:

1. Stop Comparing Apples to Oranges

Yes, OEE has a formula — Availability × Performance × Quality — but there’s a lot of subjectivity baked into how each of those terms is defined. What counts as “planned downtime”? Do micro-stops count? How is “ideal cycle time” calculated? Are defects measured at the machine level or after rework?

If you’re benchmarking your OEE against another plant, or even another line within your own facility, you better be sure you’re speaking the same language. Otherwise, the comparison is meaningless.

2. Understand What’s Behind the Number

A low OEE might look like a performance problem, but it’s often just a scheduling or materials issue. I’ve walked into lines with a 48% OEE — and everyone assumed the operators were underperforming. In reality, they were waiting half the time for upstream supply.

If you treat OEE as a verdict instead of a clue, you’ll jump to the wrong conclusions and waste time fixing the wrong problems. The metric itself is only useful if it sparks the question: “Why?”

3. Focus on the Bottleneck First

In high-speed lines — think packaging, bottling, filling — there’s usually one piece of equipment that dictates the rhythm of the entire system. If that filler goes down, everything backs up. So why are so many teams measuring OEE on every piece of equipment with the same weight?

Your improvement focus should start with the bottleneck. If you’re not protecting and optimizing that core asset, the rest of your line’s efficiency won’t matter. Don’t spread your resources thin trying to bump OEE from 94% to 96% on a low-impact machine. Fix what’s blocking throughput first.

4. Don’t Stop at the Surface

The most dangerous trap is treating OEE like a dashboard KPI — something to be observed, not interrogated. I’ve sat through production meetings where everyone agreed a machine was the issue… but no one could say whether it was due to jams, operator interventions, tooling issues, or bad changeovers.

If your OEE conversations don’t go deeper than the number, you’re not doing analysis — you’re just watching a scoreboard.

Bottom Line

OEE only becomes valuable when it leads to insight, and that insight leads to action.

Don’t let it be a vanity metric. Challenge your team to explore what’s underneath. Focus your attention where it moves the needle — especially at your bottlenecks. And most importantly, use OEE as a way to ask better questions, not just display prettier charts.

You’re Not Just Running a Line — You’re Managing Capital

Nearly a decade ago, I was working with a director of manufacturing as we whiteboard plans for a brand-new facility — a $40 million expansion aimed at quadrupling production capacity in one of their key product segments.

As we were discussing the layout and asset selection, he paused, turned to me, and said something that changed how I think about manufacturing forever:

“Vlad, a manufacturing company operates like a bank.”

He continued:

“I have to pitch capital projects that return more than just their cost. The company — the ‘bank’ — isn’t looking for average returns. It’s looking for investments that outperform the market, reduce risk, and offer a clear payback. My job is to find those opportunities, execute them well, and prove the return — so the bank trusts me with the next big loan.”

That conversation stuck with me. And the more experience I gained across facilities, the more I saw the truth in it.

In manufacturing, capital is your currency — and ROI is your credibility.

Every initiative, whether it’s a new piece of equipment, a software upgrade, or even a headcount request, is a loan. And someone — usually several layers up — is evaluating whether the return justifies the spend. Even if you're not in the C-suite or pitching $40 million projects, you’re still operating within this system.

The question becomes: Are you creating value that justifies the investment?

I’ve learned to constantly assess:

• Is my department delivering measurable returns?

• Are our projects solving problems that matter to the bottom line?

• Can I justify my own role in terms of contribution to throughput, cost savings, or risk reduction?

Whether you’re on the plant floor or in a strategic role, this mindset is powerful. It shifts your thinking from “doing the work” to “creating value.”

So here’s the challenge:

Start seeing your decisions through the lens of a portfolio manager. Ask yourself — if the company is the bank, are you a worthy investment?

Beyond the Software: What Manufacturers Miss About ERP

We spent March on Manufacturing Hub diving deep into ERP — and I came away with a radically different perspective. ERP is one of those topics that can seem dry on the surface, but when you talk to people actually implementing, fixing, or surviving these systems… you realize how critical and complex it really is.

1. ERP Isn’t Just About the Software — It’s About People, Process, and Strategy

We kicked things off with Elvis from Talan, who brought the consulting lens to ERP. What stood out to me in that conversation is how often companies treat ERP like a purchasing decision. “Which modules do we need?” “Which vendor has the best UI?” But those are the wrong first questions.

The right approach is to start with business architecture: What are the processes you're trying to support? How do different departments operate? Where do they need to go in the next 3–5 years?

Elvis talked about how critical it is to take a cross-functional view. When ERP transformations succeed, it’s because they align IT, finance, operations, and leadership under a shared roadmap. When they fail? It's usually because those groups are solving different problems with the same system — and no one's talking.

It reminded me that ERP is a mirror. If your company has silos, broken processes, or unclear accountability, your ERP will reflect that. And no software vendor can fix it for you.

2. ERP Projects Fail When They Ignore the “Soft Stuff”

Tim Brown brought the global enterprise lens to the conversation. He's led ERP rollouts across continents and post-acquisition integrations where entire tech stacks had to be consolidated under insane timelines.

What really stuck with me from Tim’s insights was this: the riskiest part of an ERP implementation isn’t the system — it’s the people. Culture, trust, internal politics, and change fatigue derail more projects than bad code ever will.

He told stories where the ERP rollout technically worked, but the people didn’t buy in. That leads to shadow systems, spreadsheet workarounds, and eventually a new “transformation” project 3 years later.

Tim also brought up something that doesn't get talked about enough — embedded AI in modern ERP systems. These features promise automation, forecasting, optimization. But if you don't have strong process ownership and governance, you're just automating confusion. His takeaway? Get your house in order before you give it a self-driving mode.

3. ERP Fatigue is Real — and It Hits Ops Teams the Hardest

The third conversation with Glenn gave me a glimpse into something a lot of people feel but rarely say out loud: operations teams get the short end of the stick in ERP projects.

Glenn has worked closely with enterprise asset management (EAM), and he walked us through a pattern I’ve seen too: ERP implementations start with big ambition, big energy — but once finance and HR go live, the rest of the org gets told, “maybe next year.”

That means maintenance, production planning, and shop floor teams are stuck trying to bolt on their needs after the fact. The tools don’t fit. The processes aren’t mapped. The user experience is garbage. And then leadership wonders why no one uses the system.

Glenn’s advice? Bring in OT early. Build in contingency for fatigue. And understand that if you want operations to succeed in ERP, you have to plan for it like it’s core to the business — not a “Phase 2.”

4. For Machine Builders and Integrators, ERP Must Fit Your Workflows — Not the Other Way Around

Our final ERP episode with Jay and RJ from Total ETO was a perfect way to wrap. They brought us into the world of engineer-to-order (ETO) businesses — machine builders, custom fabricators, and system integrators. And if you’ve ever worked with those companies, you know that traditional ERP just doesn’t cut it.

The biggest issue? Flexibility. These companies are constantly revising BOMs, customizing specs, and integrating customer-specific parts or software. Standard ERP systems — especially those designed for repetitive discrete manufacturing — can’t handle that level of fluidity. So what happens? Teams fall back to Excel. Again.

What Total ETO has done is flip the model — they start from engineering and build the ERP around that workflow. For example, they connect directly into CAD systems, they allow for version-controlled BOMs, and they tailor the UI for people who actually do the work.

Their insight was simple but powerful: ERP needs to serve the business — not force the business to conform to ERP. That’s especially true in niche industries, high-variability workflows, or project-driven operations. A one-size-fits-all ERP approach just won’t work there.

Final Thoughts on ERP

If there's one lesson I’m taking with me from these conversations, it’s this:

ERP is not a system you install. It’s a transformation you lead.

You need a clear process strategy. You need executive alignment. You need to understand your edge cases, not just your core workflows. And you need to give just as much attention to people, change management, and governance as you do to licenses and timelines.

The companies that treat ERP like a strategic initiative — and not just a software rollout — are the ones that win.

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