Empowering Manufacturers to Deliver Quality Product, On-Time (Part 1 of 3)

The Benefits of an Integrated, ERP, MES and Scheduling Systems

Much is made these days of the Global, Interconnected world we live in, from Social Media to Smart-phones, but how interconnected is your own shop?  Does purchasing know that Sales booked a bluebird, and materials are not available?  Can the shop floor personnel have a schedule change at their station communicated instantly from the front office?  How many separate spreadsheets does it take for you to run your plant?

Many manufacturers have implemented ERP (enterprise resource planning) software systems with the hope of improving their ability to deliver a quality product on-time, while maintaining manageable inventory levels.  In an effort to save money, many companies purchased an entry-level ERP system that might manage inventory, or provide a particular focus for a given industry, but over time these systems have been outgrown as these companies face ever-increasing pressure to deliver on-time, improve quality and reduce prices.  

A basic system that provides order processing, inventory management, purchasing and accounting functions cannot provide accurate visibility into real-time shop floor conditions and their impact on customer deliverables.  Likewise, without real-time feedback from the shop floor, the organization cannot see what capacity actually is throughout the day, so new order delivery estimates are hopelessly inaccurate.  To make matters worse, many companies have tried to work around these limitations by creating multiple (dozens of) spreadsheets that carry duplicated and disconnected data.  This causes an extraordinary effort to answer a simple question like ‘do we really have the material to make this job?’

As the demands for ‘better, faster, cheaper’ place more pressure on these manufacturers, the need for an up-to-the-minute view of inventory status, allocations and shop floor capacity becomes critical, as it not only ensures an accurate available to promise for the customer, it also has a dramatic impact on cash flow in the organization.  Timely purchases that consider all current demand allow the manufacturer to make more efficient use of materials, while purchasing exactly what is needed at a better price.

Scheduling is more critical than ever for the small manufacturer, as charges for shipping errors and late orders can add up fast.  Providing up-to-the-second dispatching to the shop floor will ensure the most efficient use of equipment, while freeing the decision makers up to deal with more pressing issues instead of running ‘dispatch lists’ out to the floor.  Knowing the right job to process on a given piece of equipment is essential to avoid these financial penalties.  In addition, providing the estimating department a real-time view of material and available capacity can mean the difference between winning and losing the job, or winning a job that never has a chance to ship on time. It is essential that Estimating is aware of potential bottlenecks up front.

One other important aspect to consider should include shop floor transaction handling, or MES (manufacturing execution system).  For instance, a real-time inventory pick system, possibly bar-coded, is a good improvement, but it still requires an operator leave their station to process the pick.  By combining cellular inventory locations with part picking based on assembly flow, inventory could be updated in real-time, accurate and only require the operator to report the assemblies complete at their station – no pick would be required at all.

The next entry will discuss what it means for an ERP system to be considered functioning in “Real-Time”.  The conclusion of this series will get into mission critical situations where the two combined can be vital to the success and growth of any manufacturing company or job shop.

Written by Kenneth Hayes, CPIM & APICS Certified
Formatted and Posted by Jason Rourke
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One Response to Empowering Manufacturers to Deliver Quality Product, On-Time (Part 1 of 3)

  1. Pingback: Empowering Manufacturers to Deliver Quality Products, On-Time (Part 2 of 3) | Navigating Manufacturing ERP

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