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

Functions where Real-Time Integration is Critical

Estimating / Sales and Scheduling

 Today, more than ever, the Real-Time FUnction areassuccessful manufacturer has to provide more than the lowest price, or the best quality.  The key to beating the competition lies in total service of your customer’s needs.  Competition demands that small manufacturers quote accurately up front – not just costs, but delivery.  If you are processing 150 – 200 quotes a month, can you hang your hat on the dates you are giving customers?  An ERP system that can account for real-time shop conditions to provide ‘what-if’ delivery dates is essential for you to gain a competitive edge.

This type of view must consider the routings and bill of material in the what-if, load that against current shop load through the routing, and provide you an accurate Promise Date, plus provide visibility as to where bottlenecks might exist if the order is taken.  Only with this data can you quickly decide if the order is doable – or tell you where on the shop floor you need to focus your attention if the what-if does not line up with the customers requirement.  Even if the what-if misses your customer’s date, you may very well take the order, but it is imperative that you know where the bottlenecks will exist.

Ideally, this what-if estimating system would be integrated all the way through to the shop floor, so that major changes that occur throughout the day (machine-down, order cancellations) can be factored into customer promise dates as they occur.  Orders you have lost in the past because of outdated information might be won with this level of integration.

Production Planning and Inventory

Planning production orders requires accurate inventory levels to ensure production proceeds without interruption.  Time-phased item availability is critical to easily see the correct sequence that inventory will be consumed in.  Scheduling and dispatching decisions must be implemented in real time to maintain the correct sequence.  Only when these functions are in harmony can you arrive at an accurate picture of inventory.  In addition, reducing the transaction load on operators to process material issues will increase operator efficiency, while increasing inventory accuracy.  This means that automatically invoking material picks based on assembly part movement can eliminate extra transactions for the operator (increased efficiency), increase inventory accuracy, and provide the front office real-time inventory upon operator clock-out or quantity movement.

Purchasing and Production Planning

One of the most common problems with many ERP systems is a disconnect between Production Planning and Purchasing.  Many small companies rely on spreadsheets with data extracts of job and material data (which are obsolete upon extraction) to manually line up materials for Purchasing.  Often, purchases are made without the knowledge that the same item is required on multiple jobs at the same time, and multiple buyers purchase materials blind to this overlap, causing loss of volume pricing and duplication of effort.

Scheduling, Front Office and the Shop Floor

Small, make to order manufacturers live in an increasingly dynamic world.  Work center dispatch lists have to be communicated throughout the shop, while schedule changes occur constantly.  Estimating needs to provide your customers accurate promise dates, and Expediting needs to find the order on the floor – Now!

Real-time shop floor reporting is a critical asset in the battle to keep up with your customer.

As the scheduler manages the machine queues throughout the day, understanding common processes that might share resources, and quickly grouping these processes can save hours a week on the floor.  Having the ability to quickly move and firm schedule changes, then push those changes out to the work stations instantly and paperlessly can give you a competitive edge.  Your ability to respond to your customers would improve dramatically.

Shop Floor and Sales / Expediting

As work is reported off of work stations and moves through the shop, only a real-time reporting process can provide you the visibility to instantly locate work on the floor.  In addition, real-time reporting tied to your scheduling engine should enable you to identify jobs and processes trending out of control, as it occurs, instead only after the job is already late.  This type of visibility is priceless in the world of make to order manufacturing.


In conclusion, real-time capability is an integral part of an effective ERP system.  Although the term is used in varying contexts, true real-time capability means your system updates information throughout the entire enterprise instantaneously.  Benefits include greater flexibility, control, and visibility for manufacturers, and it can greatly reduce wasted time and resources.   The specific functions of real-time provided above will offer points of reference as you search for a system that includes real-time.

Key takeaways in these areas include:

  • Estimating / Sales and Scheduling – the ability to accurately estimate delivery time, even identify potential bottlenecks before the order is even taken
  • Production Planning, Scheduling and Inventory – Ensuring inventory is being used in the most efficient manner, and is only pulled at the appropriate time
  • Purchasing and Production Planning – Is the company buying the right material with a single lookup that accounts for all jobs for a material
  • Scheduling, Front Office and the Shop Floor – Have the flexibility to quickly change priority and communicate those change electronically, in real time, out to the operator stations – no paper dispatch lists to walk out to the floor.  Work reported complete reflect in front office tracking instantly, while estimating can do what-if promising based on up to the second status.
  • Shop Floor and Sales / Expediting – Find the position of any job on the floor instantaneously
Written by Ken Hayes, CPIM & APICS Certified, VP of Product Management
Formatted & Posted by Jason Rourke, Director of Marketing
ProfitKey International
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