After the age of the craftsmen, when the Industrial Revolution began to pump out products in mass, time became a critical issue with regards to production in manufacturing. No longer could products be made according to an arbitrary or infinite time-frame for production. With the introduction of mass manufacturing, production mandates and quotas were increasingly created according to the notion of how much time it should take to make x number of items.

The idea gave rise to business efficiency theories and models such as Frederick Taylor’s time-motion studies in the early 1900’s, and Frank Gilbreth’s one best way production mode of scientific management in the 1950’s. (more…)

Cost accounting in manufacturing answers the simple question: “ Am I making money on this job, and if not then why not?”. Cost accounting is a bridge between financial and management accounting and is a technique used to address the demands of both. It is a systematic application that takes all events in the supply chain and translates them into financial values for analysis by various people both inside and outside the company operations. The most important results of the analysis are findings by which management can reduce manufacturing costs while improving profitability, especially in the multi-sequence operations of manufacturing.

While there are several ways to approach cost accounting (e.g., activity-based, throughput, etc.), the generally accepted accounting principles most in line with manufacturing operations are standard cost accounting and weighted average cost accounting. (more…)

Without a doubt, for manufacturers the biggest payback from computer and software investments is in the area of performance measurement. Such metrics allow management the ability to be flexible, to make better decisions about what will make an enterprise operate at the greatest level of efficiency.

Upfront efforts in the elimination of waste in all operations of the plant—from administration to shipping—results in greater sales levels, lower overall costs of operation, and shortened cycle times for inventory. Perhaps the greatest benefit of all from performance measurement is found in the maximization of human resources; that is, by adhering as closely as possible to standard costs for production.

As a tool for providing labor performance measures for manufacturers and job shops, (more…)

Synchronicity. It is something every organization hopes to achieve, but more often than not falls a bit short of attaining. When we talk about synchronicity we are speaking of principles of connection, where the parts work in total alliance with the whole.

Historically, synchronicity has been of particular importance in manufacturing where the quest is always for a seamless connectivity between product planning, product development, material sourcing, and shop management. Indeed, synchronicity in manufacturing is a direct result of the knowledge (data) that any one part of the system has about the whole facility at any one moment.

To achieve synchronicity in manufacturing, enterprise resource planning systems (ERPs) have been developed to integrate all data of an organization into a unified system. Typically, ERP systems use multiple components of computer software and hardware to achieve the desired integration of a manufacturing system. A primary part of most ERP systems is the use of a real-time, connected database structure to store information for use by the various system modules. (more…)

With ever-increasing movements in manufacturing toward a seamless integration of shop systems, enterprise resource planning (ERP) software has proven a viable solution to the problem of communication between departments.

The immediacy of graphically-displayed (GUI), real-time data available to operators at the touch of a finger functions to reduce the amount of time and paperwork necessary to make job production run smoothly.

However, one of the last vestiges of needless multilayer redundancy in the manufacturing system is shown in the very essence of the production system; that is, the conceptual and actual separations that exist in the engineering and manufacturing bills of material (BOM).

While there are, of course, different types of bills of material dependent upon the department that generates them and for their intended purpose, the similarities of ultimate purpose found in engineering and manufacturing BOM’s is the basis by which ERP seeks to their integration within the engineering/production process. (more…)

Getting the most out of what limited time a manufacturer has involves a strong sense of orderliness, as well as an awareness of the relationship of waste to productivity. This concept is especially true when considering the connection between the time an employee spends “on the clock”, and how much work he or she actually gets done during that time.

In the past, the problem of tracking employee time almost always involved the manual (paper-based) means by which such records were kept. However, today there is no better timekeeping tool for clocking on and off jobs than one in which the shop floor employee uses a Graphical User Interface (GUI).

Whether direct labor as value in actual production, or indirect labor cost through non-productive activities of employees, labor time is vital for the determination of the cost of goods sold (COGS). A virtual time and attendance workstation with a simple visual display, the user friendly GUI guides the shop floor employee when they input data associated with their ongoing job functions.

By monitoring employees, work centers, and/or machine production time in terms of being either on or off the clock, or at task on one or multiple jobs/work orders, the GUI is able to maintain an ongoing, real-time evaluation of productivity and plant work capability. (more…)

From the moment a purchase order is made by a customer, the clock starts ticking for the producer of the product they desire. For the customer, there is an expectation of delivery based upon criteria such as the importance of the need and a prior history of delivery time. On the other hand, for the manufacturer there is another expectation of delivery based upon completely different criteria such as the lead time given by the customer, materials inventory, and present/future work loads. Herein lies the friction that is often encountered between manufacturers and their clients when it comes to the concept of cycle time–the time it takes for a job to move from the sales order taken to a product shipped out the door. That is to say, in a world of shortened lead times and unforgiving expectations of on-time delivery and production perfection, how does a manufacturer reduce order-to-delivery cycle times while also maintaining quality? (more…)