Taking a simple Sunday drive down a road through the countryside, there are many things you depend upon to get you where you’re going. Most are common to all drivers. You need good tires, windows, seats, perhaps an air conditioner, and certainly a solid body. These are the essentials that in various states of repair have little bearing on the efficient functions of the car by which it sustains forward motion. However, start talking about the engine these days and you’ll get an earful regarding notions such as fuel efficiency, pollution control efficiency, maintenance efficiency, and so forth. Less common from driver to driver, car to car, are the various types and conditions of car engines, but it is the engine upon which all drivers depend the greatest to get them where they are going. As opposed to seats and seat condition, a less efficient engine simply means a less efficient car.

In this same sense, manufacturers are very dependent upon each other to be efficient in their operations—your performance is often dependent upon the performance of your upstream suppliers, while downstream your customers depend on you for their own performance levels. It is a circuitous feeding chain that traditionally has relied up on the sustaining of on-hand inventories to keep ahead of demand. With the introduction of lean manufacturing came the elimination of large inventories and the need for greater (more…)

It’s a given that maintaining inventory is costly on many levels, the least of which is the notion of stagnant inventory and/or raw materials becoming obsolete before your very eyes. In working inventory control, there is often a fine line that marks the threshold between having too much on-hand inventory and not having enough to ensure on-time delivery. In the modern supply chain, planning for sourcing issues and automated purchasing puts manufacturers on better terms when it comes to real-time inventory management.

However, as lead-times become increasingly reduced and demand levels usually unpredictable from one month to the next, inventory management is integrally connected to the notion of profit margin. What is necessary is to begin thinking of the “inventory area” as a potential profit center itself—to optimize inventory so it works for you, and not against you.

Inventory optimization uses data that is connected to key interrelated factors that influence the efficient management of inventory. The point of inventory optimization is to (more…)

The greatest mysteries of the ancient world usually revolve around how something was made. The Pyramids of Egypt, Greek Parthenon, and Roman Colosseum are all immense structures that required organization and many associated industries for their completion. Chances are, though, the coordination and production requirements of these wonders of the world were not much different than what we expect today in modern manufacturing.

Then, as now, resource management included labor, materials, physical plant, and administration. The mystery, of course, lies in the question of how the sheer size of these projects and the resources they necessitated allowed for successful coordination. For example, the various data centers for the building of the Pyramids, like all other great ancient structures, were geographically dispersed with, of course, no form of immediate production communication available.

We also know that ancient productions were not lean operations, and the subsequent progression of manufacturing production technique moved very slowly over the centuries. The major change in production development from Dynastic Egypt to Depression America was in the capability of (more…)

What could be better than being just in time for somewhere you were scheduled to be or a task you had to do? That is to say, you were not too early on arrival, wasting valuable time standing around doing nothing. Nor were you too late to the task, not being able to complete on schedule that which you were asked to do.

In short, wouldn’t it be the best case scenario for you to produce the right task at precisely the right time to maximize both your time and productivity? This notion is the concept behind the philosophy of lean manufacturing referred to as “just-in-time”, or JIT production.

In JIT production, we are seeking to eliminate costs that add no value to the final product. It is certain that without critical thought applied to a manufacturing system as a whole, the potential for waste in process is heightened. These forms of waste can include (more…)

With the advancement of enterprise resource planning (ERP) in manufacturing, the turn was made by software developers to build a better way of maintaining inventory. In the past, inventory control was less “control” and more “guessing” as a result of delays in data entry. Before coordination through ERP methods, inventory clerks were ensconced in a paper-based systems that depended very much upon the completion and filing of paper-based inventory forms. Inventory dispositions were often not completely known for 24 hours or so—if ever.

When poor inventory control is combined with poor management in other aspects of manufacturing (selling, purchasing, scheduling, production, shipping, etc.), the results can be disastrous. Indeed, for any defined trading period, it is vital that (more…)

Procurement in manufacturing involves many processes. From the generation of a sales order, a whole host of processes kick in to begin the production movement through the plant in, hopefully, the most efficient way possible.

Along with vast improvements in shop floor machinery efficiency and automation over the past decades, highly efficient enterprise resource planning (ERP) software systems have been introduced to help automatically control system flow—particularly requisitions. This is the new reality in manufacturing, despite the reluctance of some to change and profit from the movement found from being online and on time through ERP.

Streamlining requisitions through automated ERP applications satisfies the most necessary of manufacturing operational goals—the need to be convenient. In the more robust ERP software systems, the complete supply chain is at the fingertips of the purchasing manager. Critical real-time and historical information for raw materials and parts needed for (more…)

Why take ten steps to do something, when you can do the same thing in two? It seems such simple logic, yet in manufacturing today there are still some companies that insist on maintaining the old, anachronistic, handwritten ways of purchasing material for the shop.

However, to overcome deficiencies found in the old paper-based ways of purchasing, manufacturers are now utilizing enterprise resource planning (ERP) software systems that employ autopurchasing modules that meet the needs for speed (and savings) in the manufacturing operation.

Such autopurchasing modules read the inventory system, scanning the inventory master for every part and looks for opportunities to both refresh inventory and take advantage of quantity discounts.

Many manufacturers have taken to heart the notion of demand driven purchasing whereby raw material/parts acquisition is a result of orders pulled from the client. That is to say, in lean enterprises requisitions are made not from forecasting models, but immediately as a result of (more…)

In today’s increasingly competitive manufacturing environment, where tightened margins mean tightened grips on waste, running lean inventories is the name of the production game. Materials management is now the art of balancing production scheduling with inventory acquisition—tasks often performed by personnel with varying degrees of responsibility.

In large industrial organizations, the specialization of materials management has resulted in distinctions often drawn between the work of a buyer or purchasing agent and that of a purchasing manager.

While purchasing agents commonly focus on routine purchasing tasks, purchasing managers usually (more…)