Manufacturers no longer work in isolation from each other; rather, they usually exist as part and parcel of a large supply chain whereby the degree of success of one partner is driven by the reciprocal success of the others. Throughout the supply chain, the potential for downstream producers being flexible in their production activities means that unless you are equally dynamic you could easily lose the work as the upstream partner. This concept is more fully considered as customizability whereby operations must be (more…)

While certainly a modern business concept, agile manufacturing goes beyond simply being another version of 1980’s-styled computer integrated manufacturing or 1990’s lean manufacturing. Rather, agile manufacturing represents a complete shift in the mindset of production industries in the 21^st Century; one in which there is both a greater relationship between technology and worker skills, and greater customer access to, and demands upon, the core competencies of their manufacturers/vendors.

The basic concept of agile manufacturing is to develop what could best be called a nimble mindset when it comes to understanding market environments. In short, rapid changes in the market environment are not (more…)

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…)

Then, one day, you just happen through the front office and it’s as if you had been shot through with a bolt of lightening. All around you are the vestiges of what you had been trying to eliminate on the shop floor. Paperwork batches, duplicated efforts, long searches for missing or incomplete data in files. In short, while the company had considered no-stone-left-unturned in its quest for shop floor efficiency through enterprise resource planning, it had not completely considered the impact a wasteful front office would have upon the ROI. Indeed, front office waste is a considerable reason why many enterprise resource planning (ERP) implementations take longer than expected to complete.

What can you do to ensure a successful and quick implementation of your ERP software system, and maximize your ROI? See how process improvements can be made in the front office. Here are four helpful tips: (more…)

Take, for instance, the production of artificial heart motors. The motor itself is a relatively low cost production item that, when included in the whole package of the heart, adds a larger increased value to the finished good. Indeed, by definition value chain activities are designed to create value in a product that, hopefully, exceeds the cost of producing that value. The difference between the actual cost of producing the value and the added value amount itself is where profit is located.

Since the late 1980’s, these value-adding activities have included inbound logistics (receiving/warehousing/inventory), operations (production), outbound logistics (warehousing/fulfillment/shipping), marketing/sales (advertising/pricing), and service (customer support). For the manufacturer, any or all of the activities present opportunities for creating (more…)

By the volume of the protestations, it would appear that ERP implementation is nothing but trouble. However, it must be kept in mind that the old ’squeaky wheel’ adage rings most true here. That is to say, those majority of manufacturers that have little or no problems with ERP implementation are usually less vocal in public about their successes, while those that encounter difficulties are the first to complain.

What separates the successes from those less so? In a word: (more…)

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…)

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…)

Seemingly, your choices are quite limited to either the one-flavor-fits-all blandness of cheap prepackaged ice cream products that fall short of your taste needs, and the other that, while bells-and-whistles impressive, is more cost than your budget allows and far too much product than you can possibly ever consume.

Then, you spot just a little bit farther down what is, do doubt, your solution to this conundrum of ice cream extremes. It is a (more…)

With the complexities introduced through a more mechanized, large scale, robotic global economy in the 1950’s and 1960’s, as well as mandates from stockholders for more stringent (i.e., realistic) profits reporting during this time, a new way of assessing profit was born. It was called, cost accounting.

Cost accounting differs from financial accounting insofar as it is largely a much more formal mechanism by which costs of products or services are determined and controlled for efficiencies. This is achieved by (more…)