On-time delivery doesn’t happen on it’s own; rather, it’s the result of considerable planning, production, and accounting in the manufacturing process. As well, improved service levels means more repetitive business coming from continuously satisfied customers. In other words, predictability and repeatability allow manufacturers to more accurately forecast the economic, material, manpower, and production yields that make a company grow strong and regarded well by others in the supply-chain and the marketplace.

Planning, production, and accounting in the manufacturing process are intentional, and their validity and repeatability are paramount for prosperous growth. To the degree that these variables can be controlled, a robust enterprise resource planning (ERP) software system should be well-suited to managing such material and production variability as well accounting for raw materials and finished goods in the manufacturing process. ERP is the application in discrete manufacturing that helps make production jobs highly predictable and repeatable.

The primary reason for this is that discrete manufacturing, especially in sub-assembly and continuous assembly production, often has a …Read the rest of this entry »

It is axiomatic that all enterprise resource planning (ERP) systems are not created equal. Some are quite industry specific, while others might be application specific. Some might have very narrow capabilities, while others might be designed for generic purposes across a broad array of industries—everything from thermoform plastic pressing to the greens-keeping of sporting facilities. Furthermore, with decades of maturity behind the concept, ERP has moved beyond just being a means to facilitate discrete manufacturing, but now is used to optimize process manufacturing and various hybrid systems that blend discrete with process.

Therefore, questions invariably arise when trying to determine the ERP system best suited for the type of manufacturing operation that needs it. Normally, the functional capabilities of a discrete-oriented ERP application are inherently different than those of either a generic or process-oriented ERP application. Knowing the differences in the two can often make the difference between positive returns on the software system investment and the creation of significant risk and taxing overhead costs because of it. For example, do you know the …Read the rest of this entry »

In the first part of our two-part series on improved pricing models for manufacturers, we introduced the notion that pricing is an area where shrinking margins can be countered. Insofar as traditional qualitative methods for pricing are unable (or unwilling) to control for supply-chain and customer variables, as well as automation, most approaches end up being manual and/or ad hoc. Simply put: These approaches have minimal chances of producing maximum margins.

To achieve a more precise pricing scheme, manufacturers must employ quantitative pricing methods that overcome the challenges found in modern production. Doing so means making pricing decisions based on business intelligence—not business guesswork. The process of quantitative pricing begins by first recognizing what is working and not working with regards to methodologies, then deciding to take the pricing task to a more formal level that is informed by a variety of data.

First, it is vital to realize that ad hoc pricing facilitates price differentiation; that is, diversified manufacturers typically have extensive product portfolios and very sizable customer bases, and therefore …Read the rest of this entry »

With increasingly unpredictable costs for raw materials, energy, and even capital acquisition, manufacturing today is a volatile, roller coaster ride filled with peaks and valleys. Manufacturers face a vast array of complex challenges including intense competition, increasing costs, and accelerated product life cycles. It is true that to, some extent, technology investments in enterprise systems such as ERP, MRP, and CRM have helped to control operating costs and increase corporate agility.

However, as adoption of these capabilities has spread to the point of producing something akin to a parity of efficiency in manufacturing, they can dilute gains in competitive advantage. What is important to realize is that the resulting quantity and quality of data produced by ERP systems have set the stage for business intelligence applications that leverage such data to analyze and optimize business performance in areas other than the shop floor.

For example, consider what competitive advantages can be built around the notion of pricing. Using data to derive customer segmentation and optimization models can recommend prices that are much more profitable than those currently in market. This is a pricing science that can be easily …Read the rest of this entry »

Chefs use them. Artists use them. Manufacturer and job shop project managers use them, too. When you have a project involving any number of materials or other physical elements, having a complete listing of those materials, ordered in some logical way, is a helpful tool to stay on-track and on-schedule throughout the production process. For chefs, having the recipe lets them know what material they need to complete a dish, and what materials to order should they be out of certain ingredients-as-inventory. For artists, the requirements to stretch, prime, and paint the canvas involve considerable forethought regarding material and material costing.

For manufacturers and job shops, the Bill of Materials (BOM) provides a complete listing or set of the physical elements needed to produce or otherwise service a product. BOM requirements dictate that all elements be included in order to provide not only an accurate cost accounting of the materials, but to ensure that parts, assemblies, and services are done with quality in mind.

To bring ease of understanding to the material requirements found within the BOM, it is formatted in such a way that each element (i.e., raw materials, parts, sub-assemblies, etc.) is clearly broken out and indented down to …Read the rest of this entry »

A project, by the very definition of the term, is all about parts. Parts considered, parts acquired, parts assembled, parts finished. In a job shop or on a manufacturing floor, a project usually involves another aspect—people. In a shop project, people work as a team to compete a task that, ultimately, is greater than the sum of its parts. The questions to consider, however, are how often do shop projects end up as unsuccessful, and why? With so many people contributing to the cause, it should be a matter of fact that projects would succeed merely by virtue of having so much oversight.

This is not always the case; indeed, shop project success is probably more infrequent that you would think. Of course, most project failures are unnecessary and avoidable. Common to nearly all such failures is the absence of good planning, preparation, and communication among team members. Assuming material resources and financials are already in place, to avoid missteps and achieve success in shop project efforts there are a few simple management tools that can help.

Surprisingly, in many shop project failures it is clear that many team members are on separate pages about the ultimate goals, specifications, and even products of the project. Like a theatrical production without a script, improvisation during performance is mistake-laden, often lacking …Read the rest of this entry »

We all go into business with the idea of providing a quality product; otherwise, what’s the point? Pride of production in meeting or exceeding customer expectations is the measure of our performance as conscientious manufacturers or job shops. And, while our success in being able to produce a quality product time and again is the reason for the growth of our business, we also understand that we must continually improve if we are to remain competitive. This is why we set out plans to ensure quality.

Once we’ve set the standards for achieving quality in reoccurring work orders, sustaining quality is usually a simple matter of the spot check or routine inspection. However, shop projects, by their idiosyncratic nature, bring about their own unique criteria for what is meant by a quality outcome. Therefore, in any shop project, a Quality Plan specifically designed for that project should be written. Such a plan takes into account not only what standards are to be met in the project, but by what measures and methods of measure (the metrics) these standard will be ascertained.

The thoroughness in the preparation of a Quality Plan is what is meant by the term quality assurance, and it is here where the shop in general, and the project team specifically, hang their hat in terms of customer satisfaction. Furthermore, you may also find the more robust enterprise resource planning software systems (ERP) will contain modules that …Read the rest of this entry »

So, you’ve decided to take the plunge and purchase an enterprise resource planning software system (ERP) for your job shop or manufacturing operation. You’ve come to appreciate the power of organization such systems have, and how they’re able to lean businesses in order to enhance bottom-lines. However, you also know that because of the sort of work your company engages in, your greatest need in any ERP package will be found in its capabilities as a complete project management (PM) function.

Well, by knowing and understanding what your need really is in an ERP solution, you’re more than halfway there in choosing what is right for you—what to look for in your new software. In other words, taking steps to investigate and self-assess company requirements will guide you in making informed acquisition decisions. Many times, companies in search of ERP software make purchases on criteria other than actual need or the prospect of expanding their operations through economic growth in the future. They are glamorized by the “bells and whistles” and after considerable time, effort, and money is spent, they end up with an ERP software package that is much too large and costly for their operation, or one that is—while cheaper—limited in terms of capabilities that allow for growth.

Knowing exactly what is important to the way you administer front office and produce on the shop floor will be the benchmarks by which the ERP software purchases with the best ROI possibilities …Read the rest of this entry »

When a customer has a problem, concern, or question about their purchased product or service, they expect answers—quick answers—from their vendor. In the manufacturing world, this response is commonly referred to as customer service and it is informed by a variety of information portals. In addition, the initial point of contact for service with a customer is often determined by the customers themselves, depending on the urgency of the issue and the historical reliability of the vendor to react to customer inquiries.

These points of customer service contact can include telephone, the Internet, and even traditional face-to-face interactions. To this end, customer information portals in a company and communicated between departments within a company, in combination with customer service points of contact, are the foundation of Customer Relationship Management (CRM).

When it comes to CRM and customer contact, it is simply common sense (though less commonly realized) that customers not only want the quickest possible service response, but they want intelligent service. In customer service, perception plays a great psychological role in the way a customer feels about a response. For example, in some of the most automated CRM applications, and some service web methods, real time does not always …Read the rest of this entry »

There is an increasingly popular business notion that it is getting harder and harder to find new business. To some degree this is true. To a larger degree, though, it’s not. What might be better stated is that it is getting more difficult to find new business using old marketing methods. Indeed, marketing in manufacturing today involves more than simply word-of-mouth reputation.

In order to compete on an ever-shrinking global stage, the recruitment and retention of customers must involve a business intelligence system that gathers its data from a variety of sources and a variety of portals of information flow. In a system that brings together people, procedures, and supporting programs, Customer Relationship Management (CRM) is the necessary business model for the 21^st Century.

CRM is often found as part and parcel of a larger enterprise resource planning software package (ERP). CRM goes beyond simply answering service calls and maintaining sales records; rather, it’s a customer-centric business philosophy that holds intelligence about the customer as key to building differentiation between competitors in the marketplace. As a business realizes that their operation creates and maintains customer relationships on several levels, the need for collecting and sharing customer data becomes …Read the rest of this entry »