Growth pains. You hear about manufacturers who have them, and perhaps you even dream of the day your own company will actually experience them. While growth is certainly a good thing and should be the goal of all businesses, rapid growth can often bring many problems as well—problems that may, in the long run, result in a reversal of growth fortunes.

Perhaps, the biggest issue looming over rapid growth is the diminishment of customer service. When sales are up and profits strong, with margins widening little bit by little bit, quality customer maintenance is sometimes a notion that is considered far too late in the growth equation because it requires investment with a more ambiguous ROI than something like a new lathe or forklift.

However, without strategic Customer Relationship Management (CRM) that anticipates rapid growth (or even steady growth) scenarios effective and responsive customer support gets lost. CRM is designed to coordinate multiple channels of support for the customer in ensuring problems, questions, and feedback are continuously administered. When a customer needs help, a customer needs help quickly. Knowing customer profiles, history, and preferences is a best business practice that confirms for both the loyal and new customer that their supplier cares about them. And, of course, the idea of …Read the rest of this entry »

When you’re a manufacturer or job shop and you start looking for an enterprise resource planning software solution (ERP), return on investment is certainly an important part of the criteria. Not only is the software needed for ERP something of a financial investment, but the labor and personnel time expense often considerable. There are many reasons why to invest in ERP, and most of them are good reasons: Better shop floor productivity efficiencies, better inventory management, improved front office administration, reliable quality control, and the list goes on and on.

However, one of the most important, yet least appreciated, reasons to employ ERP in a manufacturing or job shop setting involves the enhancement of the relationship maintained between the business and the customer. Referred to as Customer Relationship Management (CRM), the application is often part of the more robust ERP software solutions, and it is vital in today’s competitive global market environment.

In most instances, within the better ERP solutions, the expense of CRM is far outweighed by the manifold positive results found in the practice of building of long-lasting lifetime customer values. They are benefits that offer …Read the rest of this entry »

When we talk about lifetime customer value (LCV), we’re always hoping for the best-case scenario. What we would prefer is to establish a customer early in their consumer life (business or domestic), and sustain loyal in that customer through the end of their consumer life. And, yes, this can be achieved. Many start drinking Coca Cola early in their life and never sway from the brand. There are found Ford truck buyers in the same family generation after generation. Certainly, many factors go into creating such product allegiance. Quality of product is important. So too, brand marketing that include advertising and public relations.

But, as any mom-and-pop business will tell you, it is the direct relationship with their customer that is all-important when it comes to long-term customer loyalty. “Knowing the customer” is the bottom-up approach practiced by the best of small operations—ones that know their customers well, even personally. While this practice is intuitive to small companies that life and work in the same community where their customers live, for national and international companies such intimacy comes a little bit harder. In other words, the bigger you are the less personal you get. This can be a problem, particularly with the wealth of historical customer-related data that is increasingly accumulated by growing manufacturing operations.

To handle the need for building LCV in the advanced industrial age, the business strategy of Customer Relationship Management (CRM) was developed to …Read the rest of this entry »

The recruitment of a customer is one thing; the retention of that same customer is another. To regain a customer lost through poor service, product, or account management is, yet, another thing. In general terms, how we treat a customer is very much tied to how profitable that customer is for us in the long term. Insofar as this concerns the connectivity between vendors and their clients, Customer Relationship Management (CRM) is the strategic business and manufacturing practice today that can make or break the loyalty of a customer.

Most CRM in modern manufacturing businesses, large and small, is handled by dedicated software applications, or is a part of larger enterprise resource planning software systems (ERP). When a company does decide that it wants to implement a CRM strategy, it usually takes its direction based upon a conceptual need in customer relations—either general relationship operational management or production/sales force automation.

In either case, there are several specific approaches to CRM that are specific to the type of customer served and their needs as customers. Here are two of the dozens of approaches to CRM in manufacturing: …Read the rest of this entry »

If you’re still using paper in the front office and on the shop floor (routers, schematics, timeclock, etc.), then you probably have some room for efficiency improvements. In fact, there are many manufacturers whose business practices and information systems are still built around the idea of moving paper documents though the course of their production processes. Paperwork is both a fragile and relatively bulky medium, and inevitably the slow moving information it contains will either be archived in space-consuming files or lost through extensive and often careless shop floor handling.

To counter these negative tendencies, manufacturing technology has advanced paper reduction techniques through digital mediums and storage. With digital media, massive amounts of information can be stored in one very small, very central location for immediate and simultaneous withdrawal of real-time data.

To be sure, some manufacturing operations are still comfortable functioning with paper. The reengineering of business practices is never an easy thing to do, and often the maintaining of a successful status quo seems to be the easiest thing to do. However, as more and more companies see the value of waste reduction in lean approaches to manufacturing, supply chain management, shortened lead times, and global competition all mean that …Read the rest of this entry »

With the cost of raw materials apparently not going down any time soon, scrap reduction has never been more important for manufacturers. To ensure the maximum use of materials, precision laser-cutting and water-jet machines have been developed. Computerized metal stamping can bring out parts and pieces to the very edge of the stock. In manufacturing, materials management has been made better because both machining technology and management through cost accounting have been improved.

In short, accountability is in place on the shop floor and in the front office, and this means that tracking scrap is part of the production process. Of course, the relationship between shop floor and front office has always been one made through data, and it is through data that the root causes of scrap and the methods for its reduction are found.

In short, scrap rate (or yield quality) is a function of production standards and the cost of quality itself: process settings, raw material lots, maintenance activity, operator focus, and so forth. Better working processes and more cost effectiveness in materials management, especially in the creation of scrap, can enhance a manufacturer’s competitive edge. And, competitiveness today is measured in terms of …Read the rest of this entry »

Remaining in play is the name of the game in manufacturing competition today. That is to say, to find the orders that keep things going, and going well, you have to be on the field with your competitors in the first place. That’s where the action is found, that’s where potential customers come to look for services, parts, and products. Through consolidation, however, the competition is changing. The days of parity, where niches were carved to pinpoint exactly what you and your competitors were all about, are becoming fewer and fewer. To remain in play in manufacturing today, a company must often introduce flexibility into their shop floor operations. Once a novel notion, flexible manufacturing is increasingly taking hold as both a practice in the shop and a philosophical approach for management.

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 …Read the rest of this entry »

When facing competition—particularly fierce competition—it’s important to know all you can about your adversary and their weapons, the battlefield on which the fight will take place, and the best time to strike or retreat. In other words, knowledge is power, and the ability to remain flexible and fast to emerging or changing developments is a tremendous tactical advantage. This notion of changeability is at the heart of new movements in manufacturing based in production agility.

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 …Read the rest of this entry »

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 …Read the rest of this entry »

The plant is running smoothly, all machines are operating at capacity and scrap has been reduced to the lowest levels experienced in the history of the plant. The shop schedule is running fine due to the introduction of an enterprise resource planning software system—but something just doesn’t seem right. The expected ROI is falling a bit short of expectations and on-time delivery is still not what it should be. You wonder what it is you’ve overlooked, what area of the operation is throwing the proverbial kink in the works.

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: …Read the rest of this entry »