On February 6th Global Shop Solutions will be giving our first quarterly webcast. Each quarter, one of these webcasts will be highlighting a business goal and, how Global Shop One-System ERP Solutions™ can help businesses achieve that goal. This week’s topic is “Trust Global Shop for Increased Sales.” (more…)
What if every time you saw an inventory quantity or dollar amount on the screen, you didn’t just guess, but knew it was accurate? What if, when you take an order you can instantly see whether you have a quantity left over from a previous overrun, so that you can reduce run quantity on the new order? What if your cycle time to process a part was significantly reduced, whether for parts or assemblies? These are the results you should be expecting from your use of enterprise resource planning (ERP) to manage inventory.
With ERP software, most inventory transactions require little, if any, input. Inventory management is very automated, which leads to even more savings through reduction in labor. Customizable options allow for the lot, serial and bin tracking required in many precision industries such as aerospace. Plus, if your ERP software system is a good one, you should also have the ability to cycle your inventory, keeping inventory accurate and dramatically reducing the costs of physical inventories. (more…)
Are the functions of a manager truly different in a lean manufacturing environment when compared with a traditional management structure? Of course they are. It is all a matter of the degree to which each incorporates production variables of their specific models that they will differ in some ways, and don’t differ very much at all in other ways. It’s important, though, to understand these differences for seeing what model—lean or traditional—works best in your own shop for managing people and processes.
So what are the differences? In a lean manufacturing environment production is based on real customer demand. In a traditional manufacturing environment production is based on what you hope to sell. (more…)
The sales order comes in, the work orders go out. Schedules are made, capacity planned. At some point, you make a decision about what the period of time will be required for that part, material, or subassembly to pass through the manufacturing process. In short, you’ve calculated the throughput time. Why is knowing your throughput time important? Well, it’s like asking why cities time their traffic lights, or why can’t all surfers ride the same wave in the same spot. At some point, without knowing your throughput time, all flowing elements will converge on the same spot and produce an intractable bottleneck that halts production, driving, surfing.
Throughput time is a lean concept, and it’s always important to clearly understand the advantages of lean manufacturing before it is implemented. One of the most important advantages of being lean is the ability to provide goods to the customer with shorter lead times. Of course, lead time is often the result of many factors and components. Throughput time (TPT) is one such component lead time. It is a notion every manufacturer gives critical attention in the manufacturing process. (more…)
In Part 1 of this two-part series on inventory reduction in manufacturing, we looked some of the over-arching issues associated with the subjects—the causes and the effects. While many of the variables associated with inventory management change from operation to operation, it is still an unwavering notion that each manufacturer does have something akin to an optimum inventory level. How soon you realize this and do something about achieving it is often the path to improved profitability.
Why do we have inventory in the first place? Demand, of course, drives inventory. Demand is a function of the sales pipeline, and sales themselves are a function of what level of quality you sustain as a producer. The better your quality and meeting of promised delivery dates, the more sales you get and the more lead-time demands you have on inventory. (more…)
It’s all over the economic news today: “Inventory levels are up. . .Inventory levels are down. . .Inventory levels are flat.” Depending on what you make as a manufacturer, there is no doubt that one of these news soundbites is associated with you. It’s also certain that your inventory levels have a lot to do with your profitability and competitiveness. In this first installment of our two-part blog series on manufacturing inventory reductions, we will take a brief look at the what inventory is, and its potential for being a drag on profitability.
By nearly all measures, inventory is the largest single asset on the balance sheet of many manufacturers and distributors. It is usually the most expensive asset to own and maintain as well, with estimates of carrying costs typically running 25-30 cents or more on the dollar annually. With this in mind, it is easy to see how the optimization of inventory levels would have a great impact on a manufacturers’ bottom line. But of course, this begs the continuous question, “What are my optimum inventory levels, and how do I achieve them?”. (more…)
With so many different ERP systems to choose from, identifying the right software package can be a daunting and time-consuming task. However, given the cost, integration and long-term impact of ERP systems, you can’t invest too much time in the evaluation process.
The best approach involves using one of several online tools to sift through all the different vendors and narrow the list down to three to five finalists. Once you have a short list of finalists, conduct extensive interviews with each company and “demo” their software to see which one best fits your needs. Be sure to ask each company to come to your location for a test run. If they insist that you demo the software at their site, it should raise a red flag about their approach to customer service.
When evaluating different packages, look for the “four C’s” of an ERP system: (more…)
How do you gauge success in manufacturing? Most would say it’s a factor of profitability, and of course, they would be correct. But, when it gets to the nitty-gritty of making sure profitability is running full-speed ahead, shop performance is going to have a great bearing on just how that profitability is achieved.
Certainly, when it comes to the investment you might make in an enterprise resource planning system (ERP), performance measurement is going to be considered the biggest payback area you can achieve. The stronger an ERP system is in being able to measure performance on a wide variety of cross-operation variables, the better informed you will be about what’s going on within your production area — and where the best improvements will realize the greatest returns in profitability. (more…)
In Part I of our continuing blog article series on getting ERP right the first time you do it, we introduced the concept of ERP as a means to build greater profitability through gains in efficiency. Now, let’s take a look at what is the function of ERP within the manufacturing system, and what benefits can be had through its employment.
In essence, ERP software serves as a central communication point, or hub, for all the activities in a manufacturing business. It consists of different modules that handle everything from estimating and quoting work orders, all the way to final delivery and billing. ERP also handles all the financial aspects of work generation, including purchasing, inventory management, administrative overhead and all the accounting and financial activities. (more…)
Manufacturing in the U.S. is getting tougher all the time and the pressure is unrelenting. To remain competitive, you must continually cut costs, increase productivity and improve quality, while at the same time offering better service, faster delivery and lower prices. Fortunately, there is a tool to help you accomplish all this and more.
You’ve probably heard about enterprise resource planning (ERP,) the manufacturing planning approach that cuts cost and boosts productivity by integrating all your production processes into one cohesive system. You’ve probably heard that it can improve on-time deliveries and inventory control while simultaneously reducing administrative overhead. That it can streamline all of your manufacturing processes by increasing visibility throughout the organization. And that it can turn inefficient companies with high cost structures into lean, mean operations that can compete with anyone in the world. (more…)
