Why use an enterprise resource planning solution (ERP) designed for another manufacturer whose operations are nothing like yours? Common sense, right? However, this is the approach taken by less robust ERP software systems that lack the flexibility to integrate customizable features. Sure, most of the standard features are usually there—purchasing, time clock, scheduling, inventory, shipping, and so forth. But what happens when your needs as a manufacturer are more than just the “standard” manufacturing functions?

This is where the advanced ERP software systems come in to offer the ability to be customizable for the individual customer. With all of the benefits ERP has to offer the manufacturer today, it would seem as if we’ve made great strides toward total manufacturing efficiency. Benefits such as the synchronicity of all shop operations, orderliness, efficient direct labor costs, less in-direct labor costs, and so on, means that the job shop today can operate at fuller capacities and with enhanced bottom lines. (more…)

After the age of the craftsmen, when the Industrial Revolution began to pump out products in mass, time became a critical issue with regards to production in manufacturing. No longer could products be made according to an arbitrary or infinite time-frame for production. With the introduction of mass manufacturing, production mandates and quotas were increasingly created according to the notion of how much time it should take to make x number of items.

The idea gave rise to business efficiency theories and models such as Frederick Taylor’s time-motion studies in the early 1900’s, and Frank Gilbreth’s one best way production mode of scientific management in the 1950’s. (more…)

Cost accounting in manufacturing answers the simple question: “ Am I making money on this job, and if not then why not?”. Cost accounting is a bridge between financial and management accounting and is a technique used to address the demands of both. It is a systematic application that takes all events in the supply chain and translates them into financial values for analysis by various people both inside and outside the company operations. The most important results of the analysis are findings by which management can reduce manufacturing costs while improving profitability, especially in the multi-sequence operations of manufacturing.

While there are several ways to approach cost accounting (e.g., activity-based, throughput, etc.), the generally accepted accounting principles most in line with manufacturing operations are standard cost accounting and weighted average cost accounting. (more…)

With ever-increasing movements in manufacturing toward a seamless integration of shop systems, enterprise resource planning (ERP) software has proven a viable solution to the problem of communication between departments. The immediacy of graphically-displayed (GUI), real-time data available to operators at the touch of a finger functions to reduce the amount of time and paperwork necessary to make job production run smoothly.

However, one of the last vestiges of needless multilayer redundancy in the manufacturing system is shown in the very essence of the production system; that is, the conceptual and actual separations that exist in the engineering and manufacturing bills of material (BOM). While there are, of course, different types of bills of material dependent upon the department that generates them and for their intended purpose, the similarities of ultimate purpose found in engineering and manufacturing BOM’s is the basis by which ERP seeks to their integration within the production process. (more…)

If anything in manufacturing is certain, it is that the greater the materials handling the less efficient the system will be all the way down the production line. Indeed, materials acquisition and issuance has become something of a science since the introduction of lean principles into manufacturing over thirty years ago. The idea of lean in materials management is tied to the notion of estimating the material quantities that will be needed at any moment in the manufacturing operation.

Prior to the automation of the shop floor, materials management (as a function of inventory management) was both a labor-intensive and often-inaccurate process as estimates for material were usually based on out-dated data. Today, however, enterprise resource planning (ERP) software systems take the manual process out of the production loop and through the use of real-time data, achieve the automation of materials management. (more…)

Of the many ways to maintain efficiencies in modern manufacturing, none is perhaps more underutilized than the keeping of accurate inventories. Perhaps, this is due to some ancient notion that inventory simply takes care of itself: Orders get taken, parts get ordered, parts get used in production, product leaves shop—and the cycle starts over anew. Perhaps accurate inventory maintenance is considered unnecessary, that there is little margin loss as a result of obsolescence or overstocking.

However, both considerations operate under the same single primary fallacy—that inventory is only an insignificant means to a production end where other factors such as labor and machinery are considered far more important manufacturing elements.Today, though, it is not enough to say that you have a great grasp on the scheduling and maintenance of men and machine on the shop floor. (more…)