On the one hand, you have the need for making the change to a manufacturing information system that will help you gain a competitive advantage. On the other hand, you’re faced with a wealth of anecdotal horror stories about the time and effort it takes to implement such a system. Confusion. Delays. Downtime. Many of the problems that you hear about seem to be common mantras from those companies that have had problems with ERP implementation.

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…)

It’s a given that maintaining inventory is costly on many levels, the least of which is the notion of stagnant inventory and/or raw materials becoming obsolete before your very eyes. In working inventory control, there is often a fine line that marks the threshold between having too much on-hand inventory and not having enough to ensure on-time delivery. In the modern supply chain, planning for sourcing issues and automated purchasing puts manufacturers on better terms when it comes to real-time inventory management.

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…)

The greatest mysteries of the ancient world usually revolve around how something was made. The Pyramids of Egypt, Greek Parthenon, and Roman Colosseum are all immense structures that required organization and many associated industries for their completion. Chances are, though, the coordination and production requirements of these wonders of the world were not much different than what we expect today in modern manufacturing.

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…)

It’s hot outside on a nice summer day along an oceanfront boardwalk, and you want some ice cream. Before you are two shops—on the left a convenience store stocked with very inexpensive, packaged ice cream confections, and on the right one of those pricey marble-slab places that practically makes the ice cream from scratch in a flurried and extravagant public production of custom “ice cream building”.

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…)

Odd as it may seem, as a financial concept the term bottom-line has only been around for about forty years or so. It’s genesis as a word (an adjective, really) was the result of the growing need to establish the ultimate benchmark for profitability in the post-World War II advanced corporate economy. That is to say, to find out more than a company’s profit and loss through simple financial accounting.

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…)