Over the past three decades enterprise resource planning systems (ERP) have become ubiquitous throughout the manufacturing industries. They have become foundational for most companies looking for an application that enables them to perform basic business operations in the most efficient way. At the other end of the needs spectrum, ERP packages also incorporate a large amount of industry specific business functionalities that ensure the costs of such systems are not as exorbitant as is usually the case in completely custom software packages. In short, the vertical hierarchy of ERP software helps organizations adopt the system faster and too a large extent help provide growing organizations by provide a framework of processes for their business.

One of the distinct advantages of using a robust ERP system is that it is an integrated solution for the entire business. Typically, before implementing an ERP system, a manufacturing business (large or small) will employ multiple and disparate operations software systems that usually don’t communicate with each other very well. Additionally, custom-built applications not only become difficult to manage, but they also pose unique challenges in terms of upgrade or adaptation to the latest technology standards. (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…)