Whether in a major manufacturing organization or on a country newspaper route, the degree to which you are able to delivery the goods on-time is often the determining factor for the loyalty of any customer. While some tolerances can be made for the occasional late throw of the daily rag, in many businesses today on-time delivery is vital to performance, for manufacturing exists in a world built around the domino effect.
Your late delivery of product impacts the due dates promised by the myriad other shops in the manufacturing supply chain—as you fail, so too do those downstream from you. Suddenly, everyone is having to explain to their own customers the reasons for delays in the production and delivery of promised goods, and no increase in quality or reduction in price will help you back into the good graces of your clients.
More often than not, consistent on-time delivery is not met due to inaccuracies in capacity planning/scheduling and job control. Shop floor managers lacking a way to identify and/or predict work center hot and cold spots are simply using a hit-or-miss tactic in scheduling jobs. In turn, delays in schedule data mean that inventory managers function in the dark and must either keep large inventories to meet any production contingency, or fear inventory going negative with resulting delays while awaiting new material shipments.
What is needed is a way that all aspects of production speak to each other with accurate real-time data. Today, the solution is found in enterprise resource planning software (ERP), whereby single input data is readily accessible by every element of the shop—no more standalone departments maintaining propriety over valuable production data. Everyone in the plant is on the same page all of the time and is part of a robust manufacturing event management operation.
To facilitate on-time delivery of goods, ERP software offers a streaming flow of master production data, often through a series of graphical user interface terminals (GUI’s). Here data is input, retrieved, and analyzed to optimize internal shop communication. For shop floor production, this means production loads are efficiently scheduled and material is purchased and inventoried just-in-time (JIT). For example, from the receipt of the sales order the entry clerk generates a work order that is simultaneously seen by all in the plant.
Demand for material is then recognized by the inventory manager while the shop floor manager is in a better position to quickly and efficiently adjust work center capacities to achieve optimal production output performance. In addition, should maintenance decide to take a piece of machinery off-line for repairs, this information is clearly visible through the GUI to the shop floor manager who, again, can make adjustments in the production schedule. Should any outside production processes be required (i.e., heat treating, plating, etc.), they are easily scheduled to facilitate smooth completion from WIP to shipping.
In terms of inventory management, in an ERP operation material goes through the system rapidly. For pull-production operations working in lean principles, this means that inventory is received and distributed to the shop floor JIT. This is especially productive in lean cell production systems where inventory management is critical to the efficient operation of the cell.
So, for job shops or make-to-order manufacturers, ERP enhances on-time delivery by integrating diverse production data into one system, and then makes meaningful and easy to understand interpretations of it for all to see. From sales orders, vendor quotes, inventory, and production orders, to work orders, BOMS, HR, and shipping, a robust ERP program can produce such systemic efficiencies that on-time delivery is significantly enhanced. In turn, customer satisfaction and loyalty are realized on the path to a most positive company reputation—a position, we all know, that is most desirable in its relationship to profits.