In the second of this two-part blog, we will explore how continuous improvement works in conjunction with ERP software as it offers an ideal approach for small to medium-sized manufacturing companies. (If you missed part 1, read it here.)

ACHIEVING CONTINUOUS IMPROVEMENT WITH ERP

ERP software plays an indispensable role throughout the shop floor. However, when it comes to continuous improvement, ERP is only as useful as the knowledge and skills of ERP users throughout the company. Therefore, ongoing ERP training needs to be as consistent as the continuous improvement movement itself.

First, settle on a specific process improvement methodology that fits with your business and the way you operate. If you don’t have anyone on board with expertise in the methodology you choose, hire one or enlist a reliable consultant. Once you have a leader to guide your continuous improvement, let the training begin.

Some ERP systems come with a Learning Management System (LMS) to deliver, track and certify training for each ERP user while standardizing internal training. If your system doesn’t include it, look for a third-party LMS that can integrate with your ERP. Ideally, the LMS should cover the entire system from quote to cash and everything in between.

Just as process improvement methodology needs a good leader, so does the ERP system driving it. Every manufacturing business should develop at least one ERP “super user” who knows the entire system in and out and can train users at all levels of the organization. Once you have your ERP super user, you will need to build a team of employee ERP experts with in-depth knowledge of how ERP operates within their departments.

The modern manufacturing industry can change before you know it, so don’t get complacent with your process improvements no matter how good they are. To avoid falling behind, conduct a thorough process audit every few years to review current process pain points and inefficiencies. Then set measurable goals for improvement in areas that will generate the best return.

Encourage forward thinking from all employees about how to serve customers more efficiently. Upload new ERP features, functions, and versions on a regular basis so employees don’t get stuck doing things in an outdated way.

Before you begin, keep the following principles in mind:

• Don’t go overboard on large-scale change events. Implementing large-scale process changes are sometimes necessary and can produce tremendous outcomes. However, continuous improvement doesn’t require large-scale events or paradigm shifts. Taking small, incremental process improvement steps is more practical, less expensive, and more effective.
  
• Make all employees part of continuous improvement. Engaging staff members in making processes better taps into their personal knowledge base and encourages them to put their ideas into practice.
  
• All improvements should be measurable. Measuring improvements of any type or size is essential for achieving the results you want. It also enables you to review, repeat and apply the process to other aspects of your operation.

SMALL CHANGES CAN YIELD BIG IMPROVEMENTS

ERP can facilitate process improvements in many areas of the business. Here’s how a few of our customers made small improvements to produce significant outcomes.

1. Continuous improvement with integrations. Before implementing ERP software, it often took weeks for welding machines manufacturer Miller Weldmaster to get an order into production on the shop floor. Incorporating ERP helped improve their operations in many ways, including faster turnaround times, however, the biggest improvement came from eliminating manual data entry when building BOMs and routers.
   
   This was achieved with the Bill of Materials application in ERP software and BOM Compare, a software that compares CAD and BOM data from the customer directly into Miller Weldmaster’s ERP system. With finished BOMs and routers now arriving on the shop floor much faster, Miller Weldmaster has the ability to begin production on the same day the order is received, and the data is more accurate.
   
   
2. Training drives continuous improvement. During the COVID pandemic, customer orders grew by leaps and bounds for Cardinal Systems, a manufacturer of custom swimming pool products. Unfortunately, the company experienced high employee turnover, making it hard to get products out the door on time. It also led to ERP training mistakes with new hires.
   
   Cardinal Systems took advantage of several training opportunities offered to ensure new employees learned how to properly use their ERP software. They also improved their costing process by installing 15 data collection stations on the shop floor. Shop floor personnel now digitally log on to work orders and job sequences, and the stations track all labor time as it happens, capturing labor costs down to the penny.
   
   
3. Continuous improvement via automation. Michigan State Industries (MSI), part of the Michigan Department of Corrections, operates 13 separate manufacturing operations throughout the state. With limited personnel, MSI tackled continuous improvement by automating many of their operations using Global Shop Solutions’ shop floor, reporting, material and labor tracking functions.
   
   SI now gets work orders to the floor quicker by automatically creating work orders for manufacture-to-job sales orders. They check inventory levels to make sure enough parts are on hand for manufacture-to-stock components and set up automatic ordering of raw materials which simplified the purchasing process. Shop floor data collection stations automatically collect labor and production data, improving the accuracy of labor and production costs.

With ERP software, small, steady improvements are just waiting to be implemented. If you want to improve in specific areas of your business, start at the How to Be Better page.