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Adoption of Cloud turns unexpected business value

Adoption of Cloud turns unexpected business value 150 150 David Sheriff

Adoption of Cloud turns unexpected business value

The move to Cloud has been part of the ongoing dialogue for some time, yet adoption is slow-going.  However, the conversation IS picking-up momentum. The primary drivers for manufacturers to move to cloud models are most certainly economic. The return is realized by the transition of Capital expense to Operating expense, and the scalability and flexibility in deployment of cloud enterprise business application services, as compared to the traditional software and IT infrastructure purchase and ongoing maintenance processes.

“Cloud solutions offer an average payback period of 7.1 months and 5-year average ROI of 626%, a level that few other investments can equal.1 Randy Perry, IDC Whitepaper, “The Business Value of Amazon Web Services Accelerates Over Time,” December 2013

Research is proving the economics tell a very compelling story, but, is just the beginning of a long list of key benefits today’s manufacturers realize by moving to the Cloud.   Here are just a few:Collaboration in the Cloud
Purposeful collaboration is one key benefit.  Companies linked to cloud based business applications connect employees, customers and suppliers, enabling faster decision making and issue resolution, fosters innovation, enhances relationships, shared learnings, and allows the creation and adoption of new approaches.Integration and Extend in the Cloud
Today’s manufacturers, in order to remain relevant and to compete, must automate, integrate and extend their business processes – speed and accuracy are key.   Cloud solutions deliver new automation, but, also offer new integration and extensions in clour ERP services as well.   Take the Infor ION middleware application, for example.   ION allows manufacturing organizations to connect disparate cloud and on-premise solutions, taking a hybrid approach to business applications.   (Watch an ION video and in the downloadable research eBook below.)Mobility – The Cloud Enables People – Your Most Valuable Resource
Enterprise business systems today are no longer tied to a data center or require expensive local infrastructure, providing tremendous flexibility for users – why should employees be tied to the local network? Secure cloud-based connectivity to mobile apps empower and enable people to work more efficiently, from where they are.   The Cloud streamlines mobile solutions delivery across an enterprise, while the Cloud provider manages all the complexity of mobile connectivity and device support.   Infor’s mobile platform provides a huge range of capability, extending ERP’s mobile solutions.Shift in attitudes, from why to why not
While the industry is still in it’s early stages of Cloud adoption, the economic and key benefits are rapidly shifting attitudes “from why, to why not” – read the Infor paper – and discussions on the potential downsides of cloud deployment are quickly moving to the forefront of manufacturers priorities to evaluate the risks of not making the move.   The Cloud is inevitable.  It becomes a matter business leaders making a shift in forward-thinking, and a commitment to an organizations readiness to embrace the change.  Many companies today have taken a hybrid-approach to the Cloud, have deployed CRM and HR functionality and are realizing the many economic and operational benefits of these early deployments.  Infor and VBS have solutions and services to support on-premise, hybrid and full cloud adoptions.VISUAL Business Solutions is an Infor Certified Gold Channel Partner, serving manufacturers since 1993.  Infor’s innovative technologies allow our clients the flexibility to build for the future.  
Contact us today to begin the discussion.

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Think Business Process Improvement Before Tools

Think Business Process Improvement Before Tools 150 150 David Sheriff

Think Business Process Improvement Before Tools

By:  Scott Jessup
As a strategic planning methodology, business process improvement (BPI) enables manufacturers to streamline operational processes, improve access to information across departments, and eliminate waste in all its forms. Done correctly, BPI also improves decision-making as well as the management and utilization of assets and resources. It does all of this by identifying the business operations and employee skills that can be improved to make procedures smoother and workflows more efficient, driving business growth and profitability.ERP systems, despite their technology and automation, provide no intrinsic benefit without the guidance and input of business processes. In fact, ERP implementation is, in reality, business process improvement tool. Determining and defining the right business processes helps a company quantify what it wants to do and how it will go about doing it. It’s critical to know what you want to do and how to do it before installing the tools you think will implement the as-yet-undefined task or process. Establishing the necessary business processes is a three-step process that involves:

1. Dissecting and understanding the current state of business processes

2. Removing all the non-value-added processes

3. Implementing the technology tools to automate the key, core processes remaining

Business processes exist to create consistency and control over a specific set of actions designed to produce a clearly defined outcome. Understanding that and developing the processes to accomplish the defined outcome is essential before introducing tools to try to automate everything.

Fostering a culture of change

Discrete manufacturing requires a number of tasks and processes that are interrelated and sequential – one task’s output becomes another task’s input. These complex relationships make business process improvement a daunting task that most individuals are loathe to undertake unless there is an overwhelming or compelling reason to change. So instead of focusing on improving business processes, some companies will instead construct patches or add tools that treat the symptoms but don’t address the underlying illness — poorly-designed or obsolete business processes.Business process improvement is technology-independent and should not be driven by IT. In fact, a true business process isn’t even back office- or front office-dependent, it’s organizational-dependent. For example, an over-arching business process such as opportunity-to-cash touches virtually every department and function, from sales and finance to production and operations. Representatives from each department can be instrumental in helping determine “this is how we excel as a business,” “these are our processes to make us efficient and profitable,” and “how do we make all this work?” Only at this point can IT weigh in with recommendations on technology tools and solutions to make it all happen within the system.What’s needed is a culture of change. A desire within the organization to get rid of the non-value-added processes that don’t add to the bottom line but instead act as a drain on time, money, and resources. This requires a multi-functional, cross-enterprise approach that will help eliminate enterprise-wide waste and free up resources for focused, value-added activities that contribute directly to business growth and profitability.Utilizing this more strategic, cross-enterprise business process improvement strategy forces an organization to think beyond just production processes, which is where companies typically focus. After all, when thinking about process improvement, many managers look to production models because that’s how products get manufactured. However, focusing on a larger, enterprise-wide BPI effort that includes balancing and optimizing workers and resources across the entire organization can yield significant business process improvements that provide substantially more value than just adding or adjusting a machine or production task.Adjusting business processes across the enterprise – not just in production – produces results that can streamline operations, minimize waste, boost production, and improve quality to increase sales and maximize profitability. And that’s the ultimate goal of business process improvement.

3 Essential Production Planning Improvements

3 Essential Production Planning Improvements 150 150 David Sheriff

3 Essential Production Planning Improvements

By: Scott Jessup Production planning is at the core of any manufacturing process. The purpose of production planning, of course, is to organize material and human resources to efficiently manage production costs, time, materials, and personnel.Efficient, effective production planning involves the intricate choreography of all these elements so that they come together in a cohesive, timely fashion to speed the production process along to a successful, profitable conclusion. For any manufacturing operation to reach its full potential, effective production planning most be at its core.So how do you improve the production planning process? It starts with three fundamental improvements:

  1. Provide production planning education 

Unfortunately, many manufacturing operations, especially small-to-medium-sized businesses (SMBs), relegate production planning to machine operators or process managers who have come along with the business as it has grown. While these individuals may be outstanding machine operators, they typically don’t have a broad knowledge of planning and production principles. To equip them to become skilled, qualified schedulers and planners requires education so they can successfully use tools such as Infor’s VISUAL, which is one of the preferred ERP solutions for SMBs.

  1. Utilize a “closed loop” manufacturing process 

By this we mean a process that has a defined beginning, middle, and an end that yields measurable data and results. An open-ended process does not provide output data to support analytics, making it difficult to analyze process efficiency. Without a closed loop, manufacturers can be lulled into simply inputting ERP data to run a process with no thought to improving it. A closed loop process provides measurable results that enable manufacturers to gain answers to a number of critical questions such as:

  • Are your run times accurate?
  • What is your efficiency?
  • What is your accuracy of capacity?
  • How much overtime is consumed?
  • Did you get the result you were expecting?

Having a closed loop system and an appropriate set of metrics enables you to understand why you’re getting the results that you’re getting.Most production planners who are having trouble with production scheduling simply know that their scheduling doesn’t work – and they have no idea why. The metrics and analytics that can be used with a closed loop system enable you to determine where critical breakdowns in the production operation occur.

  1. Implement root cause analysis 

Root cause analysis can help you correct deficiencies throughout the production process. By discovering and addressing the root cause of production problems you can permanently fix them instead of simply treating the symptoms. For example, if production runs are typically late, instead of approving more overtime, analyze whyproduction takes longer and fix the root problem.All production planning improvements come down to two basic tools: metrics and analytics. Without identifying and defining what needs to be measured and gathering that data, there’s nothing to analyze for ways to improve. Well-defined, reliable metrics and analytics are the key to improving production planning, streamlining operations, and supporting continuous improvement.

How to Embed Process Improvement into Your Corp. DNA

How to Embed Process Improvement into Your Corp. DNA 150 150 David Sheriff

How to Embed Process Improvement into Your Corp. DNA

By: Scott Jessup

There are a number of proven techniques for process improvement, including Lean, Total Quality Management (TQM), and Six Sigma; however, for any company to effectively and consistently drive process improvement, it must be embraced at every level within the organization. So what are the key initiatives that can help embed process improvement into your corporate DNA? Utilize top-down communications. Business process improvement cannot be dictated from the C-suite. For effective process improvement to take hold in any organization, business managers from the CEO on down must champion and communicate the need for and benefits of process improvement. It is crucial for management to lead the process improvement initiative and not simply assign it to someone further down the chain of command. Top management is uniquely positioned to communicate the strategic importance of process improvement and establish the mission and goals: 

  • These are our core values as an organization 
  • This is who we need to be to compete and be successful
  • These are the processes central to our success
  • These are the benefits of process improvement
  • This is how we can accomplish it

 This may require creating or improving a communication infrastructure to facilitate enterprise-wide efforts to reach every employee, including email, newsletters, face-to-face meetings, visual aids and company events, to name a few. Involve all stakeholders. While communication must be from the top down, process improvement implementation must be from the bottom up. In many organizations this can be hard. Employees need to be empowered to suggest process improvements; for some managers used to telling people what to do, it may be uncomfortable to have employees telling them what needs to be done. If management is truly committed to embedding process improvement into the corporate culture and DNA, they must be prepared to make hard decisions to support it.Ask employees to set benchmarks and recommend targets for the next quarter or next year.  Challenge them to pay attention to what works well and ask how things can be better. Soliciting input on how to improve things from all levels within your organization makes workers feel valued, encourages further input, and reinforces the goal of continuous improvement. Proactive process improvement from the bottom up also provides employees with a mechanism for self-improvement, which advances not only their careers but the entire organization as well.Empowering employees to be champions of process improvement can be a significant change in corporate culture but it is vital for everyone connected to a process to help improve it. Everyone must be committed to working toward a common goal of continuous improvement, understanding that it benefits the company and them.Create incentives for process improvement. While promoting the greater common good is important for implementing process improvement, it also helps to create personal motivation for employees. By offering rewards for process improvements, such as bonuses or prizes, management can encourage workers to make recommendations. Even something as simple as public acknowledgement of a successful suggestion can be a major motivator. At the same time, it’s important to remove disincentives. Most people fear failure, but failure leads to innovation and is an important part of process improvement. It’s important to make failures opportunities to learn. One of the core tenets of entrepreneurship is “fail early and fail often” because failure eliminates ineffective and faulty courses of action and helps focus efforts on the most promising initiatives.

Forecasting Fundamentals: 4 Keys to Forecasting and Production Scheduling

Forecasting Fundamentals: 4 Keys to Forecasting and Production Scheduling 150 150 David Sheriff

Forecasting Fundamentals: 4 Keys to Forecasting and Production Scheduling

By: Scott Jessup

Forecasting and production scheduling is part art and part science. What makes forecasting and scheduling so challenging is that needs vary widely from company to company, depending on the organization’s business model, what they’re making and how they make it. Even within a single company there can be different situations and processes that can affect forecasting and production scheduling.There are a number of criteria that can affect your company’s ability to forecast accurately and reliably including: 

  • Is demand consistent?
  • What factors affect the variables being forecast?
  • What’s your supply chain visibility?
  • How reliable is your transportation and do you have access to multiple modes?

To be able to reliably forecast production requirements and manufacture products based on forecasting information requires companies to answer those questions first.Once you have answers, there are essentially four steps or keys to effective forecast management that, properly implemented, can improve forecasting accuracy and reliability as well as simplify production scheduling:   

  • Forecast 

Some manufacturing forecasters joke about the ease of forecasting: “it’s easy – all you have to do is predict the future.” In a way, this is certainly true. After all, forecasting is the process of making predictions of the future based on past and present data and the analysis of trends. Most companies start forecasting but often stop just as they get started because, depending on the product being manufactured, forecasting can get quite complex and require a lot of data input. As a result, some companies are tempted to “wing it” without putting hard-and-fast policies and procedures into place. The result is that production planning personnel don’t know whether to execute against the forecast, negating any potential forecasting benefit right from the start.

  • Execute against the forecast 

As we just learned, a forecast is useless unless production scheduling is executed against it. By utilizing forecasts and executing production against them, companies begin generating critical data that can be used to analyze and improve future forecasting in a cyclical process of constant improvement.

  • Monitor accuracy against the forecast 

Forecast accuracy is crucial for streamlining production operations, minimizing costs, and increasing profits. Most manufacturing businesses find it valuable to monitor and evaluate the forecasting process using both individual and aggregated forecast-accuracy metrics. By tracking these metrics over time, you can improve forecasting capabilities as well as drive production process improvement (a principal factor in ERP). Forecast accuracy is so important to the manufacturing process it should be a key performance indicator.
 Monitoring forecast accuracy sounds like a great idea, right? It’s surprising how many companies don’t do it for a number of reasons, including data storage issues, inability to agree on metrics, and simple inertia.  

  • Adjust the forecast 

The need and desire to improve forecasting accuracy is fundamental to utilizing an ERP system. By constantly and consistently monitoring forecast accuracy, you are generating information that can help you accomplish three major objectives:·       Determine if you’re using the right forecast models·       Identify the adjustments needed to improve them·       Project any expected deviations from the planned forecast
 Put simply, monitoring and adjusting your forecasts enables you to improve material planning, reduce forecasting and production scheduling headaches, and better “predict the future.”

Do the Impossible: Minimize Manufacturing Cost and Improve Quality

Do the Impossible: Minimize Manufacturing Cost and Improve Quality 150 150 David Sheriff

Do the Impossible: Minimize Manufacturing Cost and Improve Quality

By: Scott JessupThe Holy Grail of any manufacturing operation is to minimize manufacturing cost and improve product quality. While to some that might sound impossible, it can be done with proper planning and forecasting, effective negotiating, and working closely with vendors to control costs. Let’s first take a look at the role that planning and forecasting play in controlling the three basic manufacturing costs: materials labor, and overhead. Materials are the parts, components, and systems that go into making a finished product. For manufacturers operating with Lean or Just-in-Time (JIT) strategies, it is vital to accurately forecast needs and plan purchases and deliveries so that the right materials and quantities can be available at the right time to meet various process requirements. If materials aren’t in inventory when they’re needed, last-minute purchases and delayed production schedules can quickly drive up costs. Accurate forecasting and having flexible, responsive supply chain agreements in place can go a long way toward mitigating materials problems and controlling costs.Labor costs play a significant role in any manufacturing operation, especially those that utilize a highly-skilled workforce. By employing realistic and efficient scheduling techniques, unnecessary overtime can be avoided and labor costs kept to a minimum. Overhead includes all indirect costs associated with manufacturing, including building costs, equipment depreciation and maintenance, utilities, and quality control, among others. Once again, proper forecasting and disciplined budget control can substantially impact general cost containment.One major area where quality and cost collide is scrap-and-rework. Poor manufacturing processes and quality control results in higher scrap rates, which require more labor to produce additional finished products to fulfill the order. Having a solid quality assurance program that includes an effective quality management system and documentation procedures will significantly help reduce scrap-and-rework.Key to controlling all of these costs is analytics. Utilizing a best-practices ERP system with efficient data management and sophisticated analytics will enable you to conduct root cause investigations that can help identify and fix weak spots and bottlenecks in the system. By creating greater efficiencies and optimizing overall performance, unnecessary costs can be driven out and quality improved.The role of contract negotiations in minimizing manufacturing cost and improving qualityThe devil is in the details, as the saying goes, so it’s vital to look at every element of a contract and negotiate the best possible terms to minimize costs. For example, transportation can be a significant cost factor, so look closely at freight terms. In a global supply chain arrangement, freight, along with insurance, duties, and other costs can greatly impact overall material costs.Contract negotiations can also affect quality. The level of expectations spelled out in contracts can have a direct effect on quality and costs. For example, product characteristics can be a double-edged sword. Poorly-defined product characteristics can lead to more time (and money) spent on design, prototyping, and approval. At the same time, highly-defined product characteristics increase the risk of rejections, scrap and rework.In addition, customers may require specific certifications, testing, analysis reports, and/or production part approval processes (PPAPs), to name a few. All of these take additional time and money, so if they weren’t clearly defined in the contract and you’re then put in a position where you have to do these, you’ve just lost some or all of your profit. Whether the contracts are with customers or vendors, the key to minimize manufacturing cost and improve quality is positive relationships. The best customers and suppliers are more like partners – everyone benefits from working closely together, openly communicating, sharing data, and holding each other accountable for the good and the bad. Understanding and working well with your supply chain and customer base is crucial for controlling costs and improving product quality.Minimize manufacturing cost and improve quality through business/operational process improvementOptimizing the processes that affect manufacturing has a direct impact on minimizing manufacturing cost and improving quality. This involves creating a corporate culture built around a desire to pursue and eliminate waste in all its forms.Most often overlooked are front office activities – after all, how can they possibly impact manufacturing on the plant floor? The truth is, they do. How products are designed and produced affects material and labor costs. Order entry and contract review are other key activities that, may not directly affecting quality, can affect cost.  Inefficient purchase order processing and entry can eat into production time availability and cause an unnecessary and expensive rush to fulfill orders.Optimizing processes through continuous improvement through strategies and methodologies such as Total Quality Management (TQM), Lean, JIT, and Six Sigma plays a significant role in minimizing costs and improving quality. But it’s important to understand the difference between improving a production model and a process model. It’s often easier to tweak what’s needed to produce a finished good (production model) by adding more equipment or labor. While that will certainly help with costs and quality, a far greater impact can be achieved by improving the process – how something is made. That takes a little more analysis and hard work, but the pay off in the end can be substantial. 

How to Get Lean Scheduling Right

How to Get Lean Scheduling Right 150 150 David Sheriff

How to Get Lean Scheduling Right

By: Jamie BzdokLean manufacturing is not a scheduling-centric strategy or methodology, rather Lean concepts affect processes around scheduling and help make it more efficient and productive – hence, Lean scheduling. At its core, however, Lean manufacturing is all about eliminating waste in production, including: 

  • Work-in-process (WIP) and inventory
  • Defects
  • Parts movement
  • Over-production
  • Over-processing
  • Delays

The main reason manufacturers often struggle with Lean is because its implementation can expose issues in the production process such as gaps and bottlenecks. Many companies will address these issues with tweaks to production, but not process. For example, some manufacturers will labor under the common misconception that increasing production quantities will decrease costs, so they increase WIP and inventory which, of course, adds labor and materials costs.What’s not being looked at are the hidden costs that occur by increasing batch sizes. As we just noted, increasing production requires the purchase of additional raw materials. This additional cash outlay may not be recouped for months, adding the risk of cash-strapping the company in addition to increasing expenses. It’s easy to see the potential for snowballing here.And it doesn’t stop there. Increasing production batch sizes increases the load on production, which oftentimes leads to a misallocation of production capacity. This, in turn, leads to the added labor expense of overtime, further increasing costs. This is hardly Lean scheduling. To add insult to injury, increasing production adds the risk of over-producing and stockpiling too much inventory (more waste!). Instead of committing cash and resources to producing finished goods that ship and bring in revenue, unnecessary waste has been incurred for products that will sit, unsold, on shelves instead. And we’re still not through. More waste is piled on in the form of added hidden costs such as managing all that additional inventory. This is how poor planning and unaccounted-for hidden costs can impact scheduling, production, and profitability.Lean scheduling: Less is more
Just by reducing batch sizes to what will actually ship can reduce WIP, inventory, lead times, and cost. By minimizing and better controlling these processes, more effective, Lean scheduling can be implemented. Of course, there will be times when cost and complexity of set-up will warrant an increased batch size; however, it’s important to be aware of the costs this will add to the process.The same concept applies to purchased components. Just because a price reduction on materials for a larger production batch size may be available does not automatically make buying it and bringing it into inventory the right decision. Instead, it’s more important to fully evaluate the true need for inventory items or safety stocks and set them at the correct levels.Speaking of costs, it’s important to not focus strictly on the standard efficiencies that are typically associated with manufacturing. Consider the concepts of throughput accounting and realize that there may be excess capacity available to sell at lower costs once initial labor and burden are paid for. Look at different measurements such as throughput (sales minus materials and outside service costs), total spending, cycle time, quality, and on-time delivery.Often when implementing Lean principles a manufacturer will find an increase in sales, a decrease in WIP/inventory costs, excess capacity, lead time reduction, and an increase in on-time delivery. The key reason is Lean scheduling – working on the right thing at the right time.There are tools available, such as VISUAL Easylean/DBR schedule for example, that will help a company enforce these Lean principles in the manufacturing scheduling process. DBR (Drum-Buffer-Rope) focuses on scheduling constraints in the system and enforces the reduction in batch sizes. VISUAL will attempt to only have produced what is truly needed, as well as reduce the amount of time that Planning will typically spend on material planning efforts in an ERP system. The real effort is to resist the urge to fight the system and instead let it do the work. If you can successfully do that, you’ll quickly see the benefits mentioned earlier, including a decrease in WIP/inventory costs and excess capacity, a reduction in lead-time, and an increase in on-time delivery. Lean will uncover issues in your manufacturing processes, enabling you to fix the underlying, fundamental problems and not just patch them up in production.   

5 Biggest Material Requirements Planning Pitfalls

5 Biggest Material Requirements Planning Pitfalls 150 150 David Sheriff

5 Biggest Material Requirements Planning Pitfalls

By: Scott JessupMaterial requirements planning (MRP) plays an essential role in manufacturing, enabling the production process to proceed smoothly and efficiently. As an inventory management system, MRP helps production managers plan and schedule the raw material purchases required for manufacturing. Without the proper MRP processes in place, the ability to reliably and consistently manufacture products is put in jeopardy.To ensure that an MRP system runs smoothly, it’s important to avoid five major material requirements planning pitfalls:1. Inadequate bill of materials (BOM)All production planning starts with a bill of materials – if that is wrong, virtually everything else affecting production will be wrong as well. The BOM drives operations, purchasing, manufacturing, and logistics – the data from a manufacturing BOM is used to inform ERP, MRP, and the manufacturing execution system (MES). Inaccuracies in a BOM such as ordering the wrong parts or the wrong quantities can result in significant problems, especially for companies operating on a lean strategy. The more complete and accurate a BOM, the better the decisions made regarding inventory levels, operational efficiency, and the most cost-effective and profitable way to get products to customers.2. Incorrect or obsolete material requirements planning policiesERP and MRP systems are essentially sophisticated calculators – they utilize mathematical inputs to determine how much stock to buy and keep in inventory, what lead times should be, and other policies affecting the manufacturing operation. Unfortunately, some planners “set-‘em-and-forget-‘em.” They set up the system to manufacture a certain product, input some numbers that may or may not be based in reality, and then never revisit the numbers once they’re in place. If those inputs are wrong, all the planning will be, too.

3. Lack of understanding of planning fundamentalsProper material requirements planning is a complex process that requires good analytical skills and strategic thinking. However, many companies have the wrong person in the position – often they’ll use buyers and simply call them planners. What’s important to understand is that planning is a strategy and purchasing is a task. The individual in the planning role may not be familiar with the principles of supply and demand or know how to interpret the information coming out of the MRP system. This can be a major stumbling block for effective material requirements planning.4. Absence of forecastingAn MRP planner must anticipate what the company will need to successfully manufacture and deliver products. The only way to do that is to have a forecasting mechanism and model. Without proper forecasting there is no planning. Material requirements planning becomes reactive instead of proactive – that’s not an MRP strategy, that’s simply purchasing.

5. Treating suppliers as vendors, not partnersYour main suppliers are the initial key to effective material requirements planning. Without their cooperation, you will have no materials to make your products. It’s critical to involve your key suppliers in your MRP beyond simply sending them purchase orders. By developing a close relationship with them, you can have a better view of the supply chain and create supplier agreements that work well for both parties to ensure a ready supply of raw materials for production.These five major material requirements planning pitfalls all highlight the need to establish good metrics and business analytics. Metrics enable you to measure planning accuracy and facilitate the continuous improvement critical to optimizing ERP and streamlining manufacturing operations.

How to Prevent Customer Changes From Killing Your Production Schedule

How to Prevent Customer Changes From Killing Your Production Schedule 150 150 David Sheriff

How to Prevent Customer Changes From Killing Your Production Schedule

By:Jamie Bzdok

Lean manufacturing is now a way-of-life for many manufacturers; its principles, methodologies and process have helped hundreds, possibly thousands of manufacturers in all sizes and industries cut waste and inventories while speeding up production.However, some Lean manufacturers are faced with increasing customer pressure to maintain more inventory than the manufacturer would like. This is often a result of the customer’s inability to plan accurately and the desire to reduce lead times as much as possible. However, maintaining too much inventory, of course, runs counter to the very core of Lean manufacturing principles.One of the most effective – and the most obvious – strategies for minimizing customer disruptions of your production schedule is to spend the time and effort to really understand their manufacturing and inventory needs, sales cycles, and distribution. By gaining a comprehensive picture of how their sales and distribution system works, it becomes easier to anticipate production and scheduling needs.In today’s high-speed manufacturing environment, production items — from raw materials to subsystem components — are flowing through the manufacturing process at very high rates, with constant pressure from customers to reduce lead times. To accommodate this level of manufacturing and production schedule timing, it can be valuable to have customers provide you with their forecasts.  The data from these can be imported into a flexible ERP system to more accurately evaluate material needs and production schedule requirements. By integrating your customers’ forecasting into your resource planning and production scheduling system you can better react to their needs and even anticipate changes or other potential glitches that could disrupt your production schedule.Your ability to react positively to any customer changes that can adversely affect your production schedule is directly related to how well you maintain and utilize your ERP system. For example, if your company uses an ERP scheduling module in addition to Lean methodologies and focusing on products that actually ship out the door, you can more effectively prioritize your production schedule and proactively address customer needs to minimize disruptions. An ERP system enables you to quickly see where you need to add or shift capacity to accommodate customer requirements. Properly implemented, the right ERP system enables you to run “what if” scenarios that can help you determine how changes will impact your production schedule. You can then communicate with customers in a timely manner to avoid unnecessary changes, or inform them of additional costs incurred by unforeseen last-minute revisions early enough in the production cycle to help avoid damaging customer relations.Good customer communications are key for building and maintaining a successful and profitable partnership relationship. End-to-end manufacturing process visibility that comes with a well-maintained, sophisticated ERP system enables you to stay ahead of most manufacturing issues or help you make well-informed decisions to minimize their impact.

5 Common Production Planning & Scheduling Mistakes

5 Common Production Planning & Scheduling Mistakes 150 150 David Sheriff

5 Common Production Planning & Scheduling Mistakes

By: Scott Jessup

Manufacturing planning and control is all about the acquisition and allocation of resources required to manufacture a product that satisfies customer demand within a certain time frame. In order for that to happen, a variety of materials and labor need to be seamlessly coordinated to yield optimal results. Consequently, any problem with production planning and scheduling – keys to effectively controlling manufacturing — is a process optimization problem.While there are any number of issues that can affect production planning and scheduling, there are five common ones that are prevalent among a wide range of manufacturers. They include:Not properly establishing capacity. Capacity is at the very heart of the manufacturing operation. As a mathematical point in ERP equations, if capacity is not accurately established at the beginning of the manufacturing process, all calculations are going to be wrong. To make it even more challenging, capacity is dynamic – machines go down, workers get sick, overtime comes into play. All these things affect capacity and need to be taken into account to accurately establish it.Utilizing incorrect routings. Routings are essentially operation times. If routings are over- or under-estimated and run times are wrong, the incorrect routings will adversely affect output.Planning production from a desk. Today’s sophisticated ERP software and powerful computer systems can lull production planners into a false sense of highly-efficient production planning and scheduling security. Software flexibility and customization make it easy for planners to sit at a desk and think, “if I look at this screen long enough and make a few adjustments, our production schedule is going to work perfectly.” Nothing could be further from the truth. To avoid production planning mistakes that can’t be seen on a computer screen, it’s important for production planners and schedulers to get out on the shop floor and interact with production personnel. An active presence on the shop floor enables planners to personally see what’s happening and double-check ERP calculations against the physical reality of actual manufacturing operations.Attempting to do tomorrow’s planning with yesterday’s tools. Many manufacturers, especially small-to-medium-businesses (SMBs), attempt to do production planning and scheduling with legacy systems or data manipulation tools poorly equipped for the task. For example, Excel is good for exporting reports and providing some data analytics, but it makes a poor production planning engine.Any modern, integrated ERP system such as VISUAL is able to process data, lay out a production schedule, and then provide a set of reports that will indicate any problems that need to be addressed. Good ERP systems that are fed the proper data will do all the math and produce an appropriate production schedule. It’s important for production planners to let the ERP system manipulate the data and provide scheduling answers so they can use their time to focus on solving problems.Ignoring maintenance for production. Complex discrete manufacturing has a lot of moving parts, including high-performance machines that need considerable maintenance and fine-tuning. If machines are out of calibration and not performing at full potential, production slows as workers struggle with inefficient or unreliable machinery, scrap and rework increase, and overall product quality suffers, all of which can adversely affect company growth and reputation.In manufacturing there has always been conflict between production and maintenance and it’s easy to see why. Production traditionally wants to keep machines running while maintenance wants to take machines off-line for service so they can continue to operate at capacity.Quality and efficiency are the cornerstone of profitable manufacturing and preventive maintenance is critical for enabling machines to operate at peak efficiency. If manufacturers want to improve performance and optimize productivity, it’s crucial to focus on preventive maintenance and find a balance between that and production.