• Visual Business Solutions | 6225 Old Middleton Road Madison, WI 53705

Visual Business Solutions

Helping Manufacturers Solve the Unsolved Since 1993

Proven Production Scheduling Techniques

Proven Production Scheduling Techniques 150 150 admin

Proven Production Scheduling Techniques

By: Jacques Pelletier

Production scheduling boils down to two very simple questions: “what should be done first?” and “who should do it?” In technical terms this is referred to as establishing “priorities” and “capacity,” both of which are used to determine the timing for performing a task – the simplest definition of production scheduling. Unfortunately, many manufacturers have trouble with production scheduling and for a number of reasons. Often they’re able to produce quality products and ship them on a timely basis to customers, but they struggle with a set of inadequate or inefficient planning and production processes, unreliable or inaccurate information, ad hoc responses to unexpected issues, and a myriad of other challenges to production efficiency and effectiveness. At the heart of the production scheduling problem is human decision-making that is too often based on guesswork, opinion, and faulty information. Fortunately, ERP systems were developed to address these very issues. There are three main benefits associated with production scheduling: 

  • It helps you understand how much of your manufacturing capacity is already occupied
  • It identifies possible future threats to on-time deliveries
  • It helps your production, procurement, and shipping departments work together as a team

To implement reliable and effective production scheduling, it’s important to:

  • Have a good definition and understanding of your resources and processes
  • Know your capacity for any of those resources
  • Update and maintain accurate times for production set-up, routings, and the cycle time for any routing operation
  • Keep and manage a calendar of availability of all resources and exceptions such as maintenance and downtime

Identify and avoid production scheduling bottlenecksConstraints – more commonly known as “bottlenecks” — are a main adversary of any efficient manufacturing operation. They can be defined as any facility, function, department, or resource whose capacity is equal to or less than the demand put upon it. Effective management of bottlenecks is a key to productivity and profitability.The Theory of Constraints is a methodology for identifying bottlenecks that limit manufacturing and finding ways to improve or work around that bottleneck so that it is no longer a limiting factor in production. Often the fix is more expensive than the limitation, and so work-arounds and best-practices become the most efficient way to deal with bottlenecks.Some recommendations for increasing capacity at a bottleneck include: 

  • Improving bottleneck processes as much as possible
  • Adding resources at the bottleneck operation when cost-effective
  • Adjust your production scheduling to minimize overall demand on the bottleneck
  • Always have a part in process at the bottleneck to avoid as much delay as possible
  • Always have the bottleneck working even when other operations are idle
  • Minimize downtime by adjusting maintenance schedules around the bottleneck and keeping resources available as much as possible to meet its needs

Sometimes, in an effort to minimize bottlenecks, manufacturers will fall prey to a desire to optimize set-up in an effort to improve production operations, but end up hurting their ability to produce the correct amount of quality goods in the amount of time required. The lesson here is don’t optimize for optimization’s sake. Some processes really are better left alone.Production scheduling best practicesProduction scheduling is a juggling act that requires keeping a lot of elements moving. This requires a level of focus and efficiency that can be challenging for anybody. In an effort to make production scheduling as easy as possible here are some best practices you can employ:

  • Optimize set-up where needed to ensure quick turnover on the production floor without sacrificing your ability to effectively produce goods
  • Work should be based on material availability as much as possible
  • Schedulers should have knowledge of what’s happening on the production floor at any time
  • Routings should reflect all the products that need to be built on the production floor
  • Schedules need to be able to change based on evolving priorities and available resources 

In manufacturing, every product in production is competing with other products for resources. Proper production scheduling is vital for bringing order to potential chaos and ensuring that all goods are produced in the right quantities at the right time. 

Why You Need a Production Cost Management Plan

Why You Need a Production Cost Management Plan 150 150 admin

Why You Need a Production Cost Management Plan

by: Jamie Bzdok

A modern discrete manufacturing facility utilizes a highly-complex, integrated infrastructure of processes and equipment often developed using one of the several proven efficient-manufacturing strategies such as Just-in-Time (JIT), Six Sigma, Lean and Total Quality management (TQM).All of these processes require efficient managing of the wide variety of material and human resources needed to manufacture a certain amount of finished products in a given period of time. To do this successfully requires a proper production cost management plan designed to minimize expense and maximize profitability through the careful managing of all manufacturing process costs. Effective production cost management involves managing several key elements:Resources: This includes all material and human resources necessary for production – manufacturing operations personnel, equipment, as well as the raw materials and other components that go into the finished product.For production and scheduling purposes, these costs really equate to time – the amount of time required for workers and the equipment they need to produce the specific quantities of finished goods in the time period agreed to with the customer.A good ERP platform is an ideal tool for helping effectively manage resources as they relate to production planning and scheduling. It can alert managers that production is over capacity and additional resources, such as more equipment, workers, or time (e.g., overtime) need to be scheduled. In fact, if capacity is not properly defined and established at the outset, accurate planning, scheduling, and resource management are virtually impossible. Nothing drives up production costs faster than to constantly schedule overtime to meet production schedules because capacity requirements were not properly accounted for.Material Planning: Also known as material requirements planning, this process is so closely linked to capacity requirement planning that the two processes have been gradually integrated into a closed loop system commonly called manufacturing resource planning (MRP). MRP is an integral component of best-practices ERP.Once capacity has been determined, it’s important to plan to have the right raw materials in the right amounts available at the right times for production. Accurate material planning enables material deliveries to be precisely timed to meet production needs as they occur. Inaccurate material planning can quickly drive up production costs if too much or too little has been purchased or is not available at the right time, delaying production and further driving up cost. To streamline manufacturing and control costs, material planning and production scheduling must go hand-in-hand.Finance: To manufacture products profitably, it’s crucial for an organization to understand all of the costs associated with production. Only with a complete understanding of production costs can effective financial decision-making take place to determine if a product should continue to be manufactured and if new product lines, equipment, and capabilities are required. Without this kind of knowledge, decisions are made based on assumptions and guesswork, not facts. Once again, an ERP software can help companies track actual production costs and analyze them. However, to do that accurately, it’s vital to ensure that all costs are kept up to date in the database. Analysis and decision-making are only as good as the data going into them. Clearly manufacturing has come a long way since the introduction of mechanized, and more recently automated, production. With so many processes, elements, and cost centers involved in modern manufacturing, it’s absolutely essential that careful production cost management is used to maximize profitability. Without it, business growth and success will be limited.

Cost Reduction Strategies: Closing the Gap Between Estimated and Real Costs

Cost Reduction Strategies: Closing the Gap Between Estimated and Real Costs 150 150 admin

Cost Reduction Strategies: Closing the Gap Between Estimated and Real Costs

Accurate costing is fundamental to profitable manufacturing. If you don’t understand and control your costs, you cannot be profitable. Unfortunately, the cost of operating a manufacturing business is not entirely straightforward, with direct and indirect expenses such as material costs, utilities, wages, rent, and more. It’s relatively easy for costs to creep up, gradually squeezing profits to the point where it becomes clear that you need to consider some cost reduction strategies. So how do you get a handle on costs? It starts by understanding the two basic costing options: standard and actual. By tracking your standard or actual costs, you can compare them to your forecasts and better understand why your profits aren’t what they should be. This, in turn, will help you formulate cost reduction strategies.Standard and actual costing: what are they?Every ERP system has some mechanism for tracking costs by standard or actual costing methods, although some only accommodate standard costing, often considered the more traditional approach. Standard costing requires you to assign some predetermined estimate values to each manufacturing element – materials, labor, and overhead. Often discrete manufacturers, who produce large volumes of standard products whose raw material costs vary little over time, prefer standard costing because it can be a “set it and forget it” approach. Any change in cost is considered a variance due, say, to different labor requirements or the number of components needed.For cost reduction strategies, standard costing’s variances enable you to evaluate the root cause of a costing discrepancy and develop a solution for it. In general, standard costing is more common in manufacturing because inventory valuation is simplified and it’s easier for accounting to maintain, manage and reconcile.Actual costing requires the manufacturer to assign constantly-changing costs to every component in the manufacturing process, every time, to get an actual price. This approach tends to be more work, but produces more accurate cost reporting. As you might imagine, it’s the method preferred by process manufacturers such as job shops with variable raw materials and volatile pricing. One benefit to actual costing is that median prices can be determined by reporting inventory at a weighted average over time, which can help with forecasting.Accurate estimating: it’s all about the dataWhichever costing methodology you employ, it’s crucial that data that going into your ERP system is as accurate as possible. That ancient computing saying still applies – “garbage in, garbage out.”Depending on your stage of ERP utilization, costing data will vary in quality. A recently implemented ERP system might be populated with initial information gleaned from tribal knowledge –a mental “data dump” from knowledgeable workers. Over time, that data will be replaced with more accurate data accrued from actual material purchases and real labor costs, enabling the ERP system to make estimating suggestions based on the history it now contains. Armed with that knowledge, you can more easily introduce variables into your estimates, such as inflation or product variations. A large part of manufacturing costs, of course, is labor and performing processes that may be, in part, developed and revised by experience and tribal knowledge. A sophisticated ERP system such as Visual enables can enable you to incorporate tribal knowledge and test it against known, standard processes entered into the system. Variances or discrepancies between estimated costs and actual costs can reveal process deficiencies or even omissions that may be affecting labor estimates and driving up actual costs. As accurate data increases in the ERP system, including a range of possible variables that can affect pricing, you’ll find that expected costs will increasingly mirror real costs, enabling more accurate estimating and closing the gap between estimated and real costs.

3 Manufacturing Trends and How They Can Affect Your Business

3 Manufacturing Trends and How They Can Affect Your Business 150 150 admin

3 Manufacturing Trends and How They Can Affect Your Business

By: Dan Johnson

There’s little question that the manufacturing industry is experiencing a sea change in how it does business. Over the past several years, and even decades, off-shoring led many companies to rethink how and where they made goods, while the more recent on-shoring trend did exactly the same thing in reverse.Today, data drives everything. Evolving business models and hyper-efficient manufacturing strategies such as Lean and Just-In-Time (JIT) use data to streamline manufacturing operations and make them more nimble and responsive to customer demands and marketplace trends. Data informs every business decision and underlies the three manufacturing trends we discuss in this blog post:  1. Less is more.
Manufacturers are beginning to embrace the concept of less-is-more, which involves less of everything. By “less” we mean smaller production lot sizes for greater flexibility, fewer chokepoints to increase efficiencies, and smaller, controlled runs that meet customer demands in a more timely fashion without being a slave to set-up costs.Even manufacturing efficiency strategies such as Material Requirements Planning (MRP) can be affected – and improved – by less-is-more. The original intent of MRP was to enable manufacturers to build inventory based on predicted inventory (and predicted deviation of inventory) that was going to be consumed in a manufacturing process. This would enable Purchasing to have the raw materials required for a manufacturing process on hand, ready for use, when they were needed. But some manufacturers are finding that going to back to the traditional managing of a baseline inventory is a more efficient way for them to handle inventory replenishment management. The result? They can achieve greater throughout and a lower cost basis – again, less is more. For some, this may sound like heresy. After all, MRP was a phenomenal breakthrough in the quest to automate inventory management. But here’s the reality – 80 percent of what an ongoing manufacturing operation consumes is a stable, known quantity. It doesn’t change much so there’s really no need to include this in planning. In fact, this stock is better managed on the shop floor by the workers who consume the material. If it’s managed on the shop floor instead of by a planner in the MRP system, inventory and costs will go down. MRP will only add frustration. Less is more.2. Customers are becoming empowered to participate in manufacturing strategies. 
Technology, connectivity, and the availability of data have made customers significantly smarter and more engaged in business decisions than ever before. Manufacturers that see this and empower customers to take an active role in what, how, and when they manufacture products stand to benefit substantially from this new relationship. Customers are no longer just a revenue source, they’re a source of valuable information and inspiration.3. The value of agility is increasing.
Agility in manufacturing trends means the ability to engineer on the fly to meet customer demands and then quickly and flexibly implement a production process with that less-is-more mentality we discussed in manufacturing trend number one. The importance of agility in manufacturing is not altogether new. In fact, in the early 90’s manufacturers began to notice that rapid changes in the marketplace were beginning to outstrip manufacturing’s ability to adapt. It became apparent that manufacturers must adjust quickly or die.   Agility essentially involves a fundamental approach to streamlining production to maximize cycle-time reduction. An agile manufacturer engages employees and management in continuous business process improvement to reduce steps, resource consumption, and costs. An agile manufacturer is faster, more flexible, and more cost-efficient. These are by no means the only manufacturing trends taking shape this year. Every industry segment, geographic region, and type of enterprise could probably generate a completely different list of manufacturing trends with no trouble at all. But these are certainly major ones we’re seeing that are poised to affect manufacturing this year and for years to come.    

Cloud Migration Strategy: Manufacturing and The Cloud

Cloud Migration Strategy: Manufacturing and The Cloud 150 150 admin

Cloud Migration Strategy: Manufacturing and The Cloud

By: Dan Johnson

It seems every industry and application is jumping on the cloud bandwagon and manufacturing is no exception. The cloud is a remarkably efficient solution for manufacturers facing increasingly competitive global markets, tighter turn-around deadlines, and rapidly evolving consumer trends.While traditional on-premise systems such as ERP have served their purposes well, times are changing and it’s getting tougher to maintain legacy systems in the face of more flexible and easily scalable cloud alternatives. Many manufacturers are now developing a cloud migration strategy to help them address a wide range of challenges and issues, including automating and implementing sophisticated manufacturing processes. Welcome to “cloud manufacturing.” Increased flexibility and control is perhaps the number one benefit of cloud manufacturing and migrating ERP computing functions to the cloud. In a traditional on-premise computing scenario everything is managed by IT. If manufacturing wants to make a change, they have to go to IT first, which checks the requested change against the budget, creates a value statement associated with the change request, and prioritizes it so it may or may not get done. The cloud takes control away from IT and puts it in the hands of the user. It is the user who can quickly see if a software change offers good value and return-on-investment (ROI). This direct control enables the user to actively participate in continuous improvement, which increases both operational agility and efficiency. Developing a cloud migration strategy and transitioning to cloud manufacturing provides a number of benefits across the enterprise, including: 1. Improved application integration and performance The responsibility of application development and updating for cloud-based software rests squarely on the shoulders of the software provider. Cloud-based systems are turn-key, with all the components necessary to perform the desired task included and optimized. Purchasing, installing, and properly integrating the various IT elements and components of an on-premise system; however, is entirely the responsibility of the manufacturer owner.Think of it like acquiring an automobile. Putting together your own on-premise IT infrastructure is like selecting and buying an engine, transmission, frame, body, and wheels separately and assembling them to create a complete car. You don’t have to be concerned with what’s under the hood with a cloud-based system — you’re buying a fully finished car, ready to drive. Everything’s integrated and optimized for maximum performance at less cost in time and money.2. Easy scalability As manufacturing needs can fluctuate with seasonal or marketplace demands, so can the amount of computing power you utilize in the cloud. No need to buy more servers or expand your datacenter – the cloud-based software-as-a-service (SaaS) provider will take care of that automatically. 3. Lower risks and costs If your company is adding business units or opening new locations, integrating them into your IT ecosystem is easier in the cloud. No need to add networks, purchase new hardware, or upgrade software. And should an acquisition not work out, you’re not left holding a lot of extra infrastructure and added expense.The cloud’s certainly not perfect, but it offers so many benefits not available with a legacy on-premise system that it’s hard not to embrace it. With its low cost of entry, rapid scalability and unparalleled flexibility, it’s easy to see why the cloud is becoming a major productivity driver for manufacturers. Still, there are plenty of organizations that are delaying developing a cloud migration strategy for various reasons. They do so at their own risk.

The 5 Risks of Delaying Migration to the Cloud

The 5 Risks of Delaying Migration to the Cloud 150 150 admin

The 5 Risks of Delaying Migration to the Cloud

By: Dan Johnson

There has been so much written about the benefits of migration to the cloud that it’s puzzling why there are still any number of companies that delay doing it. The cloud provides the opportunity to virtually eliminate capital investment in IT infrastructure, and that’s just for starters. There’s also the human resources the cloud frees up from systems operation and maintenance, not to mention software purchases and upgrades are no longer needed. So why the delay?    Some cite security concerns. Others claim their business or manufacturing processes are so unique or proprietary that they can’t see how the cloud could possibly provide the same level of customized functionality they have with their internal legacy system. They unknowingly suffer from “terminal uniqueness” – a condition that paralyzes business owners or managers and prevents them from migrating to the cloud because they are convinced their IT situation is singularly unique and impossible to duplicate.  Cloud adoption, however, is making significant advances in some business areas such as human resources, customer relationship management (CRM), and marketing. Where cloud migration lags is in finance, order entry/execution, and production. Some of this can be attributed to security concerns. A larger issue is that ERP and supply chain management (SCM) software developers have not yet delivered comprehensive SaaS applications for complete ERP/SCM functionality. This is perhaps the greatest current obstacle to cloud manufacturing adoption. However, there is a footrace going on right now between the major software developers to bring SaaS solutions to market, so this situation will change quickly as SaaS ERP and SCM solutions become more readily available and manufacturers quickly adopt them to reap their significant benefits.The risks are substantial for those enterprises that hold back from migration to the cloud, from both an operational and competitive standpoint. Five major risks of delaying migration to the cloud include: 1. Opportunity limitationsCompanies tied to legacy on-premise systems are transformationally hamstrung. The cloud provides the agility to take advantage of sudden business opportunities. The cloud makes finding and retaining the best possible human capital easier as well. The most talented workers want to use the latest tools and not waste time and energy learning a legacy system limited by whatever technology runs it. The cloud enables enterprises to adapt and utilize the latest technologies to gain new efficiencies and encourage continuous improvement.2. Ongoing infrastructure costsAn on-premise IT infrastructure keeps the opportunity to grow the business in the hands of the IT department. And once an investment has been made in infrastructure, it’s hard to let it go. Networks and data centers are expensive, and IT is reluctant to give them up. But expenses continue with every passing day, including electricity, software and hardware upgrades, maintenance, and staffing, to name a few. The cloud alleviates all those issues and enables management to invest elsewhere, where the money can bring more value to the organization. 3. Delayed competitive responseThe Internet and social media have fundamentally altered the commercial landscape. Facts and opinions crisscross the Web instantly. Consumer trends come and go with lightning speed. Disruptive technologies can blindside an unsuspecting brand and turn it from being a market leader one day into a has-been the next. To maintain a competitive edge, no matter what your business, requires the agility, flexibility, and scalability that can only be found in the cloud.4. Business continuity issuesThe business world runs on data. Nothing is more dangerous than service disruptions that can cause an IT ecosystem to grind to a halt because an on-premise data system has been compromised in some way. The cloud provides a safe, efficient, and flexible way to disperse IT assets and redundancy across the country – even around the world — minimizing the possibility of service disruptions.5. Resource drainThe modern, successful manufacturing environment is all about efficient use of resources. Operating an in-house IT infrastructure, especially in a larger enterprise, can be a considerable drain on resources, including personnel, space, power, heating, cooling and the money required to maintain it all. Moving on-premise IT systems to the cloud is a quick and economical way to save resources.Migration to the cloud for most manufacturers should be a question of “when”, not “if,” and the sooner the better. Many of the benefits for manufacturers are the same as for non-manufacturing companies – streamlined ordering and procurement, faster process implementations, improved data collection and analytics.If your company’s not already planning its migration to the cloud, it’s time to get moving. 

Cloud Infrastructure – The Actual Cost of Cloud Manufacturing

Cloud Infrastructure – The Actual Cost of Cloud Manufacturing 150 150 admin

Cloud Infrastructure – The Actual Cost of Cloud Manufacturing

By: Dan Johnson

For any company considering a move to the cloud, it doesn’t take long for the conversation to turn to cost. After all, moving to the cloud is a smart, money-saving move for just about any organization, even complex manufacturing operations, but there are costs involved. In fact, moving to cloud is perhaps the one area where an admission of ignorance regarding cost is far smarter than making assumptions.Unlike the early days of cloud computing when costs were simpler – essentially swapping out servers and software – today things are a little more complicated. Companies need to look past simple capex and opex costs and a little more closely at things such as IT operational services and support, process automation, virtualization, and business processes. To understand the real costs of migrating a manufacturing business to the cloud – cloud manufacturing — you have to put it in context with on-premise system costs. There are primarily three basic elements that comprise an on-premise IT system:

  • Infrastructure: this is the hardware of an IT ecosystem, including such components as servers, routers, cabling, workstations, and firmware. To use a house-building analogy, it is the system foundation.
  • Platform: this is the database and middleware that forms the IT plumbing and wiring, helping to pump data through the infrastructure. 
  • Software: Applications are the furnishings and appliances that run the household and make it functional.

Each of these three components must be purchased, installed, and integrated to create a fully-functional IT environment. In addition, personnel must be hired and trained to operate and maintain it all. Moving to a cloud infrastructure (in this case, we’re referring to the entire, integrated IT system, not just the foundation of it) provides savings across all three elements. Utilizing SaaS ERP for cloud manufacturing can save as much as 75 percent of out-of-pocket infrastructure and platform expenses when you look at the cost of purchasing and upgrading the hardware necessary to install, operate, and support an on-premise IT system.Software costs, however, are approximately the same when compared over a five-year period. The overall cost of the initial license and support fees for on-premise ERP software and the subscription and support costs of SaaS ERP, over five years, are generally a wash.Where there is considerable additional savings, though, is in implementation. Manufacturing enterprises that utilize SaaS ERP often save as much as 50 percent in implementation costs over on-premise software. Further savings, especially for larger enterprises, can be realized in reduced headcount as datacenter functions move off premise and into the cloud.As a cloud infrastructure and cloud computing free manufacturers from the burden of implementing, upgrading, and operating an on-premise IT ecosystem, the newfound flexibility and agility provided by the cloud leaves them poised for innovation and new business opportunities.

The Cloud and Innovation in Manufacturing

The Cloud and Innovation in Manufacturing 150 150 admin

The Cloud and Innovation in Manufacturing

By: Dan Johnson

You can’t go to an industrial technology trade show, conference, or seminar today without someone talking about innovation. In many cases, it’s a fairly nebulous reference to some vague improvement in processes or operational efficiencies. It’s tough to wrap your arms around.However, the importance of innovation in manufacturing can’t be emphasized enough — today’s highly competitive markets demand innovation in manufacturing in order for manufacturers to succeed and grow. And we’re not talking about innovative new products or a trendy new approach to a tried-and-true process. No. What we’re really talking about is innovation at all levels of manufacturing operations – both production processes and management. Let’s be clear – innovation does not come without some risk. How do you minimize that risk? By lowering capex and opex. And one of the best ways to do that is to move appropriate processes and operations to the cloud. This, in turn, reduces infrastructure, and less infrastructure sets the stage for a faster, more agile organization.   Innovation is not possible without agility. Manufacturers looking to gain a competitive edge are turning to the cloud in increasing numbers as a principal means for gaining the agility to drive innovation and growth.The cloud enables turn-on-a-dime responses to changing market trends and conditions, accelerating the product development lifecycle and streamlining supply chain management. The cloud fosters innovation in manufacturing by reducing burdensome IT costs, freeing up resources, and removing organizational and geographic boundaries. Collaboration becomes easier, process improvement faster, and the manufacturing environment more flexible and dynamic in general, priming the pump for innovation.In this modern economy, data drives everything. For manufacturers embracing a Lean methodology or other efficiency-based business strategy, collecting, analyzing, and utilizing ERP data is critical. The cloud provides the virtually unlimited storage space and scalable computing power necessary to make the most efficient use of data and mine its potential for fueling innovative product development.On a more tactical level, the cloud takes operational control out of the hands of the IT department and places it directly with business and shop floor managers who can quickly change and enhance functionality. Cloud-based APIs and modules can be added and removed to accommodate changes and support on-the-fly innovation and improvement. In fact, the ability to integrate, manage, and monitor all the resources on the shop floor through the cloud can have a dramatic impact on virtually every aspect of manufacturing.Managers and workers can directly see improvements in information and process flows that can lead to improved operations and product quality. Real-time data and instructions are managed in the cloud to run processes, improve utilization, and reduce energy consumption. In short, the cloud becomes a core platform for integrating new technologies, driving process efficiency and innovation in manufacturing operations and the finished goods they produce.

How Cloud Computing Can Improve Your Manufacturing Business Agility

How Cloud Computing Can Improve Your Manufacturing Business Agility 150 150 admin

How Cloud Computing Can Improve Your Manufacturing Business Agility 

By: Dan Johnson

The concept of agile manufacturing first popped up over a decade ago as manufacturers were looking for the Next Big Thing beyond Lean manufacturing. Agile manufacturing was seen as a natural evolution, the next link that would take manufacturing from being simply streamlined (“lean”) to flexible and versatile as well (“agile”).Over the past ten years or so, agile has become popular because it’s the ideal business strategy for companies in highly competitive markets, enabling them to respond quickly and efficiently to market changes. Companies that have embraced agile manufacturing typically have strong supplier relationships and empowered employees focused on delivering quality products to meet customer demands.Cloud computing is the next logical step for manufacturers who have come to the agile concept recently or are just now considering it and still using an on-premise IT infrastructure and ERP system. Think of it this way – agile cloud manufacturing is simply taking all those streamlined, agile premise-based systems and processes, stripping away the resource-intensive, on-premise infrastructure and transforming it all into industrial-production-systems-as-a-service.The real power of the cloud is the way it enables manufacturers to spend less time and money managing their IT and more time growing their businesses. Users can now access all that operational functionality in the cloud – process design, production management, business processes, and virtualization, to name a few. An added benefit? The cloud supports closer, easier collaboration with suppliers and customers without proprietary IT walls between them.Cloud computing improves business agility by: Empowering employees The cloud enables workers to do their jobs better, faster, and with greater flexibility by removing the handcuffs of proprietary on-premise systems. Workers today are already used to living in the cloud, so to perform their jobs there as well is an intuitive extension requiring minimal training, unlike having to learn an arcane legacy system. Employees are better able and more inclined to fix problems on their own if they no longer have to constantly enlist IT’s help to program process changes.Fueling growth Cloud-based solutions enable companies to rapidly establish new business units or expand existing operations virtually anywhere without having to expand or integrate IT infrastructure, substantially minimizing both capital investment and risk. They also offer better business results by making it easier to share information with new or existing partners and suppliers regardless of where they are located — around the corner or around the world.Simplifying compliance Rapidly evolving markets and industries can often cause compliance headaches for manufacturers. Aligning processes and products with regulatory requirements can be a daunting task, but migrating to a cloud-based SaaS strategy offers a number of benefits over a legacy on-premise model, enabling enterprises to reign in the complexity, cost, and risk of compliance. Cloud computing supports automatic updates to simplify the process of keeping systems current. It also ensures that everyone in the company has access to the most current information and tools to do their jobs effectively and efficiently.It’s not hyperbole to say that cloud computing and agile cloud manufacturing can transform your business. Cloud computing translates into greater visibility and flexibility across every function and department, providing faster innovation as well as improved productivity and efficiencies.

Manufacturing ERP Systems and the Cloud

Manufacturing ERP Systems and the Cloud 150 150 admin

Manufacturing ERP Systems and the Cloud

By Dan JohnsonMost companies, like people, hate change. It’s much easier to not rock the boat, especially when change can be scary, like moving key manufacturing processes and systems such as ERP to the cloud. The fact is, with cloud-based ERP initial costs are typically much lower because you simply implement the software you need to meet your specific requirements – software-as-a-service (SaaS) — and then access it through your company’s internet connection. The cloud ERP provider hosts and maintains all of the IT infrastructure for you, ensuring that the system is always running, that the data is secure, and that product enhancements are rolled out painlessly without disrupting or eliminating your previously implemented customizations.Meanwhile, software developers continue to improve cloud-based SaaS ERP functionality. As they develop more comprehensive, end-to-end solutions to better meet the evolving needs of discrete manufacturers, the benefits of moving to the cloud are becoming clearer:Faster implementation and return-on-investment (ROI) The flexibility and scalability of the cloud means ERP implementations can be tailored to meet a variety of immediate and long-term needs, speeding up initial implementation and achieving ROI faster. Since cloud ERP requires no additional hardware, your business doesn’t have to waste time procuring and installing IT infrastructure. Cloud ERP can be easily implemented across multiple regions, subsidiaries, and divisions with minimal cost and significant time savings — cloud ERP deployments typically take only 3-6 months compared to the typical 12 months for an on-premise solution. Faster, more flexible configuration With on-premise legacy manufacturing ERP systems, every customized manufacturing or business process change has to go through IT or perhaps an external supplier or consultant, making change slower and more costly. The cloud gives the power of custom configuration to the actual user, bypassing IT and outside providers to achieve faster results while saving time and money. Hosted SaaS ERP solutions are continually upgraded by the provider so employees are assured of working with the latest ERP application version and having previous custom modifications carried forward with it. Better enterprise-wide access to data On-premise manufacturing ERP systems tend to silo transactional data, making it difficult to share between departments and business units. Cloud-based ERP eliminates silos and makes it easier to share data across platforms and the entire enterprise, providing real-time, accurate data that can be accessed via the Internet anywhere, any time on workstations, desktops, laptops, smartphones, and tablets. Enhanced security With cybersecurity a real and growing concern for manufacturers, cloud-based ERP provides better security in addition to improved accessibility.  Many cloud-based ERP solution providers prioritize securing their systems and provide strong, industry standard data security certifications such as PCI DSS and SAS 70 standards compliance. Yes, cloud computing for manufacturers, such as hosted SaaS ERP, is relatively new and for some companies it can be hard to overcome security concerns. But the fact of the matter is that much of your day-to-day computer functionality – personal and professional — is already cloud-based, whether you know it or not. The truth is, security is constantly improving and breaches are more rare than you might think. The benefits of moving manufacturing ERP to the cloud are too great to let a little fear and inertia get in the way.