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Using Lean Manufacturing Solutions to Eliminate 7 Types of Waste

Using Lean Manufacturing Solutions to Eliminate 7 Types of Waste 150 150 admin

Using Lean Manufacturing Solutions to Eliminate 7 Types of Waste

By: Jaime Bzdok

Lean manufacturing solutions can help reduce raw material costs as well the time and cost of manufacturing while minimizing returns and quality issues. The goal is to deliver products faster, with increased quality, at lower costs, when and where customers want them. The challenge, of course, is how to accomplish all of this. In recent decades, many manufacturers have adopted lean manufacturing solutions to combat inefficiencies, optimize operations, improve business processes, lower operating costs, and increase profitability. The basic concept behind all of this is to essentially do more with less. That means processing fewer transactions with fewer resources such as people, machinery, materials, and energy. Fundamentally, lean is all about greater operational efficiency, continuous improvement and the elimination of waste throughout the organization. Waste is the primary enemy of lean manufacturing solutions. The process of eliminating waste requires addressing seven key kinds of waste: 

  • Inventory
  • Over-production
  • Unnecessary or inefficient worker or machine motion
  • Unnecessary material movement
  • Waiting
  • Inefficient or ineffective processes
  • Rework and scrap 

What makes eliminating waste particularly troublesome is the close inter-relationship between all seven forms of it. For example, if a company is over-producing due, say, to faulty forecasting or misplaced optimism, that causes excessive inventory which results in unnecessary material movement and worker/machine motion and, ultimately, products that don’t ship which impacts revenue and profits. In fact, over-production is perhaps the leading type – as well as cause – of waste. Over-producing triggers excess in virtually every other aspect of manufacturing: work-in-process (WIP), inventory, and movement, all of which cause excess lead times because everything ends up sitting and waiting for other processes to be completed. Many organizations have trouble with this because they mistakenly believe if they manufacture more products they can set the process up once and amortize it out over more parts to reduce cost. What they’re not realizing is that it could actually cost less if they set up multiple times because they’re not paying for overtime or to have excess stock sitting on shelves. The key to waste management: evaluating ALL the right metricsWhat this scenario reveals is that companies utilizing lean manufacturing solutions often focus on a single waste-reduction solution – such as increasing efficiency – when there might be a number of solutions of equal or greater importance. For example, instead of concentrating solely on efficiencies (fewer set-ups) they might streamline operations and reduce waste and cost better with more set-ups. In fact, companies that focus on efficiencies tend to create larger batches because it appears to cost less money. In reality, the opposite is often true. Instead, companies wrestling with waste caused by over-production should gain a better understanding of throughput accounting, focusing less on efficiencies and more on throughput. For anyone not familiar with throughput, it’s the amount of money left for labor costs after subtracting material and outside services costs from sales. So instead of over-producing to take advantage of efficiencies of scale, it’s more important to produce only what’s needed, ultimately increasing throughout and making room for more deliverable orders and more revenue. Throughput, total operating expenses, cycle times, delivery performance – these are all metrics that can be as equally important as efficiencies in achieving waste reduction when utilizing lean manufacturing solutions.

What You Need To Know About Industrial Analytics to Optimize Your ERP

What You Need To Know About Industrial Analytics to Optimize Your ERP 150 150 admin

What You Need To Know About Industrial Analytics to Optimize Your ERP

By: Scott Jessup

It seems like only yesterday that enormous software providers such as Oracle or SAP had the resources and sophisticated tools to integrate business intelligence with enterprise resource planning (ERP). Only big, expensive, enterprise-level ERP systems had the data collecting and processing firepower to conduct analysis on any meaningful level – it was just too expensive to run and maintain.But that’s all changed.Today, ERP systems are remarkably faster, more flexible, more agile, and more powerful – at a fraction of the cost of those legacy systems. Modern manufacturing now has the tools to gather, monitor, manage, and analyze data faster and more easily than ever, using industrial analytics to turn information into knowledge and knowledge into improved processes and performance.Today’s ERP systems now enable even small to medium size businesses (SMBs) to gather vast amounts of information from multiple processors across a complex environment. But the trick is how to easily and efficiently extract and analyze that information in a useful manner.Some people believe that ERP is all about entering information into the system. In reality, it’s more about getting information out of the system and utilizing analytics to create value by identifying weaknesses and bottlenecks that can be fixed so processes can be optimized. After all, inefficiencies are the result of specific behavior (certain tasks are performed a certain way) and the purpose of analytics is to drive behavior.The challenge, though, of using industrial analytics is the possibility of driving the wrong behavior. For example, if someone gets punished every time there’s a stock-out, the purchasing agent’s going to make sure he or she buys plenty, which can lead to overstocking.Industrial analytics vs. reporting
Let’s be very clear – reporting is NOT analytics. Reporting is simply the act of providing data and numbers by themselves don’t provide anything. There needs to be a goal or benchmark to which the numbers can be compared. It’s about using measurements for analysis to identify patterns and establish root causes to improve existing operations. Measurement should never be done just for measurement’s sake. The goal should be the collection and interpretation of real-time information.Reporting is simply a bunch of data. A list of every customer order entered or invoices sent out. Analytics helps you understand what this data means. It can be used to draw an informed conclusion so that behavior can be modified to improve processes, performance, and profitability. Analytics, when aligned with corporate strategy and business goals, can help a company better understand where it is compared to where it wants to be.So what operational areas are important to focus on for industrial analytics? Here are some basic metrics to consider: 1. Machine utilization
It’s pretty simple. If your machines aren’t running, you’re not making money. However, it’s not quite that simple. Beyond simply ensuring your machines are running, it’s important to determine if they’re running efficiently and effectively. For example, are you making the right products at the right time? Are you making them on time?2. Inventory turns
Analyzing inventory turns helps you determine if you’ve got the right product mix. If you’re turning inventory on a timely basis, then you’re producing the right product mix. 3. Purchasing
Analyzing purchasing is popular with many manufacturers. Are you purchasing too much, too little, or just enough? Analyzing inventory and purchasing together can be particularly valuable.4. Supplier performance
A reliable, efficient supply chain is clearly important, especially if you’re practicing a lean strategy. Supplier performance affects everything, from planning to production to costs and customer satisfaction.5. On-time receiving
Most companies just look at what was received and when, but that’s not quite enough. Instead, it’s important to also analyze when it was scheduled to be received. Measuring the performance against the plan yields much more valuable information for optimizing your supply chain.6. Rework/scrap
Rework and scrap are direct costs that just suck money out of companies. However, some organizations miss an important component of this metric, and that’s rework and scrap within work-in-process (WIP). It’s easy to measure rework/scrap against products already manufactured and in inventory, but what’s missing is the fuzzier but vital metric of additional raw material and time consumed doing rework before the product is finished.These six areas of industrial analysis are good places to start if you company is not already analyzing ERP data. However, none of it will matter if your workers are not actively engaged in the analysis. They are the ones most familiar with operational processes and can best drive process improvement. By using industrial analytics to gain valuable knowledge and insights from your ERP data, you and your employees are better positioned to drive positive behavioral changes that can improve overall organizational performance and ultimately profitability. 

5 Considerations When Choosing Manufacturing ERP Software

5 Considerations When Choosing Manufacturing ERP Software 150 150 admin

5 Considerations When Choosing Manufacturing ERP Software

By: Dan Johnson

Choosing manufacturing ERP software can be a daunting task for today’s modern discrete manufacturer. There is wide variety of systems available for enterprises of all sizes and in all industries. So what’s really important in selecting manufacturing ERP software?Here are five important considerations that might surprise you when it comes to evaluating and choosing a manufacturing ERP system:1. Can the system improve your entire business, not just the discrete manufacturing part? Many manufacturers make the mistake of considering only how manufacturing ERP software will handle the discrete manufacturing portion of their business, not how it can affect their entire organization. Simply fixing a specific bottleneck or process may not warrant the disruption that can result from instituting a fundamental change such as installing a new ERP system. Instead, companies should be considering issues that are so substantial they will require chaotic change in order to make significant improvements. It’s these kinds of challenges that should establish the criteria that drives the crucial decision of selecting the right ERP system. For example, let’s say you’re having a problem creating on-time shipments, which increases work-in-process (WIP) and cost of goods sold. This puts your ability to deliver product in jeopardy. This is a very expensive problem that needs to address not just work-in-process, but dynamic scheduling and processes affecting things in addition to WIP, such as supply chain management, inventory control, and delivery.2. Will the manufacturing ERP software pay for itself in 18 months? If you’re a complex discrete manufacturer, you need to look at an ERP investment in the same way you look at purchasing a piece of equipment for your shop, with a similar ROI. Some CFOs will look at the total cost of ownership (TCO) instead, which might go out, say, over five years and is used to drive tax benefits. But that’s not telling you if you’re getting a solid return on investment. And that’s what truly affects your bottom line. Is your manufacturing ERP software going to pay for itself in a reasonable amount of time, which for today’s manufacturers is typically within 18 months?3. What manufacturing ERP software do the competitors I respect use? The reason is simple. If someone’s out there kicking your butt, it’s wise to know what tools they’re using, including their ERP system. Even if you end up buying a different system, evaluating your competition’s ERP software will enable you to gain an understanding of its strengths and weaknesses, which will provide some competitive advantage.4. Is my ERP consultant focused on helping me solve my problems or just on selling me software? Purchasing and implementing manufacturing ERP software can be an expensive prospect for today’s complex discrete manufacturers. That’s why it’s so important to select the right ERP consultant. You want to partner with someone who will help you work through the problems facing your business organization and manufacturing operation to determine the most appropriate ERP solution. 5. Is the software intuitive enough for employees to learn and use quickly? Today’s new employees are often Millennials who are used to quickly and easily learning new apps and operating platforms on their own. Most are simply unwilling to sit in a classroom and be taught how to use a piece of software and learn the theory behind it. It’s important that they be able to embrace and exploit manufacturing ERP software for both the company’s and their own success.     Manufacturing ERP software, chosen carefully and implemented properly, can be a transformational business initiative that can not only improve your discrete manufacturing floor operations, but your entire company as well. These five considerations will go a long way in helping you make the right ERP software decision.

3 Manufacturing Trends and What They Mean For Your ERP

3 Manufacturing Trends and What They Mean For Your ERP 150 150 admin

3 Manufacturing Trends and What They Mean For Your ERP

By: Dan Johnson

Today’s modern discrete manufacturing is definitely not your father’s way of making things. Technological advances, business and operational process evolution, and tightening markets have all contributed to sweeping changes in the manufacturing industry and emerging manufacturing trends that can affect your organization and success. As a result, developments in ERP software for manufacturing, supply chain management, and business processes seem to occur every day to meet rapid and ever-changing industry demands.  Here are three of the biggest manufacturing trends and what they could hold in store for your business and ERP strategy:1. Zero-based inventoryInterestingly, this is not a new trend — it first came to light about ten or fifteen years ago. People have been talking about it for quite some time but have not been able to perfect it. Zero-based inventory means the manufacturer has zero inventory in both raw materials and finished goods. It requires meeting the service demands of customers while minimizing the manufacturer’s variable costs. This, in turn, requires a fairly trick balance of several production variables.To efficiently manufacture finished goods you need to have raw materials, people, machining processes, and perhaps assembly processes. In order to minimize the costs of all four of these elements, it’s important to manage constraints – the things that can limit or negatively impact process performance. This is what many manufacturers have trouble with, which is why zero-based inventory has remained so elusive. How do you manage constraints in the supply chain to reduce operational costs? This is perhaps the number one trend in manufacturing – optimizing processes to minimize constraints, maximize performance, and achieve zero-based inventory.2. Utilizing Software-as-a-Service (SaaS) to reduce operational costsMost manufacturers will readily admit they are not IT experts. They are experts in manufacturing finished goods for customers and prefer not to get bogged down in information technology and ERP-related issues. As a result, increasing numbers of manufacturers are turning to SaaS as a way to reduce operational costs, transfer IT concerns to third-party experts, and enable the manufacturer to focus on their core business.The reasons for offloading IT support with a SaaS strategy can be as varied as the types of manufacturers. A main reason why SaaS is one of the most popular manufacturing trends is that it enables manufacturers to make better use of internal resources. Another is to gain better control over software upgrades. This can mean taking advantage of automatic upgrades handled by third-party software experts, selectively upgrading to accommodate customized or legacy software, or not upgrading at all.3. Utilizing best-of-breed solutions that easily integrate with today’s open-architecture ERP systemsManufacturers are no longer satisfied with buying a single ERP solution, opting instead for an open-architecture system which enables them to take advantage of best-of-breed elements and bring them together in a common platform.This, too, is not a new trend, but one that is still growing in popularity after gaining traction through Oracle around 2005. Within the past three years, though, we’re seeing a rapidly increasing number of manufacturers taking a best-of-breed approach, integrating, for example, Infor Manufacturing, Salesforce CRM, Workday for human resources, and Oracle’s configuration management tool into a customized, open-architecture ERP solution. What’s really interesting is how all three of these major manufacturing trends are being affected by the Internet-of-Things (IoT) and information coming from multiple systems and devices. For better or for worse, this growing avalanche of Big Data is what’s driving business decision-making today.To determine what information is relevant and turning all that data into usable, useful knowledge, companies are increasingly adopting sophisticated business analytics as an integral part of their ERP. IoT is really driving the consumption of business analytics, the problem is, companies are having trouble finding the significance of the data being collected because it’s growing exponentially. As far as manufacturing trends are concerned, what this all points to is the need to ensure that robust business analytics are a major part of your ERP system. Regardless of whether you, as a manufacturer, are focused on achieving zero-based inventory, or moving to the cloud and a SaaS business model, or adopting a best-of-breed strategy, proactive analytics will be a key driver for successful business and operational decision-making.

How IoT in Manufacturing Will Change The Way We Make Things

How IoT in Manufacturing Will Change The Way We Make Things 150 150 admin

How IoT in Manufacturing Will Change The Way We Make Things

By: Dan Johnson

For many manufacturing companies, ERP has been a pinnacle of sorts for technological innovation. Sophisticated ERP applications enabled them to automate a host of functions and processes to help streamline both shop floor and business office operations.And then along comes the Internet of Things. A new wave of sensors and connected devices is unleashing a torrent of data on unsuspecting companies. Research firm IDC estimates that within five years, 40 percent of all data will be generated by machines – some 20 to 50 billion devices. Companies are awash in data, much of it unstructured and unutilized.With the growth of the IoT in manufacturing we’re going to see the parallel growth of a new job category for data scientists – what could be called an “actuary of data.” Someone with the unique skills that enable them to identify the usefulness of data within a supply chain and make it consumable for the manufacturer to improve operations and outcomes. As companies wrestle with how to effectively employ the IoT in manufacturing, lots of thought and discussion swirl around it, much of it struggling with the central question, “what information is critical to me for driving my business forward?” IoT is blurring the boundaries between physical and virtual systems. ERP, supply chain management (SCM), and other systems used by manufacturers will eventually be seamlessly interconnected across platforms, people, equipment, and processes.   Manufacturers lured by the siren song of IoT connectivity and the potential wealth of data associated with it should start by asking themselves several questions: 

  • What new data becomes available through the IoT?
  • Of that new data, what new information does it yield and what new knowledge does it provide that will be a game-changer for my business?
  • How will that information help me serve my customers differently – and better? 

The challenge for ERP systems will be to collect all this unstructured data from devices and connect it with the structured data in the business. Only then can it be effectively analyzed and utilized as a key component of a lean strategy and a catalyst for continuous improvement.According to IDC, only about a third of manufacturers currently utilize the IoT in manufacturing, but early adopters see value in it for cost and competitive advantages, such as: 

  • Using the data for value-added customer services
  • Connecting assets to improve efficiency and reduce downtime
  • Improving supply chain visibility and efficiency

There is no question that over time the Internet of Things will provide a phenomenal benefit to a wide range of industries and businesses. Transportation, process manufacturing, communications, aerospace – anywhere there’s a controlled process – will all be significant beneficiaries of IoT capabilities.However, manufacturers looking to turn themselves into connected enterprises via the IoT should carefully consider the risks. Every connected endpoint is providing intelligence to a larger information system and potentially vulnerable to hacking and attack.But along with risk comes the opportunity for reward. When assets are connected to the IoT in manufacturing, manufacturers can improve performance, optimize scheduling, reduce operational risks and minimize total cost of ownership (TCO).

How CRM Implementation Can Help You Sell Better, Sell More

How CRM Implementation Can Help You Sell Better, Sell More 150 150 admin

How CRM Implementation Can Help You Sell Better, Sell More

By: Dan Johnson

Customer relationship management (CRM) provides a comprehensive store of customer data that can be used to improve the customer experience, increase sales, increase customer retention, and make customer relations more efficient. Successful CRM implementation increases three things internally: Productivity, user adoption, and win rates. CRM use is generally broken into two basic categories – as a sales tool (helping the user be a better “hunter” to locate leads and contacts to successfully nab new business) and as a relationship management tool (a “farm horse” solution that enables the user to cultivate and grow relationships).Truth be told, CRM is not the most effective “hunting” tool. It’s not designed as a lead-development solution, despite what some software providers might tell you. CRM really comes into play once a lead has been turned into a prospect and data begins to enter the system where it can be utilized to help turn that prospect into a customer.But like any software system, CRM is only as good as the data it’s provided – “garbage in, garbage out.” It’s important to validate the customer’s data, make sure it’s usable, have a 360 degree view of the customer’s activities and profile, and an effective way to communicate with the customer.Developing the “customer relationship” part of CRMTo ensure that your CRM implementation is effective it must start with getting answers to a few fundamental questions:

  • Where do your customers come from?
  • What are their traits, characteristics, and preferences?
  • How do they prefer to communicate?
  • If they’re prospects, what can you provide to turn them into customers?
  • What do you need to improve your win rate (what tools and steps are necessary)?
  • What’s next after you win?

Once you have that customer or prospect information in hand (assuming it’s all been entered correctly) you essentially have everything you need to increase productivity by interacting more efficiently and effectively with the customer. Current, valid customer data enables customer service reps to get to relevant data quickly, share appropriate information based on customer preferences and needs, and align it all with changing industry dynamics to keep the customer informed, happy, and loyal. That, in turn, increases win rates. A truly effective CRM implementation is not just about streamlining the sales process. It’s about creating opportunities based on captured data. To do that requires significant user adoption – after all, nothing really good can come out of a CRM system unless the entire sales team puts relevant information into it. To support regular and robust use of the CRM system, emphasize the benefits to the rep, not just the tracking and accountability elements of the system. Equipping reps and the tools and data necessary for doing their jobs more efficiently and with better results drives user adoption, which increases productivity and win rates (see how they’re all related?). Proper CRM implementation helps you: 

  • Manage customer accounts
  • Manage the sales cycle
  • Effectively engage the customer and manage contact
  • Determine what’s healthy – and unhealthy – about customer relationships
  • Improve customer experience and retention

CRM implementation certainly won’t cures all ills, but it will go a long way in helping reps focus on what’s important for the customer and that’s ultimately what’s important for your company.

CRM Data Analytics: The key to improving sales performance

CRM Data Analytics: The key to improving sales performance 150 150 admin

CRM Data Analytics: The key to improving sales performance

By: Dan Johnson

A good CRM data analytics solution enables you to add and combine different sources of data with your centralized customer data to find new insights and increase sales. A good way to begin is to determine the appropriate metrics for your analyses. Metrics are the foundation for good analytics, but it’s also important to not let them be the be-all and end-all for utilizing your data. The right way to look at metricsTo start, don’t bother with metrics that don’t impact your goals. Gathering and evaluating data about processes or operations that don’t improve performance, drive sales, or impact the bottom line is a waste of time.  Reporting can consume time and resources, so why chew them up with an exercise of no real value to anyone?Sales metrics, however, is something virtually every company measures (or should). Typically, they fall into one of two categories:Metrics that motivate salespeople using data most relevant to them and that will influence them in a positive way. Metrics that illustrate business health beyond simple revenue, including closing rates, average deal size; marketing lead qualification rates; sales cycle length; sales team quota achievement percentages; and sales process activities such as numbers of calls, meetings, and demos; to name a few possibilities. The key is measuring relevant, timely data, most easily captured using the robust data analytics tools found in today’s enterprise-level customer relationship management (CRM) systems. This kind of real-time data is far beyond your father’s stale monthly or quarterly spreadsheet stuff. Once you’ve got metrics in hand, the next step is analytics. This is where the magic happens. Data analytics is what creates insights out of information and there’s no one right way to do it. Think of CRM data analytics as a tool for “data discovery.” A way to coax value and understanding out of the data you’ve gathered and get answers to questions that can help generate sales and success.A good CRM data analytics solution enables you to integrate different data sources with your centralized customer data to find new insights. For example, it might be data from external sources such as market research, surveys, reports, and analyst interviews. It could be order information from your ERP system that can help you target timely upsell or cross-sell opportunities.Remember, data’s just data. By itself, it has virtually no value – you have to DO something with it. Data can be looked at in a variety of ways, often limited only by your imagination and tools.Take sales data, for example. You should be able to slice it and dice it in any number of ways, including by individual, team, region, product, and more, comparing weekly, monthly, and year-over-year numbers. Looking at information from different angles might provide new insights, revealing sales trends and opportunities previously invisible. CRM data analytics can reveal the bad stuff, too. In a good way.There’s nothing worse for a sales manager than a salesperson or team in a slump and no one really knows why. CRM data analytics can provide a solution. Tracking and analyzing sales activities such as calls, emails, meetings, and demos can help managers spot bottlenecks and bumps in the road and help salespeople take corrective action. An added benefit is the customer experience improvement that can result from this kind of proactive activity monitoring and management. Increasing selling efficiency through analyticsWhile CRM data analytics can help reveal sales weaknesses, it can also provide selling strength.By accessing data analytics themselves, salespeople can identify their best prospects and more efficiently allocate their time and resources for the best results.Analytics can help motivate salespeople by providing reports on potential sales opportunities to help them figure out how they can grow their business and increase commissions. And when analytics and CRM are used throughout the organization, sales reps can identify prospects and customers who responded positively to marketing promotions or had service issues and turn them into upselling or cross-selling opportunities.With the right metrics and CRM data analytics in place, you and your sales team can gain valuable, actionable insights into sales prospects and opportunities for improved sales performance and greater success.

Utilizing Configure-Price-Quote Technologies to Satisfy Diverse Customer Needs

Utilizing Configure-Price-Quote Technologies to Satisfy Diverse Customer Needs 150 150 admin

Utilizing Configure-Price-Quote Technologies to Satisfy Diverse Customer Needs

By Dan Johnson

Configure-Price-Quote (CPQ) software has revolutionized how companies can develop and implement pricing strategies to sell more products, more profitably. If you’re not familiar with CPQ, it essentially enables manufacturers to streamline production processes around prices determined by market conditions, product demand, and customized customer preferences.Configure-Price-Quote solutions, in conjunction with ERP systems, can also help companies look at the market environment and figure out when a certain discount or special pricing may be appropriate based on product features so the manufacturer can successfully balance maintaining (or gaining) marketshare with pricing to make a profit.CPQ software typically features cloud-based hosting, interfaces for price sheets, as well as data management, analytics, and storage. Because modern manufacturing is so data-driven, robust analytics are a key element of any CPQ/ERP solution. Analytics help manufacturers not only set current prices for custom-configured products, but project future demand and price quotes as well. As configure-price-quote software becomes more common in enterprise resource planning, a variety of alternatives will present companies with different options for handling the important process of setting and resetting prices.So how can configure-price-quote help you satisfy diverse customer demands and sell more custom-configured products? Here are six ways: 1. CPQ technology can help quickly deliver detailed product/price information based on customer preferencesTo accommodate different customers’ needs, you can provide multiple ways to engage with your products. For example, offer a flexible product catalog for an existing customer, guided product selection for a novice, and a “my favorites” function for a frequent buyer. This increases order speed and efficiency, and helps your customers make good choices.2. Enables visual confirmation of ordersSometimes a static image is all it takes, but for more complex products, an engineering drawing helps seal the deal. 2D or 3D image functionality can generate high-level models and quote drawings to support customer collaboration during the configuration and sales process. By rotating and manipulating a product that looks just as it will when engineered, a customer becomes more engaged with the order and your company’s ordering process. And, the more orders you and your channels sell, the more revenue you generate. 3. Generates accurate price quotesProviding the correct price often proves the greatest challenge, but if you can’t give an exact, accurate figure during the quoting process, your customers cannot effectively manage their profit margins. By implementing a rules-based solution that captures detailed engineering specifications and the cost of each change to an order, you can quickly generate a detailed quote with a price that stands from decision to delivery. Providing accurate cost information can also help your customers deliver winning quotes to their own customers at a margin that works for them. 4. Helps create winning bid proposalsAn Aberdeen Group report notes that CPQ deployments inspire 45% more efficiency at responding to RFPs. By implementing an automated documentation solution that’s integrated with your CRM, ERP, CAD, and other systems, you can deliver personalized, compelling quotes that get quick approvals.5. Provides shorter order-to-delivery lead timesA make-to-order or engineer-to-order product that arrives quickly and on-schedule is a key component for satisfying customer needs. Automating the order-to-delivery process with a CPQ solution helps ensure fast production without mistakes. Not only does a manual process take longer, but it also allows more room for errors—and the delays and costs that come with them.6. CPQ helps keeps customers happy after the saleBy proactively reminding your customers of service checks and maintaining a user-friendly portal to access past orders, you can handle maintenance, repair, and replacement issues as well as you do product manufacturing. If you make reordering as convenient as ordering your configured products, you’ll be rewarded with repeat business.CPQ helps put the customer in customer-focused manufacturing which can provide an undeniable competitive advantage. However, there is risk involved, too. If customization gets out of hand, it can drive margins down, destroying profitability. Fortunately, modern ERP solutions working hand-in-hand with CPQ can help optimize and streamline the manufacturing process to support customization, enabling companies to keep customers happy and their margins intact.

Skills Gap Analysis: Bridging the Generational Gap in Manufacturing

Skills Gap Analysis: Bridging the Generational Gap in Manufacturing 150 150 admin

Skills Gap Analysis: Bridging the Generational Gap in Manufacturing

By: Dan Johnson

The American economic landscape is transforming rapidly and the kind of work Americans do has changed significantly within just a generation. In 1950 30 percent of all US jobs were in manufacturing, but by 2015 a mere 9 percent of the workforce was employed in factories or assembly plants.Today, over half of American industrial manufacturing CEOs are worried about finding workers with the necessary skills and desire to fill modern manufacturing jobs. The majority of American teens say they have no interest in a manufacturing career and every year over half a million skilled jobs go unfilled for want of workers with the proper training in science, technology, engineering, and math (STEM).Fortunately, skills gap analysis has shown there’s a solution to this critical problem.Enterprise resources planning (ERP) technology has evolved over recent decades to become an established manufacturing tool that can help bridge the skills gap. Over-40 Baby Boomer workers such as senior managers and skilled machinists with expertise gained through experience (often called “tribal knowledge”) have become used to working with software and can use collaborative tools to share that knowledge with younger employees.Younger workers between the ages of 20 and 30 (often referred to as “Millennials”) are more likely to be college-educated with less hands-on experience and less patience for old-school processes that may have worked for their parents and grandparents. These employees are, by and large, more comfortable with technology and can use software such as modern ERP solutions to quickly get up to speed on best practices and obtain critical historical data for reference and training. In fact, appropriate, highly-usable software is a critical factor influencing job satisfaction for Millennials. Skills gap analysis has revealed that workers between 18-35 years old are twice as likely to leave a company when they are frustrated with the usability of software.However, modern technology, properly implemented and integrated into the manufacturing process, helps recruit and retain new workers. Manufacturing — once viewed as a dark, dirty, and dangerous industry — is being transformed by a new era of innovation. Three emerging trends are providing new hope for skilled manufacturing in the United States: Technology engagement is increasing
55 percent of manufacturing employees now use ERP and 63 percent use it when deployed in the cloud. Technology use is becoming ubiquitous.The workforce is going mobile
54 percent of plant supervisors are now receiving real-time information through mobile devices.Optimism is growing
71 percent of manufacturing CEOs say they are optimistic about the future, despite present concerns. A new focus on technology and training, combined with federal initiatives designed to prepare 100,000 new STEM teachers to teach the next generation of engineers and technicians are giving manufacturing owners and operators new hope.

Mass Customization: How to Meet Customer Demands and Improve Production

Mass Customization: How to Meet Customer Demands and Improve Production 150 150 admin

Mass Customization: How to Meet Customer Demands and Improve Production

By: Dan Johnson

Modern discrete manufacturing technologies make mass customization easier than ever before. As a growing trend in manufacturing, it provides significant benefits to customers and manufacturers alike. For consumers, mass customization enables buyers to tailor products to their unique, individual needs in ways never before possible. For manufacturers, it provides a competitive edge and improved profit margins resulting from consumer willingness to pay more for customization. One of the major drivers of mass customization is the commoditization of previously unique products. Innovative, flexible design and production technologies have made it faster, easier, and cheaper to knock-off new product designs in record time. It wasn’t too long ago that new products took two or more years to come to market, enabling companies to corner marketshare and reap the benefits (and profits) of being the only player in a new market. Today, competitors can create similar products in a few months or even weeks, compromising the ability to be the dominant player in a particular market for long. The only way to create a meaningful product-design differentiator is through customization.In many ways, mass customization can be thought of as an extension of lean and agile manufacturing. Using a lean business model, mass customization utilizes a batch size of one item to meet individual customers’ demands. This requires a robust ERP system and highly-engaged supply chain partners equipped to handle the unique picking, packing, shipping, and delivery issues that can come with single-item orders. The key is to keep the customization part of any order out of the equation until the last possible moment, enabling the manufacturer to use standardized processes and components for as long as possible in the supply chain. This, of course, can put a lot of stress on supply chain management (SCM), so it’s important for the supply chain to be as lean and agile as possible. This requires topnotch efficiency as well as integration and collaboration between the manufacturer and its suppliers and customers.This heightened level of cooperation and integration leads some manufacturers to utilize a hybrid SCM strategy combining lean and agile models with something called a “postponement” strategy. Postponement is simply the act of using standardized processes and materials to partially manufacture a product, right up to the point of customization, and then stockpiling the partially-completed item until it’s ordered for customization. This speeds up the customization process, minimizes waste and inefficiencies, enabling the manufacturer to benefit from a mass production economy of scale on a significant portion of the production while providing customers with the benefit of customization.In addition to sophisticated ERP and SCM systems, manufacturers looking to employ mass customization as a competitive business model should consider several key technologies that can be instrumental in meeting customer demands and improving production: 

  • Social media can help manufacturers interact with consumers and gauge consumer trends and preferences in real time to focus customization options.
  • Online interactive product configurators can provide a fast and user-friendly way to collect customer customization requests and provide a satisfying user experience.
  • 3D scanning and modeling make it easier to create virtual prototypes and visually confirm customer requests by providing a digital proof.
  • Recommendation engines can help customers configure products and prevent them from creating combinations that are either too impractical or expensive to produce or that are bound to be disappointing when customers receive them.
  • Smart algorithms for dynamic pricing enable manufacturers to more accurately price customized products based on difficulty and availability. As trends and demands shift, pricing can shift as well, adjusting to provide the lowest price for products that are easiest to produce at any given time.

Controlling manufacturing costs is crucial for profitable mass customization. Product design modularization, advanced ERP and SCM systems, and flexible production technologies to aid schedule and managing shop floor operations can all contribute to successful mass customization.Done properly, it all adds up to product mass customization that’s profitable for the manufacturer and provides real value – not just a novelty factor — to the customer.