Mike Melzer, Author at Global Trade Magazine

Today’s manufacturing customers expect fast turnaround times, competitive pricing, and on-time delivery of quality parts with every job. Achieving these outcomes requires a variety of capabilities called the “Great 8 of Manufacturing.” These consist of the ability to:

1. Move parts through the shop job quickly and efficiently
2. Schedule and deliver on time
3. Know your costs
4. Maintain accurate inventory
5. Control your labor costs
6. Get quality right
7. Serve your customers the way you want
8. Grow sales

Falling short in even one of these areas can impact your ability to deliver what customers want. Problems in several areas make it extremely difficult to compete against manufacturers that achieve all of them on a consistent basis. These Great 8 elements are inextricably linked to each other, and low performance in one area negatively impacts all the others.

If you consistently struggle with scheduling, on-time delivery rates suffer. When you can’t accurately determine costs, incorrect quoting can cause you to lose jobs. When shop floor personnel can’t count on having the correct inventory on hand, jobs get delayed, costs go up, and promised due dates are missed. All of which reduces your ability to go head to head with leaner, more efficient competitors.

Failure to attain the Great 8 of Manufacturing often results from using outdated manual data collection to manage the shop floor. If you’re still filling out hand-written time cards, using manual spreadsheets to schedule jobs, and tracking inventory by hand, don’t expect a high degree of accuracy in these areas. If you regularly have to schedule overtime or extra shifts to meet customer deadlines, labor costs will spiral out of control. If sales reps frequently walk down to the shop floor to hand-count parts in inventory before confirming a job, you won’t be able to serve customers the way you want.

Perhaps the worst outcome is the atmosphere and culture that pervade the shop when key elements of the Great 8 are missing. When the same problems occur over and over again, frustration increases, tempers can rise, and a culture of blame rather than accountability takes over. Is it any wonder that productivity, performance, and profitability take a nosedive in such an environment?

Quote to Cash in One Complete ERP System

Making the Great 8 a way of life in your manufacturing business starts with Global Shop Solutions ERP software. Designed for small to medium size manufacturers, this powerful business management tool digitally tracks, measures and organizes performance data in every area of your shop floor. You can instantly see what’s happening throughout the shop floor in real-time and access the data needed to make smart decisions for your business.

A comprehensive ERP solution, Global Shop Solutions touches all critical aspects of the shop floor so that everything gets better. Automating manual processes enables all employees to work more efficiently and become more productive. Costs and waste decline while sales, margins and product quality go up. You can promise due dates to customers with confidence. Everything comes together in one integrated system so that you really can deliver a quality part on time every time.

Global Shop Solutions delivers these outcomes through a complete package of over 25 software applications. Some of the most used applications include:

• Planning & Scheduling
• Inventory
• Job Costing Accounting
• Quality Control
• Shop Floor Data Collection
• Sales
• Customer Relationship Management (CRM)

Global Shop Solutions is constantly adding new features that enable manufacturers to keep up with the increasingly interconnected Internet of Things (IoT). Some of the most recent IoT enhancements include Electronic Data Interchange (EDI), CAD Interface, and Nesting Interfacebsoftware. These offer phenomenal time savings and cost reductions by digitally importing job and customer information that would otherwise require time-consuming manual data entry.

To explore all that Global Shop Solutions has to offer, browse our complete list of software modules.

How the Great 8 Transforms Your Manufacturing From Good to Great

A manufacturing shop floor is like a jigsaw puzzle. All the different pieces have to come together at the right place at the right time to get the job done. The more complex the job, the more pieces you have to contend with. Each element of the Great 8 represents a key piece in the manufacturing puzzle. If even one is missing, you end up with a big hole in the puzzle. Here’s how they work.

1. Move parts through the shop quickly and efficiently.

Having access to real-time production data facilitates fast, efficient movement of jobs through the shop floor. When you can schedule based on your true capacity, jobs get started and completed on time. Machinists know which jobs to work on now and next, and no longer waste time hunting down routers, BOMs, inventory lists or other job information in order to get started.

Having the right inventory on hand avoids the delays that can occur when waiting for parts to arrive. Electronically importing CAD/CAM, nesting, and customer data eliminates time-consuming double data entry. When bottlenecks occur, the data tells you why it’s happening, allowing managers to take prompt action to resolve them. When you know the up-to-the-minute status of all jobs in production, they get done on time with the quality your customers expect.

2. Schedule and deliver on time.

Accurate scheduling and on-time delivery go hand in hand. Global
Shop Solutions’ Advanced Planning & Scheduling (APS) module puts you in control with fully automated scheduling. Enter the job and machine data into the router and other modules, and the system automatically schedules the job for you in minutes, transforming one of the most difficult and time-consuming tasks into a model of lean efficiency.

With APS, you can finitely or infinitely schedule, balance your workcenter loads, and engage in advanced labor scheduling. When customer changes require last-minute adjustments, you can forward, backward and global reschedule with ease. APS also displays how moving a job around will impact the entire schedule.

When multiple jobs get stacked on top of each other due to limited capacity, APS reduces or eliminates these bottlenecks by scheduling the right job on the right machine at the right time. Instead of “safe” due dates, you can tell customers when their jobs will be complete and know you can deliver on time.

3. Know your costs.

Accurate job costing is one of the most important activities in a manufacturing business, affecting everything from estimating and quoting to cash flow and profit margins. It’s also one of
the toughest to get right – unless you track and manage your costs with ERP software.

Global Shop Solutions automatically assigns the correct cost to all labor, parts and materials that go into a job so you know the exact costs as soon as it is complete. Our innovative FLOOOM product determines individual costing components by measuring freight, labor, overhead, outside services, other and material. With this data, you know exactly how much labor and materials went into a part or job.

Knowing your costs improves estimating and quoting accuracy and lets you generate sales and work orders in minutes rather than hours. It helps determine your most profitable products and gives your business a competitive edge over those that can only approximate their true costs.

4. Maintain accurate inventory.

Delays in production often result from disorganized inventory management. Global Shop Solutions provides real-time inventory data from one point of entry for precise management of materials needed for production.

Knowing exactly what you have in inventory and where eliminates the need to hunt for parts to get a job started. Lot bin tracking enables complete traceability of parts. Physical inventory counts are fast and accurate, and often not needed. Paying expedited shipping charges for incoming materials becomes the rare exception rather than a common occurrence. Automatic reorder points ensure materials get ordered before stock runs out, and jobs are never late due to lack of raw materials.

With ERP, you’ll never miss another order for materials needed to keep your production line moving.

5. Control your labor costs.
ERP software provides complete visibility of one of the biggest line item costs in your business – direct labor. Workers electronically log on to each job and the system precisely measures estimated versus actual labor by job or part. When variation occurs, you can determine whether the problem lies with the machine, the machinist, or other factors. Daily productivity reports
help identify problem areas and trend variances so you can take corrective action before they become major problems.

Accurate scheduling reduces overtime costs because jobs get completed on time. Downtime costs decline because shop floor personnel always know which job they should be working on. Separately tracking indirect labor categories helps control those with the highest costs. Whether direct or indirect, Global Shop
Solutions provides a detailed picture of what employees are doing on and off the job so you can allocate your labor dollars appropriately.

6. Get quality right.
You can’t improve quality unless you can track, measure and analyze the sources of quality problems. Global Shop Solutions’ customizable reporting and statistical analysis tools allow you to track and measure quality information in real-time. Nonconforming alerts help identify failure trends as they occur on the shop floor, making it possible to identify and correct bad parts before they go out the door rather than after.

The Document Control™ module makes it simple to manage quality documentation by consolidating all internal and external documents into one central area. Simply scan each document, assign it a location, and you’re good to go. You can also link technical drawings
and job spec sheets to routers, attach inspection and gauge calibration documents to work orders, and attach imported CAD/CAM .pdf files to specific part numbers. No matter what type
of quality documents or level of traceability you need, ERP provides an effective solution for managing all your quality information.

7. Serve your customers the way you want.
In today’s mobile manufacturing environment, fast, responsive customer service creates a real competitive advantage. CRM lets you provide the level of service and transparency needed to build profitable long-term relationships with today’s demanding customers by managing and servicing them with accurate, real-time data.

Instantly check the status of work orders and open quotes with a complete job, part and customer data from one screen. Easily create
quotes, generate work orders, and make changes to existing work orders in minutes. Provide answers to customer inquiries in one
phone call instead of spending hours chasing down information. Available in the palm of your hand, Mobile CRM helps you deliver superior customer service from the office or on the go.

8. Grow sales.
ERP software provides a complete business management system
designed to grow sales. When you schedule jobs more efficiently, it
lowers setup and labor costs, improves throughput, maximizes capacity, and increases on-time delivery. These outcomes improve estimating and quoting so you can give customers the best possible price. Efficient scheduling also reduces the time spent putting out fires on the shop floor, allowing more time to focus on generating new business and increasing sales.

As a manufacturing business, the ability to deliver on your promises is your biggest selling point. When you give customers a due date and follow through every time, it builds trust. When you deliver quality parts on time every time, sales go up. If you’re struggling to grow sales, let ERP run your shop floor so you can focus on
developing new ideas, new products, and new customer relationships.

Wondering How Your Business Is Doing Overall?

Take the Manufacturing Health Test to identify how Global Shop
Solutions can help make the Great 8 a way of life for your business.

________________________________________________________________________

Mike Melzer serves as VP of Operations for Global Shop Solutions and is a 20-year veteran of the company. As a graduate from The Colorado School of Mines, Melzer is an unparalleled leader, coaching the industry’s top talent to ensure the continued success of Global Shop Solutions customers.

If you’re ready to gain the Great 8, call Global Shop Solutions at 1.800.364.5958 or set up a demo online.

If someone took a photo of the health of your manufacturing business, would it look like a “before” or “after” photo?

You’ve seen these kinds of pictures in weight-loss advertisements. In the before photo, an obviously overweight person looks tired, flabby, and woefully out of shape. In the after photo, the person exudes the model of good health – lean, fit, and full of energy. In the manufacturing industry, companies without ERP generally look like the before photo. Those that use ERP to run the business typically look like the after photo.

How Does ERP Turn an Overweight, Inefficient Manufacturing Business into a Lean, Fit, and Supercharged Manufacturing Machine?

Simply put, ERP provides a complete solution for what ails your manufacturing business. Created to efficiently run the entire organization from quote to cash, it touches all critical aspects of the business, allowing you to manage everything from one central location.

The power of ERP lies in its ability to provide the data you need to make smart decisions for your business. When you know what’s happening in every corner of your shop, everything gets better. People and processes become more efficient and productive. Communication between departments improves. Costs and waste go down while sales, margins and product quality go up. You can promise due dates to customers with confidence. On-time delivery becomes a way of life.

At Global Shop Solutions, our motto is “ your ERP software helps you deliver a quality product on time every time.” Our goal is for Global Shop Solutions ERP software to become the most valuable asset at your business. This short video clip provides a brief introduction to how can ERP help you attain that goal.

Manufacturing Before ERP

Manufacturing without ERP generally looks like a mess. Some of the top signs of an unhealthy manufacturing business include:

DATA CAN’T BE TRUSTED.

Manufacturing companies without ERP generally use volumes of paper documents and spreadsheets to manage production. What software they do use consists of disparate programs that can’t communicate with each other. This creates a system rife with manual errors, and inaccurate, outdated information. When you can’t trust the data guesswork prevails, and often leads to low-quality decisions.

HIT OR MISS SCHEDULING.

With no true accounting of labor and machine capacity, rough estimations drive the scheduling process. Manual scheduling can take days to complete. Making changes to jobs in progress becomes a nightmare of complexity and uncertainty. All of which result in missed due dates and dissatisfied customers. It’s no wonder many manufacturers rank scheduling as the most stressful job in the business.

INACCURATE JOB COSTING.

Few manufacturing tasks are more important than precise job costing. Without ERP, few tasks are more difficult. Manual time
sheets often contain errors. Incorrect inventory counts make it
hard to identify true material costs. Lack of real-time data makes
job costing historical rather than current. Estimating and quoting
frequently miss the mark due to imprecise and unreliable data. Not a good recipe for knowing your true costs.

INCORRECT WORK ORDERS AND ROUTERS.

In a “before” ERP environment, work order and routing information often consists of tribal knowledge that resides in the heads of a few people. Jobs often start late because the work orders and routers don’t get to the shop floor on time. Large, complex work orders can take days or weeks to construct. Human error causes shop floor mistakes that lead to costly rework and missed due dates.

POOR INVENTORY MANAGEMENT.

Manual inventory management creates a drag on virtually every aspect of production. Parts and materials get lost or misplaced. Purchasing often buys too much or too little due to imprecise inventory data. Poorly designed number structures can result in duplicate inventory. Material shortages cause jobs to start late and lead to expedited shipping costs. Inventory carrying costs go up, on-time delivery goes down, and nobody is happy about it.

INEFFICIENT MATERIAL MOVEMENT.

Inaccurate inventory is a major cause of shop floor bottlenecks. Manually tracking material movements with handwritten bin cards makes getting the right parts to the right jobs even more difficult. Bin cards get lost. Material movers sometimes forget to record their transactions. Incorrect part numbers deliver the wrong part to the job. Inventory counts for a part or material may not get updated for days after a transaction.

FINANCIAL DISCONNECT.

When the finance function doesn’t reside in an ERP system, it must produce the financial reporting with a different system – a slow, cumbersome, and inefficient process. The lack of integration with production makes the data historical rather than real-time. The numbers become out of date as soon as the next transaction occurs. Manual data entry inevitably results in human error and can take days or weeks to close the books at the end of the month.

EXCESS PURCHASING COSTS.

When the purchasing function can’t communicate with inventory, buyers often don’t know when to order parts, how many, or how much to pay. Incorrect inventory counts can cause overbuying to avoid potential part stockouts. Researching vendors for the best price and delivery times can take hours. Purchasing inefficiencies cause material costs to go up while inventory accuracy goes down.

LOW PRODUCT QUALITY.

Without ERP, quality control is a historical rather than in-the-moment process. Incorrect part numbers on work orders or routers can result in production errors. Manual scrap counts tend to be
unreliable. Jobs often continue after engineers issue a stop order because some people don’t receive the notification. All of which leads to rework, increased job costs, and dissatisfied customers.

DOUBLE DATA ENTRY.

Without ERP, customer specs, drawings, engineering documents, bills of materials (BOMs) and other job data typically require double manual entry – once by the customer and once on your end. This time-consuming process invites human error that increases labor costs and leads to mistakes on the job. The inability to integrate with CAD/CAM, nesting, and other software programs increases the time and cost required to set up and complete jobs.

With a reliable ERP software, none of the above need to happen
in your business.

Manufacturing After ERP

What does the after ERP photo look like? Generally speaking, companies that implement or convert to an ERP system with a reputation for quality and service will experience many of the following improvements.

ONE SOURCE OF TRUTH.

Imagine being able to trust the data you collect. Not just some of it, but all of it – including production schedules and promised due dates. ERP makes it happen by tracking, organizing and providing quick access to information you can count on to be accurate and up to date. Manual spreadsheets, redundant processes, and stand-alone silos of information disappear as you discover what your business can achieve with data you can trust.

FULLY INTEGRATED SCHEDULING.

The toughest job in the plant becomes far less stressful with ERP. Instantly identify your true labor and resource capacities. Engage in “what-if” scenario planning to see how potential schedule changes will affect other jobs. Use finite and infinite scheduling to make long-term scheduling decisions. When you get the schedule right, shop floor personnel always know what to be working on now and what to work on next.

PRECISE JOB COSTING.

ERP gives you certainty in your job costing by providing detailed cost breakdowns for inventory, jobs sequences and cost of goods
sold. It tracks every cost that goes into a project – from labor and parts to setup times, tool and equipment usage, indirect labor,
outside work, and more – with remarkable precision. Estimate
and quoting become more accurate. Cost overruns are easy to spot. Comparing actual to estimate becomes a powerful tool for identifying problems and areas for improvement. When a job is finished you know the total cost down to the penny.

ACCURATE WORK ORDERS AND ROUTERS.

Work orders act as the architectural blueprint for each job; routers provide the road map to get there. ERP electronically sends these critical documents to the shop floor, ensuring the correct versions get there on time, every time. Large, complex routers and BOMs can be built in a few hours rather than days or weeks. Work orders and routers become trusted tools that speed the production process rather than causing bottlenecks.

DIGITAL INVENTORY MANAGEMENT.

Accurate inventory injects a new level of speed and efficiency into the entire production process. With a few clicks of a mouse you can see how much of a part or material you have on hand, where it is, how much is already allocated to jobs, and when ordered parts will arrive. In short, everything you need to know to accept a due date or get a job started on time. Cycle times become simple to track. Physical counts often take hours rather than days or weeks. Inventory stockouts become a thing of the past.

MOBILE MATERIAL MOVEMENT.

ERP transforms material movement by seamlessly aligning with mobile technology. Using handheld scanners and mobile devices, part movers can make material transactions from anywhere on the shop floor. Every transaction is instantly recorded in inventory, keeping the location and number of parts always up to date. Movers no longer waste hours looking for misplaced inventory, and the right materials get to the right jobs when operators need them.

PURCHASING AS A COMPETITIVE ADVANTAGE.

ERP purchasing consolidates all work order and inventory data so you can make smart purchasing decisions. Purchases can be automated, giving buyers time to research vendors and negotiate better deals. Buyers can forecast future purchases based on customer history. The system even identifies when new purchasing actions are required due to job changes. ERP purchasing does all this and more – all from one screen.

REAL-TIME QUALITY.

ERP provides a robust array of tracking, statistical analysis, and reporting tools, including complete traceability of every part that moves through the shop floor. Live production data lets you measure quality by part, employee, machine, defect code and other criteria. The system automatically alerts you to non-conforming parts while jobs are in progress. Producing documentation for ISO and other quality certifications can be accomplished in minutes. When you hold employees accountable for their scrap, the cost of quality declines.

THIRD-PARTY SOFTWARE INTERFACES.

Electronic Data Integration (EDI), nesting and other software interfaces allow your ERP system to seamlessly exchange information with third-party software programs. This eliminates the need for duplicate data entry on the receiving end and prevents double entry mistakes. CAD/CAM interfaces save hours of high-cost engineer time by directly importing CAD/CAM drawings and data in digital format. Nesting interfaces send designs directly to cutting machines to optimize material usage. Payroll interfaces automatically send hours, pay rates, and other data to your payroll vendor for rapid processing. The possibilities for how much time, money and effort integrations and interfaces can save you are endless.

Get Lean and Fit with ERP

Manufacturing is a complex process, no matter what products you make or what processes you use. ERP simplifies manufacturing by providing real-time data visibility at every step of the production process. Knowing what you need to know to eliminate waste, reduce costs, and get quality parts out the door on time every is only a few mouse clicks or keystrokes away, whenever you need it.

Wondering How Your Business Is Doing Overall?

Take the 10-minute Manufacturing Health Test to see how you compare against other manufacturers. Then call us at 1.800.364.5958 start turning your business photo from a before to an after.

____________________________________________________________________

Mike Melzer serves as VP of Service & Operations for Global Shop
Solutions and is a 20-year veteran of the company. As a graduate from The Colorado School of Mines, Melzer is an unparalleled leader helping the best manufacturers use their ERP software to make their shops leaner and more efficient.

To learn more about What Manufacturing Looks Like With (and Without) ERP Software, call 1.800.364.5958 or visit www.globalshopsolutions.com.

The Great 8 of Manufacturing and Why You Need Them

Manufacturing Before ERP

Manufacturing After ERP

Get Lean and Fit with ERP

Wondering How Your Business Is Doing Overall?

most viewed today