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Why Enterprise Resource Planning Systems Fall Short with Rebate Management

rebate management
Archives, Global Logistics, Global Trade Daily, Software

Why Enterprise Resource Planning Systems Fall Short with Rebate Management

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Enterprise resource planning (ERP) systems allow companies to integrate many disparate elements of their business on a single centralized platform – from human resources to supply chain logistics to financial data. While this level of centralization can create operational efficiencies, the breadth of functionality offered by ERP systems also make them less effective when it comes to handling more specialized aspects of your business.

For example, when companies need to design, track, and execute rebate agreements, ERP systems come up short. This is because rebates can be highly complex and dynamic – to manage them productively, companies need purpose-built software that will help them maintain transparency internally and with trading partners, identify where rebate programs can be improved, and react to changes in markets and distribution dynamics. ERP systems allow companies to record the rebates they’re owed, but not much else.

Although many companies get by with the rudimentary rebate management tools offered by ERP systems, supported in parallel by spreadsheets and other off-system tracking, the usefulness of these tools breaks down with complex incentive-based rebate programs and an ever-increasing drive for rebates to stimulate the business growth they were implemented for in the first place. Dedicated rebate management systems, on the other hand, are designed around the needs of complex and dynamic rebate programs, helping companies build more sustainable relationships with one another by giving them a wider range of options and the resources they need to communicate and collaborate in real-time.

How to manage complexity

Global supply chains have never been more complex than they are today – they’re more interconnected, they serve larger and increasingly diverse markets, and they often require vast logistical infrastructure to function. A 2020 survey found that 91 percent of businesses say they “can’t stay ahead of their supply chain complexities.” As if this task wasn’t already difficult enough, COVID-19 threw the global economy into chaos overnight, snapping crucial links in supply chains, straining relationships between manufacturers and distributors, and forcing consumers to deal with delays and unpredictable cost fluctuations.

One of the reasons rebates exist is to account for uncertainty – from economic shocks to shifting consumer demands. They retroactively bring volume, pricing and payments into line with projections, incentivizing trading partners to continue investing in one another. The more contingencies rebates can account for, the easier it will be for companies to predict future conditions and adapt when they change. This is why there are hundreds of different types of rebate agreements – they can be based on seasonality, sales targets, marketing commitments, the performance of specific product lines, and a range of other variables.

Many rebate agreements also change annually (or more frequently) to spur growth and react to market changes as they arise. These are all reasons why these agreements can be surprisingly intricate, which makes ERP systems blunt instruments for managing them.

Increasing efficiency and agility

ERP systems are all about efficiency – by bringing a wide range of business processes (from workflow solutions to communication tools) together on a single platform, these systems are designed to consolidate information, facilitate cooperation, and streamline a company’s processes across the board. This sounds particularly attractive to company leaders in the supply chain sector, who are hyper-cognizant of any opportunity to increase efficiency. An EY survey found that 55 percent of companies expect digitization to improve operational supply chain efficiency (the second-most-cited option) over the next three years.

But can ERP systems really increase the efficiency and effectiveness of B2B rebate programs? By failing to account for a wide enough range of variables and providing little in the way of real-time flexibility, these systems aren’t the drivers of business growth that companies need. According to Gartner, 89 percent of supply chain professionals want to invest in agility. This is what specialized rebate management solutions provide by giving companies the chance to get creative with the negotiation and implementation of deals, adjust those deals as circumstances change, and track every stage of the process on a platform that was built specifically for handling rebates.

When companies rely on ERP systems that can’t accommodate their rebate needs, they’re forced to use other forms of documentation and manual logistics management, such as spreadsheets. This can lead to costly errors and wasted time – hardly the efficiency companies are after.

Building stronger relationships between supply chain partners

Rebates help companies forge stronger relationships by allowing them to negotiate deals that satisfy both parties and giving them the freedom to alter the provisions of those deals as circumstances dictate. Dedicated rebate management platforms provide mechanisms to ensure transparency and accountability, more robust contract management, and the ability to manage hundreds of different types of rebates.

According to a recent Enable survey, more than one-third of companies say they still use spreadsheets to document, share, and sign off on deals. This doesn’t just lead to mistakes, backtracking, delays, and a series of other logistical problems – it can also be detrimental to relationships, as it requires partners to dig through scattered documents and search records that haven’t been properly systematized whenever a dispute or any other issue arises. ERP systems are typically transaction-centric, while rebate management systems make the process of creating, approving, and tracking deals an ongoing collaborative process with dedicated workflow and communication tools.

ERP systems have a clear role to play in helping companies become more productive, which is why rebate management solutions can be directly integrated with them. But rebate management is a highly specialized field – it requires digital tools that are specifically designed to manage complexity, improve supply chain flexibility, and build healthy and sustainable relationships between partners.

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AUTHOR BIO:

Andy James is the Director of Product Strategy at Enable, a cloud-based SaaS solution for B2B rebate management. The software is used by procurement and finance professionals in distribution, wholesale and manufacturing across over 50 industries so that they can have an easy, seamless solution to execute and track their full range of trading programs.

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3pls, Archives, Global Logistics, Global Trade Daily, Special Reports

The Great 8 of Manufacturing and Why You Need Them

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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.

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Archives, Banking, Global Trade Daily, Special Reports

How to Adopt a Powerful Approach to Vendor Payments

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Spurred by the need for remote work capabilities, companies today are trying to move from manual processes to electronic vendor payments. This transition is easier said than done. On the face of it, electronic payments seem more efficient but, without the proper tools and partners, they can end up causing more work. It pays to think about electronic payments from a holistic perspective from the start to avoid this roadblock.

An efficient payment process is one in which you can send a single payment file–containing all your payments–to a payment automation provider, without it requiring any additional follow-up. If you have any questions or need to check on payment there should be one centralized place where you can view all that information while your payment partner handles any payment errors that occur. Linear and simple!

A far cry from efficient

That is a far cry from what happens when you don’t have the right tools or partners in place. Many companies try to piece together different products for different payment types. They may choose a banking partner for sending ACH payments, an outsourced check printing firm, a credit card partner, and a tool for automating the payment approval process.

Seems simple, right? All you have to do is call up your bank or enterprise resource planning (ERP) provider. No request for proposal (RFP) process is required; no need to run vendors and contracts through legal and compliance. Even if each partner can only handle one or two pieces of the process, it seems easier than finding a new partner to handle the whole thing from end to end (which is not as complicated as it sounds, to be fair).

Adding these electronic processes to your back-office as separate elements may feel like a quick, inexpensive way to move to electronic payments, but it could come back to bite you. This patchwork approach creates more inefficiencies that surface pretty quickly and have to be addressed by the accounts payable (AP) team on an ongoing basis.

No time to optimize

It is easy enough to launch a card program, but there is a lot that goes into optimizing that program on an ongoing basis. You will be responsible for contacting vendors to see if they’ll accept payment by card and maintaining a responsive contact at that company that is willing to run the card when prompted. AP teams rarely have time to do that, making their card programs less successful and often below the levels of rebates they were expecting.

Security can also be an issue with in-house card programs. When you’re managing a card program in-house, you’re probably using purchasing cards or T&E cards rather than virtual cards, which likely means you’re not keeping cards secure.

In my role at a previous company, I was the person responsible for running those (unfortunately insecure) card payments. We kept copies of customers’ credit cards in an unlocked drawer. Whenever they were ready to pay, we would go into the drawer, pull the card number and run through our terminal or portal. That’s a pretty common setup, and it’s nowhere near as secure as a virtual card. Also, if the card number changes or is hacked you will need to communicate that to every supplier who has been running your card, adding additional hours of work to your team.

Managing an ACH program poses many of the same challenges. Reaching out to vendors to get them on the program, collecting, and keeping up with changes in banking information is a lot of work that usually nobody has spare time for. Also, storing vendor banking information in a way that is compliant can be tedious and has a lot of red tape. Working with a vendor that is already SOC compliant can save time and money. Few organizations can keep up with all the technology and training needed to prevent ACH fraud, which is the fastest-growing form of payment fraud.

Routine complications

Teams may also find that routine payment runs are more complicated with a piecemeal setup. Instead of running one payment file every time, you’ve got to work with three different systems and partners that aren’t communicating with each other–four if you’re also making cross-border payments. You’re managing too many relationships and projects, and anytime you need data to research a payment you’ve got three different places to look.

There are some banks that offer full AP, but they’re not actually technology providers. They’re just running your payments through one or more vendors and charging you a premium for it. Since banks are not the actual service provider, any time you have a question or a problem, they’re going to have to take it to the service provider and then get back to you. You’re adding time and another layer of communication. Not to mention you probably won’t get the same level of services–payment indemnification, fraud protection and error resolution–from most banks or software providers either, but you can with a payment automation provider.

A scalable approach

Arguably the biggest challenge with electronic payments is vendor enablement–getting vendors set up and then managing their payment data on an ongoing basis because vendor data is dynamic. Neither a bank nor a collection of providers is a large-scale vendor network. According to Nvoicepay internal data, about 25% of your vendors will change their information each year. You’ll need someone on your side to manage those changes.

Our platform is powered by the cloud, making managing a vendor network scalable. Cloud-based payment providers can handle the data all at once on behalf of all their customers that pay that vendor. If the payment provider enables a vendor for card payment, that vendor is enabled for card payment for every customer that pays them within our network. By leveraging the payment provider’s network, you can pay far more of your vendors electronically with no extra effort on your part.

Vendor payments are a process. Up until the last decade or so, we didn’t have technology that could address the whole payment process from end to end. There was no “Salesforce for payments.” All we had was a collection of different payment products. Each of the payment products required a certain amount of manual work on the front end to be able to send the payment and on the back end to reconcile and fix any errors. There was a tremendous amount of inefficiency.

Today, you can hand off all that work to one company–a company that specializes in vendor payments and customer service, and has the process down to a science, using technology to automate as much of your process as possible. Implementation takes just a few weeks. It requires a few hours of IT time, your vendor list, and an hour or two of initial training. The final step in simplifying your entire AP process is sending one payment file and letting your partners handle the rest. Now that’s real efficiency.

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Maggie Schroeder, CPA is a Senior Solutions Consultant at Nvoicepay. She previously worked as an accountant, as an auditor for Deloitte, and as a consultant helping small to medium-sized businesses find partners for business and AP automation software.

ERP
Archives, Global Logistics, Global Trade Daily, Warehousing

Scheduling Matters: 10 Ways it Boosts Your Manufacturing

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Scheduling jobs is one of the most important tasks in a manufacturing enterprise. Given the amount of variability involved in scheduling a busy shop floor, it’s also one of the most complex and demanding.

Loading new jobs into the schedule, or moving around existing ones, involves a staggering array of variables. From work orders, raw material availability and due dates to employee skill sets, workcenter capacity, jobs in progress and more, every detail must be accounted for to achieve accurate, timely scheduling. Performing this gargantuan task manually can take hours or even days to properly align the flow of work on the shop floor. It can also result in costly mistakes that impact productivity, profitability, and the customer relationships you count on.

With ERP (enterprise resource planning) scheduling, it’s a different story. Designed to simplify and automate the process of scheduling work orders in a busy shop floor environment, ERP can process all the scheduling variables in a matter of seconds. It then uses highly sophisticated algorithms to automatically design the most efficient schedule to meet customer due dates. All you do is enter the data and the software does the scheduling for you.

ERP software makes the entire scheduling process faster and more efficient. Work orders that used to take hours or days can be completed in a matter of minutes. ERP also tracks every step of the production process, so you know when a job will be done instead of having to guess. With ERP, great scheduling becomes a way of life rather than a hoped-for event.

Take the Scheduling Litmus Test

ARE YOU SCHEDULING GREAT? SEE IF ANY OF THESE COMMON SCHEDULING SCENARIOS APPLY TO YOUR BUSINESS.

Scheduling is manually updated on a whiteboard or in a spreadsheet.

• Machine/workcenter dispatch lists can’t be trusted.

• Meeting customer due dates often requires excessive overtime costs.

• Uncertainty about your schedule frequently results in unnecessary overtime or inventory buildup you don’t need.

• You spend too much time putting out fires from customers who scream the loudest.

• Scheduling and production tend to be reactive rather than proactive.

• You don’t know if you can take on additional work or when you could do it.

• You schedule work only in buckets rather than true capacity planning.

• Your planner/scheduler has to walk the shop to determine the status of jobs in progress.

• When customers request a change to a due date, you can’t tell how it will affect other jobs.

Did you recognize some of these in your business? If so, your scheduling needs a tune up. Learn how ERP can help your business overcome these obstacles and create accurate schedules with ease.

10 Ways ERP Makes Scheduling Great

ERP transforms the scheduling process by tracking everything that
happens on the shop floor. It then combines the data with information you input through work orders, routers, BOMs, etc. to create the most efficient schedule. Here are 10 ways it helps accomplish the result every manufacturer wants – on time delivery every time.

 1. Know the status of jobs in real time.

One of the biggest advantages of ERP scheduling is the ability to track jobs in real-time. With a few keystrokes, you can easily see the current status of any job, including where it’s been, where it is now, and where it’s going next. You can also see whether it’s on schedule or lagging behind. Having access to this data helps identify bottlenecks while jobs are in progress to ensure they get completed on time.

“The visibility of data in our ERP scheduling module is superb. We can see exactly when every job will start and end, which jobs are on schedule, and which are running behind. At any given time we know who has each order and where it stands in the production process. This allows us to be more responsive to customer needs and still get finished orders out the door on time,” Peter Belezos, President of Bendon Gear, a Global Shop Solutions customer.

 2. Know your true capacity for machines, workcenters and personnel.

When you can’t determine the true capacity of resources and people, you can only guess. With ERP scheduling, the system automatically does the scheduling for you, in minutes rather
than hours, with maximum efficiency and full capacity utilization.

Planners get a real-time overview of all work centers and available labor hours, allowing them to balance loads across resources by instantly identifying which ones have excess load or capacity. They can easily create workgroups and assign alternate work centers for
a resource, and can even modify the labor default schedule, including interjecting holiday schedules.

 3. Easily move or reroute jobs for better forecasting.

When rerouting jobs, the inability to see how the changes will
impact other jobs makes it difficult to adjust your schedule on
the fly. It can also lead to accepting customer due dates hoping (rather than knowing) you can make them.

ERP scheduling makes rerouting jobs simple with short- and long-term “what if” scenario planning. Simply insert a current or new job where it needs to go and the system automatically adjusts the schedule forward, backward or globally. Seeing how job changes will affect the entire schedule improves forecasting and minimizes hot and past-due jobs.

“Any time we make a change to the schedule, the system immediately shows how it will affect every other job. This helped us raise our on-time delivery rates to an average of 97.6%, with 100% for our biggest customer who buys $16 million of product each year,” Dave Dahl, Plant Manager at Alexandria Pro-Fab, a Global Shop Solutions user for many years.

 4. Identify production bottlenecks in real time.

Manual scheduling creates bottlenecks when multiple jobs get stacked on top of each other due to limited capacity. ERP reduces and in many cases eliminates these bottlenecks by automatically scheduling the right job on the right machine at the right time. It also identifies when and where the workflow will be light or heavy, allowing planners to adjust labor hours and move people around to balance the workloads.

“One of our biggest scheduling problems is having jobs go through multiple machines that aren’t configured in work cells. ERP prioritizes the jobs to ensure we schedule each machine in the right order so we get the order done on time,” Gary Bruff, Vice President of Manufacturing at Fullerton Tool, a Global Shop Solutions customer.

 5. Instantly see how new or “hot” jobs will affect other jobs.

How many times have you pulled an ongoing job out of a machine to respond to a more urgent order, knowing you will lose money on the job? Many companies try to solve this problem by hiring more schedulers, which only adds to the complexity of the scheduling process. With ERP, you can insert a hot job and instantly see how it will impact current and future jobs on the schedule.

ERP provides this scheduling picture by gathering data on workloads, available capacity, work center and employee constraints, setup and run times, and more. It then calculates the changes to jobs on the schedule with precision. Planners can finitely or infinitely schedule, balance work center loads, engage in advanced labor scheduling, and immediately see the results. Armed with this information, planners can make decisions to maximize shop floor productivity and job profitability, knowing they can trust the data.

 6. Accept customer due date requirements based on factual data.

With manual scheduling, setting due dates often relies on guesswork. ERP tracks what you’re making, how you’re making it, how many you’re making, and work in progress at any given moment. It uses this data to determine exactly when each job will be finished so you can confidently tell customers when they will receive their parts.

Berlin Gardens, a manufacturer of indoor and outdoor furniture, builds strong customer relationships by providing short lead times and reliable due dates. Scheduling with Global Shop Solutions’ Advanced Planning & Scheduling (APS) module plays a key role in following through on those promises.

“We use the auto work order generation feature in our ERP system to schedule the start of all new jobs. This allows us to build to stock, but only what we need to ship, and plays a critical role in meeting our ambitious lead times and our customers’ requested due dates,” Owen Yoder, IT/Systems Manager at Berlin Gardens.

 7. Salespeople will have confidence when promising due dates.

From a sales perspective, one of the real strengths of ERP scheduling is the ability to turn a “no” into a “yes we can” when customers request difficult due dates. It does this by providing complete visibility of data on every job — from work order number to completion due date — in a variety of formats.

Before accepting a due date, salespeople can quickly determine inventory levels, available workcenter and labor hours, current status of jobs in progress, and other variables that impact production. If the customer’s requested due data isn’t available, planners can perform forward and backward scheduling to see if jobs can be moved around to accommodate the date. Either way, the decision is based on reliable data so sales reps can promise a due date with confidence rather than hoping production will get the job done on time.

 8. Production managers have more time to manage.

With manual scheduling, production managers often spend inordinate amounts of time trying to fix the schedule. ERP allows them to do the job they were hired to do – respond to and manage events on the shop floor that require their knowledge, expertise and judgment.

Suppose a tool breaks and needs to be repaired, or there’s an unexpected bottleneck in a critical phase of a job. ERP scheduling frees up managers’ time to respond to these and other events that require in-the-moment decisions. It enables them to make better decisions and become a more proactive manager of people and resources. ERP also elevates the managerial role to a more strategic level, enabling managers to make decisions that improve productivity and profitability.

 9. Lower production costs.

The ability to schedule quickly and accurately lays the foundation for a host of shop floor benefits, including lowering the cost of setup, production, shipping, and more. For example, when customers order the same part with different due dates, ERP reduces setup time by scheduling multiple jobs of the same part to run concurrently rather than days or weeks apart.

The ability to see your true machine and labor capacity allows planners to avoid unnecessary overtime. Knowing exactly how long each step of a job takes reduces indirect labor because machinists know what to work on next and when to expect it. Personnel engaged in staging and shipping finished goods can track the status of every job in progress and have everything ready to go when the job is complete. Utilizing these and other efficiency improvements, manufacturers can significantly reduce cycle times, making the business more competitive and profitable.

“Our ERP system helps us operate more cost-effectively by lowering costs, simplifying processes, and enhancing cash flow. It also enables us to get our products to market very quickly, giving us a competitive advantage that other middle market firms in our industry don’t seem to have,” Kevin Mason, CFO of Harding Display.

 10. Sleep better at night.

The uncertainty that comes with manual scheduling creates tremendous stress. ERP software takes the stress out of scheduling by simplifying and automating the entire process.

ERP software enables companies to achieve faster cycle times, better on-time delivery rates, reduced administrative overhead, lower labor and materials costs, improved productivity, and more. Companies can manage the numbers in real time (instead of at the end of the month), leading to timely, informed decisions that enhance the future success of the business. More than just a production management tool, ERP acts as an ongoing process improvement platform that empowers the entire organization to become leaner, more efficient and more profitable. You’ll sleep better knowing your scheduling and your business are in good hands.

Wondering How Your Business Is Doing Overall?
Take the 10-minute Manufacturing Health Test and see how you compare in the 8 critical areas of manufacturing.

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Adam Grabowski is the Director of Marketing at Global Shop Solutions. He is responsible for translating the company’s business objectives into successful brand, marketing, and communication strategies to drive awareness, revenue, and loyalty.

To learn more about the 10 ways scheduling boosts your manufacturing, call 1.800.364.5958 or visit www.globalshopsolutions.com.

commodities
Archives, Global Trade Daily, International Trade

5 Business Issues Facing Agricultural Commodities Companies

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Let’s learn more about 5 frequently asked questions on common issues that affect not only agri-commodities companies but span almost all commodities: managing complex supply chains, over-use of spreadsheets, growing amounts of data, analytics, and mobility.

1) Is there a better way to solve critical business problems than relying on multiple systems and spreadsheets?

Most commodities companies have multiple software systems in place to manage commodity trading, risk, procurement, and supply chains. This could be due to an accumulation of systems from mergers and acquisitions, especially in agriculture as many of the large ags traders are looking to gain more control over their supply chains by expanding their global footprint.

They may also have a separate solution for each product, department, or geographic region. However, when data is kept in multiple siloed systems, companies often turn to spreadsheets to connect the dots. Manually entering data into excel is not timely, accurate, or auditable, and it forces companies to base critical decisions on the hope that an individual didn’t make any errors. Not to mention it can be expensive, like when an employee at Deutsche Bank reportedly sent a hedge fund client $6 billion on accident due to a ‘fat-finger’ mistake.

Luckily the company was able to recover the money, but these types of errors can be easily avoided. Rather than take the risk of costing your company millions, or billions, of dollars, commodities companies should adopt an integrated solution that covers the entire value chain and allows users to focus on data analysis instead of data collection. By aggregating and analyzing data all in one system, users can optimize decision making and gain a competitive advantage.

2) How can we get more analytics and reporting from our existing systems?

Commodities companies need to be able to perform predictive analytics in addition to slicing and dicing their data. In order to make better business decisions in today’s complex and volatile markets, analytics need to be in the hands of business users, not the domain of IT and specialists. Using an advanced analytics tool along with an existing solution, such as CTRM software, ERP, or other transaction systems, allows you to bring together all of your data from different sources, discover new insights, and investigate hidden risks faster.

3) Is there a Business Intelligence tool specific to the commodities markets?

Generic business intelligence (BI) tools typically require too much customization to be useful for commodity-specific issues. It can be very costly, both in dollars and time, to add all the functionality needed to manage commodities to a generic system, and in the end, you will probably still need to use another system to handle certain tasks.

There are solutions built specifically for the commodities markets that agriculture, energy, metals, and manufacturing companies should consider instead of a generic BI tool. This will enable them to get the relevant information they need to solve the most important business issues without having to hunt down the answers from separate departments or solutions.

4) How can we better understand and identify commodity risk and opportunities across the supply chain?

Having visual representations of your business makes it much easier to recognize risks and opportunities. For an agriculture company, having a transparent view from farmer to stockyard to processor to producer, all the way to the end-user, will allow you to make the best decisions for buying, transporting, storing, and selling commodities. For other commodity trading companies, it is critical to be able to view the entire transaction life cycle, from trading, risk management, and processing, to scheduling, logistics, accounting, and settlement. Using sophisticated visualization tools to get an accurate view across an entire deal lifecycle, users can identify commodity risk and exposures as well as gain insights into opportunities to improve efficiencies and profit margins.

5) Are there CTRM systems built for mobile?

As more people are conducting business on the go, traveling to customer or supplier sites, or working from a remote location, it is no longer acceptable to have to wait until you are in the office to access data and make decisions. To get the most value out of a CTRM software solution it needs to have all the functionality of a desktop system built in.

Traders, risk managers, and executives can maximize productivity with the ability to perform key functions anytime, anywhere. With mobile apps, traders can enter deals and hedge effectively, even while out of the office. Risk managers can manage risk across the organization and executives can monitor key performance indicators at any time. The ability to react quickly to new deal information and communicate this information to the relevant people in an organization rapidly, accurately, and conveniently, provides companies with a competitive advantage. Using mobile apps eliminates the need for multiple follow-up emails and telephone communications that can be inaccurate and delay contract settlement.

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Eka Software Solutions is a global leader in providing digital commodity management solutions, driven by cloud, blockchain, machine learning and analytics.

To talk to Eka experts please write to info@eka1.com

manufacturing
Archives, Global Logistics, Global Trade Daily

Six Manufacturing Tech Trends to Look for In 2021

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As we enter a new decade, we are bound to see new changes in the manufacturing industry as innovations continue to flood the market. Here are the top trends to look out for in 2021:

Accessible automation is going to be a game-changer in factories. There are lots of robotic solutions coming up for each and every industrial activity, from drilling robots to assembly robots – it is hard to not find an activity that cannot be automated. Better still are the upcoming efforts to introduce human-robot collaboration. Robots can effectively perform preprogrammed routines with precision but they require a human in the loop for when the variables change. Humans have better perception, intuition, and decision-making skills than current robots and there is no current AI able to compete with us on that front. Small companies are embracing mobile robotics since they are cheap, easy to use, customizable, and portable. Some of these autonomous mobile robots can even navigate on their own.

Robots can reduce operational costs, optimize factories’ workflow due to their consistency, and increase the bottom-line.

Another major trend to watch out for is IoT. This is where technological devices are connected to each other remotely and can be controlled remotely. This is a very useful technology especially in large factories that have various machines working in different departments. These machines can be connected and controlled from a single point for purposes of monitoring and process control. With this technology, processes can be more finely controlled directly and be monitored for perfect quality. Additionally, operation managers can collect data from these devices to help in the analysis of performance so that they can change, optimize, and tweak processes for improvement.

IoT is a $267 billion industry that is rapidly expanding and any company that wants to be successful should take advantage of this technology.

ERP systems (Enterprise Resource Planning) software has become pretty sophisticated in the last few years. Any company worth its salt needs such software to be able to organize its resources and plan them for efficient use in their manufacturing processes. ERP systems also help control manufacturing processes starting from supply and delivery, resource allocation, inventory management up to packaging, and sales. These systems have seen widespread adoption due to newer, easier, simpler cloud-based SaaS software that can be used in smaller manufacturing organizations. Their best advantage is the ability to automate and control different areas of manufacturing operations under one system.

Due to the current data awakening phase, we are seeing globally, modern ERP systems have incorporated data analytics to help manufacturers track efficiencies of their processes and utilization of their resources. This will help organizations make necessary adjustments to improve their operations based on the insights gathered from their data.

Manufacturers have started shifting their focus from B2B to B2C. Traditionally, a manufacturer would produce goods to sell to a distributor who would then sell to customers. This was due to the high intensity of manufacturing processes back then which required the total focus of the manufacturer denying them the ability to market their goods. Now, modern technology has eased these pain points making manufacturing simpler and more efficient. This shift is beneficial to both the customers and manufacturers. Customers will get new goods straight from factories very cheaply due to the elimination of the distribution chain that added fees on products.

Manufacturers on the other hand will gain more since they can command retail prices rather than wholesale prices used for distributors resulting in higher profits. Also, they can deliver much faster to the market due to new technologies that help them produce new prototypes and send them to market faster. Manufacturers will have a solid grip on their brand’s visibility eliminating the risk of its dilution by outsourcing distribution to third parties. By selling directly to customers they have better feedback on their products and can use data gathered to improve production.

Artificial intelligence and machine learning are the current buzzes in technology. Scientists are trying to create computer systems that mimic human activity to help automate complex work processes. Even though the technology is not yet there, it still is pretty good. AI has been incorporated in assembly robots to assemble vehicles by Tesla when they needed to produce and ship high volumes of the Model 3. With AI you can run a factory without humans, the only human input being the management of processes.

Another place AI and machine learning have found good use is in data analysis. AI can recognize trends to help you steer your operations towards the current market demands. Machine learning, on the other hand, learns and makes logical conclusions from data such as when to repair, when to produce more or how to increase efficiency. AI can help you make informed decisions based on your organization’s data, along with giving you advice on how to run operations to increase the bottom-line.

Industry 4.0 is the most important technology today in manufacturing. What is Industry 4.0? This is the synergistic integration of IoT, Cloud technology, robotics, advanced computers, AI & ML, and the human workforce. When put together, all these aspects create the ultimate modern manufacturing organization.

Imagine a factory with all these technologies, starting with IoT to connect all machines and devices, Cloud to connect to remote workstations, use software and coordinate efficiently remotely, robotics to perform tedious manufacturing operations and AI&ML to help coordinate complex operations. This is the current modern factory and with all these efficiencies, products are guaranteed to be of the best quality. When you combine the human workforce into this equation and you have an almost alien-like factory that none of the factories in the 1900s can ever dream of competing with.

Even better, 3d printing has become advanced enough to print metal parts thus eliminating tooling costs. Printing products layer by layer will most definitely be intriguing since you can now control the smallest parts of the product

2021 will definitely be interesting, given the sheer number of technologies we expect to see rolled out in the market.

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Since her teen years, Bethany Watson was always interested in writing and esports, so she decided to merge these two passions by choosing the career of a journalist who mostly writes about trends in eSports. She regularly contributes to the major media publications in the niche and serves as an editor for datingjet.com.

ERP
Archives, Commentary, Global Trade Daily, Special Reports

5 Tips To Avoid ERP Failure And Turn 2020 Disruption Into Success

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The trials of 2020 have put many businesses in a mode of transformation. For some, that can mean changing anything from their internal operations to the services and products they offer.

Due to advancements in digital technology, massive change was well underway in numerous industries before the pandemic. Enterprise resource planning (ERP) has been a central part of those changes as companies learn to organize and analyze data and use software applications to automate business functions.

But while the main goal in acquiring ERP is to streamline processes and increase productivity, it can be difficult to implement without the right combination of people, training, and technology. Failure with ERP implementation happens for many reasons, and knowing how to avoid those pitfalls is critical to a company’s growth and survival in these trying times, says Joel Patterson (www.JoelPatterson.com), a workplace culture expert, founder of The Vested Group and ForbesBooks author of The Big Commitment: Solving The Mysteries Of Your ERP Implementation

“Many businesses are aware they need to adopt digital technologies to compete in today’s market, but the fear of failure holds some back,” Patterson says. “Often, the barriers to successful ERP implementation have less to do with the software and more to do with communication- and employee-based issues.

“A change of such magnitude in a company requires solid and consistent change management, in which company leaders work well with outside consultants, but more importantly appreciate the importance of their workforce as much as the need for change.”

Patterson offers five tips on how to avoid failure in ERP implementation:

Tie ERP into long-term planning. One reason for engaging in an ERP project is to improve processes for the long haul. Therefore, an organization’s leadership needs to have a vision for the timeline that makes sense for their industry, typically at least 5 years. “It’s a key question for many businesses, especially in terms of selecting and implementing ERP,” Patterson says. “For example, it would be a big mistake to choose a product that doesn’t allow you to easily add new companies or service lines if expansion is a component of your strategic plan. Create a roadmap and share it with your IT partner.”

Put people first. Patterson says that having a solid work culture in which employees, their treatment and their betterment are prioritized is necessary for any ERP implementation to succeed. “You can have great ERP software,” he says, “but your employees are your greatest asset. Listening to them helps the overall effectiveness of the system going forward. If your culture is a mixed bag of nay-sayers and disengaged managers, projects of this magnitude are doomed to fail.”

Get buy-in across the organization. It’s common for people to fear or resist change, especially employees who have been with companies the longest. “When an organization is made up of people who understand the reasons behind what is being done, then they are more likely to be on board with the changes,” Patterson says. “How will these changes not only benefit the company, but more specifically, how does it impact their daily lives? These details need to be clearly laid out.”

Cut out bureaucracy, delegate responsibility. “The consulting team needs to be allowed to play the role they were hired to play, and you need clearly defined decision-makers on the project team,” Patterson says. “Otherwise, too many people wrestling over decisions can bottleneck projects. Your project team should walk you through each stage, and your company needs to establish a good governance structure in which each person knows their role.”

Prioritize aftercare. The next set of challenges comes when the company is running the new system on its own. “You can’t overlook the potential for problems,” Patterson says. “That’s why you want a partner who offers ongoing support. Assign teams to gather data about how employees are using the software, what issues they are encountering, and how to make it more effective overall.”

“In any ERP implementation,” Patterson says, “leaders need to stay connected with their employees and keep departments aligned while encouraging them throughout a sometimes challenging process.”

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Joel Patterson (www.JoelPatterson.com) is the founder of The Vested Group, a business technology consulting firm in the Dallas, Texas area, and ForbesBooks author of The Big Commitment: Solving The Mysteries Of Your ERP Implementation. He has worked in the consulting field for over 20 years. Patterson began his consulting career at Arthur Andersen and Capgemini before helping found Lucidity Consulting Group in 2001. For 15 years he specialized in implementing Tier One ERP, software systems designed to service the needs of large, complex corporations. In 2011, Patterson founded The Vested Group, which focuses on bringing comprehensive cloud-based business management solutions to start-ups and well-established businesses alike. He holds a bachelor’s degree in Business Administration from Baylor University.