Manufacturing is competitive and businesses are constantly confronted with the need to innovate and improve production processes. For this reason, a manufacturing company might look to upgrade their ERP system. Before doing so, we would encourage each company to look at their current ERP system to be sure that it does not already have the functionality to fit their current needs. Next, try to determine what level of manufacturing functionality you need from your ERP.
Once you have determined a need for a new ERP system, it is important to realize that manufacturers come in all shapes and sizes therefore ERP needs differ greatly from one business to the next. If you have a lot of data you don’t need, it’s just noise. If you need the data and don’t have it, you could be hemorrhaging money. Determining what data, you need will help you identify the correct ERP solution for your organization.
Kit Assembly
The needs of any assembly operation involve creating kits, which can range from a simple operation such as a computer bundle, to a more complex operation like a car seat assembly.
The non-stock item is quite simple, you will create an item (finished good), which is marked as a kit item. Each finished good will be made up of the components of the kit (i.e. 1 computer, 1 monitor, 1 mouse, 1 keyboard), all 4 pieces will be sold under a single item. Once the item is sold the individual items will be back flushed from inventory.
Light Manufacturing
As your assembly process becomes a bit more complex, and a need to capture labor costs becomes necessary a light manufacturing solution may fit your needs.
Light Manufacturing “bundles” multiple items into a single SKU (an assembled finished good). Your Bill of Material (BOM), may include stock or non-stock items, which supports roll-up of material and labor costs to establish costs of goods sold for your finished good. Light manufacturing will also support BOM explosion for auto-replenishment.
Additional functionality will include:
- Auto generation of work documentation – If finished good is not in stock the sales order will automatically create a work order.
- Work Order Completion “Stocks” Finish Goods – Finished goods will automatically be placed in stock. Pick tickets can automatically be created.
Manufacturing
When you get into heavy manufacturing BOM’s become more complicated. A need to manage product complexity, balance supply and demand to reduce costs, turn customer demand into actionable production schedules and provide real-time information for your business has become an absolute necessity. Manufacturing has never been under more scrutiny than it is today, and a modern ERP will offer the functionality you need to meet industry standards and federal safety requirements.
- Bill of Material (BOM)/Routing will give your business end to end visibility. You will have the ability to begin production from a sales order, work off a single or multi-level bill of material, apply labor and materials, move your finished product into inventory in real-time, while generating reports and keeping an eye on variances all along the way.
- Production Management, with the rigorous industry demands of today, is extremely important in a manufacturing environment. It will control the entire planning and scheduling process, capture actual manufacturing costs including material, labor, machine, tool, overhead and outside processes and compare planned to estimated or standard. Consumers today have come to expect a superior level of lot traceability, and material tracking will allow your organization the ability to locate raw, in-process, and finished goods within all of your locations.
- Material Requirement Planning (MRP)is an excellent tool to help you determine what is needed, how much is needed and when it is needed. MRP will provide real-time visibility of inventory levels. When used properly, it can take these inventory levels, compare them to allocated and forecasted requirements and let you know when you need to order components or assemblies. The system will also let you know if you can meet a customer’s requested ship date or if not, the best date that can be met based on component lead times.
You may find that you need even more functionality than is mentioned here. From simple to complex manufacturing we can help you configure your ERP solution to maximize efficiency and show you how to get the data you need when you need it with the least amount of effort. Customer satisfaction and profitability for YOUR company are our goals. If you are happy, we are happy. If you have questions about the types of solutions that will best benefit your organization, please give us a call at 440-498-9920.
Also Read: Manufacturing ERP Frequently Asked Questions
