Don’t have an ERP system? Here are the three biggest challenges faced by manufacturing companies
There are many types of manufacturing companies that all deal with a range of problems in their day-to-day work. Of those who have moved over to our ERP system, MONITOR G5, we’ve identified the three main challenges they all had in common before making the switch.
Exactly what do we have in stock, and how much? When is it time to replenish, and how can I find out our stock value?
Companies that can’t keep track of their stock will often tie up too much capital by holding high volumes, storing a little extra to stay on the safe side. This can also cause trouble when a part which is a sub-component of the product being manufactured is suddenly not available. What’s more, companies that don’t monitor stock are often forced to dedicate time and resources to additional stock takes, so they can take back control. Some companies also replenish stock reactively, only taking action when something runs out instead of making strategic decisions and purchasing parts to meet planned requirements over time.
Companies that don’t know what they have in stock will find it much harder to plan effectively, with a lot of extra work created. But the biggest headache is when delivery to customers is affected by poor material planning, which also ends up being really costly for the business.
Which products are profitable, and which aren’t? Where do we need to take action? Can we rely on our pre-calculations, on which our planning and standard prices are based?
If a manufacturing company can’t depend on its post-calculations, it’s difficult to know which products are profitable, or for that matter, which run at a loss. This often leads to unsuccessful production planning as well as delays, at the expense of customers who don’t receive their deliveries on time. It’s also more difficult to plan in line with actual capacity, as the company has no insight into productivity (for example, direct time and indirect time). This leads to ineffective production and makes it hard to utilize machines in the best way. In these cases, many companies rely on their gut feeling to solve problems, taking a chance on processes they believe will streamline production or the components where costs can be cut. But this doesn’t always work.
Manufacturing companies must quickly give their best delivery time based on the capacity and material available. “When can you deliver?” is one of the most important questions to answer, and keeping promises is easier said than done.
Failing to provide accurate lead times and make reliable deliveries to customers will often lead to great frustration, mainly for customers but also internally, for example, for sales staff who may have promised too much. That's why it’s so important to have an overview of your operations and all the activities that affect delivery time – so you can keep your word. It could be employees who get sick, machines that break down, delays to materials and everything in between. Companies who don’t have this overview will often state longer lead times than necessary to be sure they can deliver on time. This also leads to holding excess stock, to make sure material doesn’t run out.
Thanks to smart, structured functions, MONITOR G5 has solutions to all of these problems.
If you recognize any of these challenges and don’t currently run MONITOR G5, there is much to be gained!
Contact us at [email protected] to start your journey towards more efficient, productive production and more reliable delivery.