"Companies today must be fast and nimble enough to react quickly to changes in customer demand and do it with little inventory", says president of leading international management consulting firm Mr. R. Michael Donovan. The constant need to reduce cost yet maintain quality, provide on-time delivery and increase revenue all with reduced resources is the need of the hour. With improved business process and revenue in mind, resource planning in Manufacturing industry has increasingly embraced newer technologies, methods and solutions.
Productivity in the Manufacturing sector is influenced by many factors, the most important amongst which are :
When large quantities of raw materials, WIP item or finished goods load up the shop floor you are experiencing the worst nightmare for any manufacturer, the Dead Stock. Money tied up in inventory could be better spent in new product development, expanded marketing and sales, acquisitions, modernization, re-engineering, expansion, debt reduction, and many others.
Improper maintenance of machines will result in low standards of goods produced and increases the maintenance of machines. Machines can be less productive due to improper preventive maintenance. Preventive maintenance is a key factor that keeps the machine running efficiently through the production process.
Efficient Manpower utilization is very essential for any manufacturing industry. Acquisition of the right resource and appropriate work allocation, tracking of resource- time expended in business activities ensures that the business makes the best use of its Man power. Inadequate resource planning in manufacturing will result in lesser operational time and increased wastage of resources.
Allocation of the right resources to the business processes at the right time, execution of processes in a streamlined manner, tracking business results and making the required changes on analyzing business data ensures accountability for all business resources. The optimal utilization of business resources and execution of the business processes for maximum results can be attained only through standardized and streamlined business processes.
This is the obvious consideration you would be contemplating!!!. The answer is An effective management and Utilization of business resources and processes. As your business grows, fragmented processes often develop with it. For example, your production/manufacturing unit may use an Excel spreadsheet to track orders through the various stages of manufacture, but this information may not be exchanged with the sales department, the inventory control department, etc. Data not updated between departments often results in wrong or no information being available for the staffs when they actually need it. Reporting also is an issue, as collecting accurate data across departments, analyzing it and deriving useful data analytics takes time and may even be impossible at times. What you need is a single source of data that offers all departments visibility across the business processes, and ensures effective allocation, utilization and traceability of all resources - material, manpower and machinery.
Your business resources are involved in different business Processes, each of which influences and impacts others. For efficient planning, allocation and utilization of resources your business processes should continuously communicate with each other and share valuable business data. An efficient ERP solution makes this possible as it integrates all of your business functions like Production, Inventory management, Purchase management, Quality management, Financials, Human resources, and sales management into a single system and allows them to communicate with each other.
For example, when your sales team confirms an order, your ERP system would automatically generate a transaction for the finance department, produces work order for the production floor- allocates appropriate Manpower, Materials and Machinery for it, updates your inventory - notifies the purchasing department to replenish stocks of the raw materials used and product sold. A complete ERP system brings to your business a multitude of benefits :
It helps to reduce the overall operational cost as manual & time – consuming processes are replaced by automated, streamlined processes with real time business information. It ensures the acquisition of the right talent, effective allocation & utilization of resources and constant monitoring of the labour productivity. This minimizes labour expenses, enhances precision and lowers error rate thus minimizing losses.
Ability to track inventory accurately and integrate it efficiently with production planning eliminates excess inventory and warehousing costs. The system monitors the inventory movement pattern over a period and provides suggestions for changes in purchase and sales strategy to ensure elimination of non-moving items in your warehouse.
A key advantage of ERP is that it automatically plans your production with the available resources of materials, tools and labor pool, and determines the best possible schedule. In short an ERP solution offers you the most optimal resource planning in Manufacturing.
The system offers key data analytics which provide complete insight into the utilization of business resources, like the Machine downtime report, Machinery Maintenance related Statistics, Category wise Raw Material purchase report and soon. This offers the management a real-time picture of business performance.
Enhanced control over inventory, better allocation of man power, accurate production planning and increased Machinery performance enable manufacturers to improve on-time delivery of products. Delivering products on time is critical to maintaining customer satisfaction.
Using ERP Solution in manufacturing industry improves business profit and ROI(Return on Investment). Acquisition of the right resources at the required time and optimal utilization of them provides assured results.
With so many obvious advantages, a comprehensive ERP system would be the right solution to manage your business resources efficiently and ensure optimal Utilization of business resources. However Choosing the right system that is flexible enough to fit your business requirements is the key.