Manufacturing best practices and the implementation of an ERP

MfgSmallThe aim of world-class manufacturing organizations is to function in a perfect supply chain where Kanban-style “pull” systems respond to immediate customer demand without the need for complex trend analysis and error-prone product demand forecasts.  If every aspect of the value stream from the raw materials, to your supplier’s stock room, to your shop floor and on to the customer’s facility went perfectly, there’d be no need for planning.  Everything would hum along in just-in-time mode, with no need to monitor the system whatsoever.

Just-in-time requires forethought 

The problem with JIT, of course, is that the world is not a perfect place, and forecasting both demand and supply is an entirely necessary activity.  Without the ability to predict what products will need to be delivered when, it’s impossible to know what to order and the situation only gets worse if there are long-lead items that need to be procured well in advance of production.  The need to monitor the ROI resulting from minimum or lifetime buys, quantity discounts, and expediting fees multiplies the complexity of this situation even more.

If the supply chain functions are not integrated with internal contracting and accounting functions, legalese or accounts payable could hold up critical material or subassemblies, turning just-in-time into at-the-last minute, and increasing the risk of missed deliveries.

Tailoring the ERP System

To overcome these problems, companies will turn to an ERP System to integrate all functions and create a single, comprehensive view of how material, people and cash flow through the organization in order to create customer value.  Unfortunately, many companies experience a downgrade in the quality and efficiency of their operations due to poor ERP implementations.  Rather than identifying the best solutions for their business, they go with out-of-the-box solutions that are not properly tailored to their business processes, or they skimp on sufficient end-user training and on-going support needed to get the most value from the system.

Working with LBSI to design and guide your ERP implementation based on the SAP Business One suite can help you to capitalize on the benefits of an ERP system and avoid many of the pitfalls.  Contact us for more information on how to optimize ERP for your organization.