Each year, The Manufacturer publishes its Annual Manufacturing Report (AMR). It’s probably the most comprehensive report on manufacturing trends in the UK. This year it states that the “strong level of investment in ICT that we saw last year has been broadly sustained”. Diving a little deeper it’s evident that Enterprise Resource Planning (ERP) is by some margin the highest priority for most manufacturers; a spending trend sustained for the past three years.
Helpfully, the AMR also tells us what challenges have led to the introduction of new ICT initiatives. The highest ranked manufacturing challenge for the past two years is ‘Productivity improvement’.
It’s reasonable to infer that UK manufacturing businesses are investing in ERP expecting to improve their productivity. However, ERP market analysts, Panorama Consulting Solutions, suggest that ERP is far from a manufacturing productivity panacea: “The complexity of manufacturing processes and the level of customization and integration required often lead to high [ERP] implementation costs.
“Manufacturing firms implementing ERP software also experience low benefits realization and long payback periods. Although ERP software was originally designed for the manufacturing industry, manufacturing firms have no clear advantage over other industries when it comes to realizing business benefits and realizing an attractive return on investment.” Clearly, ERP systems play a critical role in many manufacturing organisations, especially in materials planning and maintaining good financial controls. If you’ve invested in ERP, but aren’t seeing the payback in productivity, perhaps it’s time to add a little rocket fuel to your manufacturing system?
The devil is in the detail
The absence of detailed, accurate and real-time data collected from the shop floor with easy analysis goes a long way to explaining the manufacturing productivity gap. Most manufacturing companies live and die based on what happens on the shop floor and the reality is that ERP systems don’t provide a sufficiently granular view of the factory floor to enable production managers to accurately measure their KPIs, which makes it impossible to put any plans in place to improve them.
An ERP system may be able to provide a basic (but often meaningless) report of labour ‘recoveries’, but it won’t give granular, accurate, real-time workforce productivity information required to make tangible decisions on the ground.
In order to stand any real chance of optimising your production processes, you need to be able to collect large volumes of data related to the manufacturing environment. This includes (but is not limited to):
- Labour activities encompassing attendance, utilisation, actual times achieved (‘performance’), indirect activities, reasons for speed & quality losses
- Customer complaints
- Quality & rework
- Job Progress & WIP tracking
- Inventory Management
Your ERP solution is not capable of capturing all of this data, and none of it in a shop-floor efficient way. This ultimately results in data not being collected correctly, which leads to insights that are inconsistent, or just plain wrong.
Implementing a separate software solution that allows you to collect and visualise this key production data will not only add significant value to your top-level ERP system but will provide the level of insight needed to find productivity gains on the floor.
MESTEC provides a cloud-based shop-floor data collection and analysis system, giving Production Managers the granular insight needed to make better factory performance decisions in real-time.
Our solution has been built from the ground up to ensure that it is ‘shop-floor-ready’. Operators can start work within seconds simply by scanning their badges and touching a screen to bring up their ‘work to’ list. Our system knows the production schedule and is context-sensitive, so collects and dispenses information that is relevant to the task in hand.
But the real power and value comes from the comprehensive suite of colourful real-time KPI dashboards and advanced analytics providing 1000’s of insights which shine a bright light on all the causes of sub-optimal performance. Armed with this intelligence, you can go about fixing all the problems that have previously never been identified.
There are essentially three layers of information systems in a modern manufacturing business. Top level systems provide information to senior management, finance and sales; factory floor information systems provide insight to managers on the shop floor, and at the bottom, process control systems are used by equipment operators.
For this three-tier model to thrive, systems need to be fully integrated, passing relevant data up and down the chain. The reality is that many plants still rely on manual data entry between systems. This not only wastes resources but is prone to human error and results in information being out-of-date before it is ever seen.
MESTEC’s dedicated solutions seamlessly interface with ERP platforms, removing the need for manual data entry and providing a complete operational overview across the business.
Production planning and scheduling
Another area that ERP falls short is in production planning and scheduling. While many ERP vendors have attempted to bolt on such functionality, again, these systems were simply not designed to handle the complexities that need to be considered to create accurate production schedules. This net result is that many plants are still drowning in spreadsheets.
To provide effective planning and scheduling three core fundamentals must be satisfied:
- You must be able to accurately model the workflow that each and every job must take through the factory and know how long in practice it actually takes to complete each step.
- You must have real-time knowledge of the status of all your WIP jobs: what has been completed, and what still needs to be done
- You must have a comprehensive model of all the capacity constraints in the business: including inventory, machines, people, tooling, jigs, skills
MESTEC and ERP
MESTEC’s Advanced Planning & Scheduling module provides all three of these elements in a single integrated suite to enabling day-to-day scheduling, capacity planning, what-if analysis and scenario planning. Adoption and implementation times are virtually non-existent, thanks to the intuitive interface; and because this powerful combination of capabilities works seamlessly with your existing ERP systems, insight is visible across your organisation.
We offer our manufacturing system ‘as a service’ for a low monthly fee based on the number of touch terminals you need. Our customers typically see a return of between 5 and 20 times their monthly investment.
Get in touch today to better understand how we can deploy our dedicated factory systems to complement your investment in ERP.
You might also find these posts useful:
- 6 essential KPIs for world-class factory performance
- Six root causes of poor labour productivity
- Five must-have features for your next shop floor data collection system
- How to turn small batch manufacturing from problem to opportunity
- Five reasons why your manufacturing KPIs fail
- Essential features for Advanced Planning and Scheduling (APS)