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Using ERP To Solve Manufacturing Inefficiencies

How To Improve Manufacturing Efficiencies Using ERP

www.TekoaERP.com

By: Nathan Hickman

As I’m sure most people know there are many companies out there that do not have the most efficient ways of producing a product. This inefficiency is normally transferred to the customer in the way of higher prices of goods. The normal consumer wants to see these prices go down and in order to do this, managers need to review their company’s production processes and figure out how to solve the problem.

Here are some tips that managers can use to improve their efficiency.

Engage With Production

The manager should get out of their office upstairs and actually visit the floor so that they can be involved in the manufacturing process and learn the steps that actually go into producing the product they are in charge of. This step would give managers valuable knowledge that they can use to locate problems and solve the problems. It also helps them in other ways too. It could improve employee morale because the lower level employees will be able to see that their manager isn’t afraid to get his/her hands dirty and can actually function as a normal person.

Another way to engage with production is to intentionally track production costs and have that information flow directly into the ERP manufacturing software.  The accurate collection of manufacturing costs provides the information needed to evaluate and benchmark production efficiency.  ERP software applications are skilled at collecting this information and a helpful tool for analyzing efficiency, so consider new ways to engage the ERP with actual production to record costs.

Identify Bottlenecks

The manager needs to locate bottlenecks that are slowing up the production of goods. A bottleneck is something that slows down the production, much like the bottleneck of a bottle slows down the flow of liquid. If the manager can identify and resolve the bottleneck problem it would greatly improve the efficiency in the workplace.

A common inefficiency in ERP manufacturing software include manual recording, or no recording of production steps.  The use of paper and pencil to track production is not only time consuming but frequently inaccurate.  Employing handhelds, or tablets to record production steps is one way to increase the efficiency and accuracy of ERP manufacturing data. 

If It Is Broke, Fix It

The third thing that a manager can do is not be afraid to make changes in the process if he/she sees that something is not working to the greatest capacity. Managers might be afraid to change the process because they have been doing it the same way since the start of the company. But the world is changing. Better technologies have been introduced and more efficient ways of doing things are out there. Managers need to be able to take risks in order to lower the cost of goods and to make the production of certain goods faster.

It is possible that production has been moving along in the organization in the same way it has been done for generations.  To gain competitive advantage and take operations to new levels, consider making changes, even if they are unpopular.  Making real changes to the collection and analysis of ERP manufacturing data so as to better understand how to make effective change is an important step to real change that makes a difference.

The problems with the production process could easily be resolved if managers would just consider the steps above. If they did that it would make the company’s stockholders happier and it would also relieve customers of unnecessary costs which is something that every customer would be grateful for.

Mr. Hickman is a business and technology analyst at Whitworth University

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