Editor’s Note: Today we are featuring this guest post from Find Accounting Software as it covers a subject we are also interested in, Manufacturing Technology which makes businesses more efficient. As a 3PL who offers a transportation management system we’ve integrated to many ERP software, we view the use of technology as an enablement tool for shippers to cut out unneeded waste and thus add more to the bottom line by saving money from such efficiency. To learn more about our integration, head over to our Developer’s Portal.
There’s one voice that’s often conspicuously absent from the online ERP software conversation: the one belonging to actual users.
It’s easy to find information from developers, integrators, consultants, and the tech media. But to find out what real users are saying about the tangible benefits they’ve seen from their ERP investment? That’s tougher.
The relative lack of published information from ERP software users is a bit unfortunate. After all, actual users are best-positioned to provide an unbiased report on how ERP features can be harnessed for real-world competitive advantages.
To better understand how your organization can benefit, we’ve collected comments from 20 manufacturers detailing the results they were able to achieve via their investments in ERP software.
1. Earlier identification of product manufacturing issues
Being able to link from product specification to quality assurance records & product history, provides us with better visibility of potential product issues, allowing us to take corrective action at an earlier stage of the manufacturing process. The system frees the designers to focus on creative and technical product development and helps us to take a product seamlessly from style conception through product commercialization.
2. Increased bid competitiveness through pricing accuracy
Running our pricing accurately was a huge problem… it is fairly easy now, and further use of reporting features will help with this. More accurate pricing means we can win bids against some of the largest food companies out there.
3. Lower inventory carrying costs
The new system is versatile, easy to use and required very little customization. It is providing many positive results. These include helping lower inventory carrying costsand making more information readily available through new reports and browsers; allowing more people to make accurate decisions to improve business operations.
4. Better handling of large transaction volumes
Once we had Infor M3 in place, we discovered a big increase in the transactional volumes we could handle. This was an important realization because it allowed us to grow organically without the need for additional resources.
5. One version of the truth
We’ve set the stage in terms of the future and where we want this company to be. For example, we’re looking at one set of numbers – one version of truth. We have a common terminology across the business and have issued our first set of company-wide cross-functional KPIs. We have visibility of total inventory across the organization, and for the first time, we have customer and product profitability analysis and reporting.
6. More accessible data
The information we get out of the system is much more powerful than we expected. We now have the ability to answer a question quickly, with more details. Data is easier to find and more accessible to senior management.
7. Improved business decision-making
It provides the flexibility to extract the data we need for better decision-making purposes. We can customize reports, flag items that need to be looked at and readily calculate re-order levels to maximize inventory levels.
8. Lower accounting bills due to fewer errors
The efficiency we’re experiencing is fantastic because time is money, but I’ll point out that we’ve also seen a hard-dollar savings. Because MAS 90 works so well, our CPA spends far less time fixing, changing, and tweaking errors. As a result, we’ve seen a significant drop-off in monthly billings from our outside accounting firm.
9. Standardized software across business divisions
The challenge for any organization is in turning technology into a tangible benefit. By making it repeatable, by reducing risk, by engaging with users, we’re partnering with the divisions at more of a business level. Instead of just talking about software, we’re talking to them about business processes… We’re eliminating redundancy and reinvesting those resources into more strategic efforts, into value-added tasks. We’ll have more people focused on the business rather than on managing system.
10. Added order capacity without added headcount
We doubled the capacity of our team without adding headcount. At this point in time, I believe we have even more room for growth. We estimate that once our customizations are all implemented, our team will be capable of processing three times the orders they do today. It’s been a great improvement.
11. Quicker month-end closings
We reduced the time needed for month-end closing by half, because it is much easier to access comprehensive information, get to the right level of detail for a given query, and rely on the integrity of the data. As the CFO, that also gives me more control over business events, which helps my peace of mind.
12. Ability to immediately update production schedules
If the president calls and asks us if we can change the line and make a particular product tomorrow, I can give him an answer while he’s still on the phone… I simply run the inquiry, which tells whether we have the items in stock and where they are located. If there’s an item with an open PO, I can see when it’s due in.
13. Improved supplier selection based on data-driven performance ratings
Supplier scorecards were once an administrative challenge. Now we can see in an instant the problem cases in a given month, based on the non-conformance report which flows directly to the scorecard. The system automatically deducts or adds points based on supplier performance. We track if our customer was impacted, automating the scorecard process to rate each supplier according to their latest performance data.
14. Time savings in inside sales, engineering, planning, and costing
One of the best payback items was in reducing the time that engineering had to spend in each order. We were able to utilize those engineering savings by investing in further new product development and value engineering programs. Overall, the configurator has helped us to advance against our competition… We are also strong in hunting for and eliminating waste in our operations, and this implementation helped us in that effort. We saved time in inside sales, product engineering, product planning, and costing.
15. Real-time receiving and order entry updates
When we receive a shipment, it’s seen throughout the system. Our purchasers can see when a part arrives in real time as opposed to having to wait until the next day like they used to. When we input new orders, we also see allocation to the parts necessary to build those orders right away, whereas before, we might have to wait as long as two weeks. And the reports that used to take me days now get done in 30 minutes.
16. Improved capacity planning
I’ll load the system up, and that gives me an opportunity to schedule my resources and my work force accordingly. It helps me adjust when I’ve got a work center overloaded to another work center and presents other options. The capacity planning screen is a good visual tool to help better planning and scheduling, and obviously meet the customer needs at the same time.
17. Cost savings from overall equipment effectiveness improvements
Prior to the installation our OEE was 77%. With the improvement in our uptime, this year-to-date we’ve achieved 87% OEE. With our improved OEE, we could theoretically generate, at full capacity, 608 hours of additional time per machine per year. For a product with an average run rate of $85 per hour, and the extra 608 hours per machine, we could see $52,000 in annual savings. If we could pick that up at all 14 machines, we’re then looking at $728,000 in annual savings. I think anyone would be interested in gaining these levels of annual savings.
18. Ability to demonstrate regulatory compliance
It helped us to maintain real time records of all the necessary documents with consistent procedures like SOP’s, change management, formulations etc. supported with an excellent quality control module to maintain high quality standards of our products. These documents along with quality control documents are very essential for audits by various provincial and federal authorities.
19. Improved customer service via access to deeper account details
Customer service has always been our top priority. We have enjoyed steady growth by providing service at a very personal level. This new package will give our service representatives quick access to a greater detail of a customer’s history. We will be able to help guide them to the products they need, when they need them.
20. Measurement of KPI’s
Previously we were running a number of different spreadsheets in line with our financial software, which made it virtually impossible to generate any substantial reports and measure KPIs across every area of the business…. We have been able to produce reports that have been invaluable in measuring our financial performance, job performance, quote accuracy, market performance and sales activity. This is saving us up to 40% of our time and has enabled us to make a cost saving of around £200,000 year-on-year.
1) Kathy Griffin, Robinson Manufacturing 2) Louis DeMent, Giovanni Food Company, Inc. 3) Bobby Yeomans, Facet Technologies 4) David Frank, Augusta Sportswear Group 5) David Frank, ACH Foods 6) Donna Sarsfield, Accounting Manager 7) Val Custer, Alpine Confections 8) Monique Roberts, Submar, Inc. 9) Brent Taylorson, DNTSPLY 10) Francisco Pardo, P’kolino 11) Don Simoneau, Rypos 12) David Pierce, Tom’s of Maine 13) Erin Clemente, Inteva 14) Jim Kolkeski, Alto-Shaam 15) Pierre Parks, Distek, Inc. 16) Paul Jira, ATD Precision 17) Steve Boeder, Vollrath 18) Richard Northcote, Madison Chemical Industries 19) Dani Nichols, NAPCO 20) Paul Smith, MetalTech
How are you using ERP software in your business? Let us know in the comments section below!