Thread Content
In today’s era, within a highly competitive global market, whether it is process-based or discrete manufacturing, whether it involves single-unit production, small-batch production of multiple varieties, repeated production of a few varieties, or mass production of standard products； Internal management in the manufacturing industry may encounter various problems: for example, a company might have excellent sales staff to promote its products, but the workers on the production lines are unable to deliver goods on time, while workshop managers complain that the procurement department does not supply them with the necessary raw materials in a timely manner ； In fact, the purchasing department is too efficient; some materials stored in the warehouse will not be used up even in 10 years, the warehouse space is saturated, and capital turnover is very slow ； Many companies take 6 to 13 weeks to calculate the amount of materials needed, so the ordering cycle can only be 6 to 13 weeks ； The dates on the order forms and purchase orders are different from those on the material shortage reports; none of them is accurate ； The finance department does not trust the data from the warehouse department and does not use it to calculate manufacturing costs. It is undeniable that the above situations are common in factories, and they can be categorized into five types. However, what effective solutions do we have to address these five issues? All of these can be resolved through ERP management software; if you don’t believe it, take a look: Phenomenon 1: Blind production – starting to work on products for which the materials have not arrived yet. However, as the delivery deadline approached, the materials still failed to arrive on time. By the time the delivery date came, it was impossible to deliver the products on schedule, leaving only air freight as an option, which in turn increased costs significantly. However, the warehouse was filled with products that had not yet reached their delivery date, and the warehouse staff suffered greatly trying to keep these goods in storage. This phenomenon is even more pronounced in shoe factories, where the buckles on their shoes become rusty and the leather gets moldy by the time the shoes are shipped, causing huge losses to the companies. The reason for this phenomenon is unplanned production. Phenomenon 2: Unclear responsibilities. Many corporate managers, seeing that the company’s performance does not improve, spend their days overseeing various departments, yet they are never able to determine which link is causing the problems. When discussing matters with clients, the executives could only sigh and say that the company’s processes are too chaotic to sort out. However, ERP can solve this problem, as it is interconnected and links together various departments; if one step is not carried out properly, the next step cannot proceed, which in turn reflects the sense of responsibility that employees in each department have towards their work. When the previous department stops functioning, it becomes easy for managers to identify problems in the next department. Take a simple example: the delivery date is approaching, yet the mass production has not yet started. What is the reason for this? Since the production instruction sheet (work order) has not reached the production department, no one dares to start production. Why hasn’t the production instruction sheet reached the production department? The reason is that the BOM hasn’t been released. Why hasn’t the BOM been released? The reason is that the complete set of cardboard for the technology transfer has not been released. Why hasn’t it been released for the technology transfer? Is it because the development prototype wasn’t produced? At this point, it is not difficult for managers to realize that there is a problem in the development process, and they can make the right decisions to address it and resolve it promptly. Phenomenon 3: Unclear inventory. Upon entering the warehouse and looking around, all that could be seen were piles of materials. When asked what kinds of materials were there, the warehouse staff did not know how to answer, as no one knew the exact quantity of materials stored there. This is because the names of materials in the factory vary; the production department uses the production order sheet to request these materials, but the warehouse finds that they are not available, so it asks procurement to purchase them. Yet there are still hundreds of yards of such materials in the warehouse! The occurrence of these phenomena leads to inventory buildup, as no one can accurately know the stock levels. Purchasing staff are unable to obtain accurate information about the warehouse in a timely manner, and thus cannot deduct the corresponding amounts from the inventory promptly. However, ERP can solve this problem. ERP requires monthly closing to be carried out on a regular basis; once the closing is completed, the system clearly shows each department how much inventory of various materials there was last month, how much was purchased or sold this month, and how much is left. All these figures are displayed for everyone to see. Phenomenon 4: Procurement data is difficult to manage. The purchasing manager has to enter the data of each purchaser into Excel every month to facilitate statistics. This typing work is quite time-consuming; sometimes it’s necessary to work late into the night to input all the data into Excel, and there is also the concern of the computer getting infected with viruses. However, ERP can solve this problem. It collects data on each operator in a timely manner; by the end of the month, it takes only 5 minutes to obtain various details, whether one wants to see a particular operator’s purchasing activity or the overall purchasing activity of an entire department. For example, to view Zhang San’s purchasing data, one simply needs to enter his name, and his purchasing records for one month or several months will appear on the screen immediately. ERP also solves the problem of data corruption, as it is based on B/S architecture; all data is stored on the server, and the database is automatically backed up on a monthly basis (at a time set by the user), thus eliminating the worry about data loss. Phenomenon 5: The process is not smooth, with too much arbitrariness in manual handling. However, ERP can solve these problems, as it connects various departments together in a cohesive manner, embedding the company’s business processes within ERP. Ultimately, when ERP is in operation, team members in various departments are forced to follow the established procedures, as if a previous step is not completed properly, the next step cannot proceed. This is why ERP is able to streamline factory processes. In short, ERP can bring substantial economic benefits. According to statistics from APICS (the American Inventory Control Society Inc., founded in 1957), the use of an MRPII/ERP system can reduce inventory levels by 30% to 50%, cut delivery delays by 80%, shorten procurement lead times by 50%, reduce downtime due to lack of materials by 60%, lower manufacturing costs by 12%, improve management efficiency, reduce the number of managers by 10%, and increase production capacity by 10% to 15%.