ERP Systems In Automating Material Transactions On The Shop Floor

If anything in manufacturing is certain, it is that the greater the materials handling the less efficient the system will be all the way down the production line. Indeed, materials acquisition and issuance has become something of a science since the introduction of lean principles into manufacturing over thirty years ago. The idea of lean in materials management is tied to the notion of estimating the material quantities that will be needed at any moment in the manufacturing operation. Prior to the automation of the shop floor, materials management (as a function of inventory management) was both a labor-intensive and often-inaccurate process as estimates for material were usually based on out-dated data. Today, however, enterprise resource planning (ERP) software systems take the manual process out of the production loop and through the use of real-time data, achieve the automation of materials management.

In essence, the function of materials management boils down to two divergent concepts—buying for inventory versus buying straight to the job. As the less efficient concept, buying for inventory means the “storing” of material (raw and/or components) for future use in production, whether or not that production may be presently pending or unknown into the future. In terms of material clerk efforts, buying to inventory requires a great deal of material handling in terms of turnaround, cycle counting, and issuance. On the other hand, buying straight to the job means less handling of production material within the shop. In a best case scenario, material enters the shop through the loading dock, travels directly to the work center where it is used immediately in manufacturing, and then shipped out just as quickly as finished goods; in other words, material moves straight through the factory. We often see such efficiencies in lean-cell manufacturing operations.

The estimating of material quantity in such a best case scenario is based upon the router (or traveler), which is in itself a quantity dependent document. That is to say, as the quantity of material needed is known in advance, the work order is also quantified, In turn, this makes it easy to know what to buy and what to move from inventory to the job as quickly as possible. Furthermore, ERP software will manage backflushing, whereby material is issued automatically when production is posted against an operation. In short, an ERP backflushing program will make use of the known quantity of jobs completed to calculate through the bill of material the quantities of the components used, and then reduce on-hand balances by this amount. Some ERP systems will even allow the input of quantity to issue material or backflush as initial job steps are completed. Such an option can have a great effect on the reporting of production scrap.

In the end, automating materials transactions on the shop floor through robust ERP systems raises efficiencies in the general materials management functions of inventory clerks. To this end, ERP software achieves the desired goal of the minimization of both material issuance and overall transactions.

http://www.globalshopsolutions.com/erp-software/erp-materials-management.asp

Dusty Alexander is the President of Global Shop Solutions. Global Shop Solutions is the largest privately held ERP software company in the United States.

Copyright 2007 - Global Shop Solutions. All Rights Reserved Worldwide. Reprint Rights: You may reprint this article as long as you leave all of the links active, do not edit the article in any way, and give the author name credit.

Article Source: http://EzineArticles.com/?expert=Dusty_Alexander

By Dusty Alexander

ERP Systems - Finding the Right Fit For You

It's hot outside on a nice summer day along an oceanfront boardwalk, and you want some ice cream. Before you are two shops-on the left a convenience store stocked with very inexpensive, packaged ice cream confections, and on the right one of those pricey marble-slab places that practically makes the ice cream from scratch in a flurried and extravagant public production of custom "ice cream building". Seemingly, your choices are quite limited to either the one-flavor-fits-all blandness of cheap prepackaged ice cream products that fall short of your taste needs, and the other that, while bells-and-whistles impressive, is more cost than your budget allows and far too much product than you can possibly ever consume.

Then, you spot just a little bit farther down what is, do doubt, your solution to this conundrum of ice cream extremes. It is a traditional shoppe-you know, the one with 31 flavors all lined up neatly in round five gallon barrels in the cooler, where the clerk will scoop them by hand according to your order. Sure, the ice cream is already there and packaged, but it is the idea and economy of flavor customization at a prepackaged cost that is most appealing to you. Here, you can choose from the flavors that best fit your taste needs. Still more, you can even select the platform for your various taste modules--be it cone or dish-and as much or as little will satisfy your desire. Product flexibility means that if one scoop or flavor is not enough you can always go back and ask for more.

When looking for the right ERP solution for a small to medium sized company, the various considerations you must take into account are much like those of looking for the right ice cream. Your needs, budget, and the flexibility of the product are major factors in finding the ERP software that proves to be a best fit. To this end, when shopping for an ERP solution you should ask yourself a couple of questions.

First, are you truly serious about dedicating the time and effort it takes to fully implement ERP software? That is to say, has your company made a firm decision that it's willing to change the way it does business in order to take full advantage of ERP software? It is a fact that without a complete buy-in of personnel, no ERP solution can reach its maximum potential in providing efficiency through operations-wide continuous improvement. Many ERP applications fail simply due to intra-organizational politics in the form of resistance to change. One way to overcome resistance on the shop floor and to facilitate positive employee participation, is to position the ERP implementation as a functional enhancement of your existing competitive advantages.

Second, how much change do you expect in your operation as you grow in time? In choosing the right ERP software solution, you must take into account the need for change within the system. Completely custom ERP/MRP software builds are often inflexible behemoths where the module changes necessary to accommodate emerging ERP needs are costly and time consuming undertakings. In other words, the more customized your software is initially, the more difficult it will be to mold it to your business evolution later. Ensure that when you do choose an ERP software solution it is one that will grow along with you-that changes to your "package" can be made quickly and for minimal cost.

Of course, these are but two of the many factors to consider when choosing the right ERP solution for your company. Others might include service reputation, depth of R&D, consistent version updating, and other variables. Still, understanding the importance of implementation roll-out as a notion of change and software flexibility of a function of growth are two major approaches to employ in your search. ERP software purchase success will come in having an awareness of what type of growth your company can expect and where those growth areas will be, as well as knowing how to best develop a complete employee buy-in to the change. When these factors are taken into consideration, the maximum ROI of ERP investment is achieved.

http://globalshopsolutions.com/

Dusty Alexander is the President of Global Shop Solutions. Global Shop Solutions is the largest privately held ERP software company in the United States.

Copyright 2007 - Global Shop Solutions. All Rights Reserved Worldwide. Reprint Rights: You may reprint this article as long as you leave all of the links active, do not edit the article in any way, and give the author name credit.

Article Source: http://EzineArticles.com/?expert=Dusty_Alexander

By Dusty Alexander

ERP Systems - Finding the Right Fit For You

It's hot outside on a nice summer day along an oceanfront boardwalk, and you want some ice cream. Before you are two shops-on the left a convenience store stocked with very inexpensive, packaged ice cream confections, and on the right one of those pricey marble-slab places that practically makes the ice cream from scratch in a flurried and extravagant public production of custom "ice cream building". Seemingly, your choices are quite limited to either the one-flavor-fits-all blandness of cheap prepackaged ice cream products that fall short of your taste needs, and the other that, while bells-and-whistles impressive, is more cost than your budget allows and far too much product than you can possibly ever consume.

Then, you spot just a little bit farther down what is, do doubt, your solution to this conundrum of ice cream extremes. It is a traditional shoppe-you know, the one with 31 flavors all lined up neatly in round five gallon barrels in the cooler, where the clerk will scoop them by hand according to your order. Sure, the ice cream is already there and packaged, but it is the idea and economy of flavor customization at a prepackaged cost that is most appealing to you. Here, you can choose from the flavors that best fit your taste needs. Still more, you can even select the platform for your various taste modules--be it cone or dish-and as much or as little will satisfy your desire. Product flexibility means that if one scoop or flavor is not enough you can always go back and ask for more.

When looking for the right ERP solution for a small to medium sized company, the various considerations you must take into account are much like those of looking for the right ice cream. Your needs, budget, and the flexibility of the product are major factors in finding the ERP software that proves to be a best fit. To this end, when shopping for an ERP solution you should ask yourself a couple of questions.

First, are you truly serious about dedicating the time and effort it takes to fully implement ERP software? That is to say, has your company made a firm decision that it's willing to change the way it does business in order to take full advantage of ERP software? It is a fact that without a complete buy-in of personnel, no ERP solution can reach its maximum potential in providing efficiency through operations-wide continuous improvement. Many ERP applications fail simply due to intra-organizational politics in the form of resistance to change. One way to overcome resistance on the shop floor and to facilitate positive employee participation, is to position the ERP implementation as a functional enhancement of your existing competitive advantages.

Second, how much change do you expect in your operation as you grow in time? In choosing the right ERP software solution, you must take into account the need for change within the system. Completely custom ERP/MRP software builds are often inflexible behemoths where the module changes necessary to accommodate emerging ERP needs are costly and time consuming undertakings. In other words, the more customized your software is initially, the more difficult it will be to mold it to your business evolution later. Ensure that when you do choose an ERP software solution it is one that will grow along with you-that changes to your "package" can be made quickly and for minimal cost.

Of course, these are but two of the many factors to consider when choosing the right ERP solution for your company. Others might include service reputation, depth of R&D, consistent version updating, and other variables. Still, understanding the importance of implementation roll-out as a notion of change and software flexibility of a function of growth are two major approaches to employ in your search. ERP software purchase success will come in having an awareness of what type of growth your company can expect and where those growth areas will be, as well as knowing how to best develop a complete employee buy-in to the change. When these factors are taken into consideration, the maximum ROI of ERP investment is achieved.

http://globalshopsolutions.com/

Dusty Alexander is the President of Global Shop Solutions. Global Shop Solutions is the largest privately held ERP software company in the United States.

Copyright 2007 - Global Shop Solutions. All Rights Reserved Worldwide. Reprint Rights: You may reprint this article as long as you leave all of the links active, do not edit the article in any way, and give the author name credit.

Article Source: http://EzineArticles.com/?expert=Dusty_Alexander

By Dusty Alexander