As part of the ERP selection journey, special attention needs to be focused when a company is in the mixed-mode manufacturing sector.
Ultra Consultants, in collaboration with Epicor’s Manufacturing Group, recently hosted a webinar entitled Lean Out Processes in Mixed-Mode Manufacturing to highlight the best lean practices for mixed-mode operations from the quote to cash cycle. We know that gaining operational efficiency and driving costs out of the organization is a consistent goal for most mixed-mode manufacturing enterprises, but they are not always easy to achieve. Best practices driving lean improvements include leveraging modern technologies to bring about business process transformation and reduction of waste.
Mixed-Mode Manufacturing Defined
Mixed-mode manufacturing combines elements of both process manufacturing (production of a good that once assembled cannot be disassembled – think of food manufacturers) and discrete manufacturing (production of goods with parts that may be disassembled/sold separately – like car manufacturing). Mixed-mode manufacturing might mean producing batches of a formula from a recipe and then including those batches as a subassembly within a discretely tracked finished product.
For our purposes, we’re looking at lean methodology which eliminates waste in the process areas of:
- Quote to cash with eCommerce
- Procure to pay
- Plan to produce
- Record to report
If these areas rely upon paper or Excel-based processes, they are ripe targets for lean improvements with the help of ERP services. For each area, we’ll look at the steps involved to identify where an ERP will bring business process transformation and operational improvements.
Read more about lean processes in Lean, Six Sigma and ERP: Putting it All Together for Improved Performance.
Best Practice: Quote to Cash with eCommerce
How are your customers using eCommerce? Customers in manufacturing and B2B distribution may prefer to place orders on the phone or edit an eCommerce order rather than rely solely on online ordering. Lean best practices include automated pricing to meet customer needs, e.g., a waterfall from product category and customer group down to specific SKUs and customers. Similarly, if the pick/pack/ship process involves printing out paper vs. using technology, like barcode scanning or pick to voice, then wasted time and resources abound.
Read more about eCommerce in Ultra’s white paper ECommerce Meets ERP: A Look at Integrating ERP, eCommerce.
Best Practice: Procure to Pay
Procure to pay is the entire process from the moment you source a product to the moment it is received and you pay the supplier. Adding lean technology relates to, among many others, have a sourcing database in a system outside of Excel, a vendor portal, and an S&OP process where your executive team discusses the forecast, and the resulting inventory plan is automated. Quality questions also require investigation: How is quality maintained? How do product inspections occur? While the financial aspects are often automated, are they integrated with shop floor technology?
Best Practice: Plan to Produce
Plan to produce is one area where we typically still see a lot of paper, often due to a reluctance to take on training efforts. Product tracing by hand, from raw material to component to finished good, with quality checks built in, results in too many opportunities for errors and too many resources spent entering shop floor data into manual systems. Integrating the shop floor equipment with automated systems which report production and downtime via MES to ERP leverages lean operations with associated savings in resources.
Best Practice: Record to Report (Finance)
As ERP selection consultants, we’ve seen that this is one area that is often overlooked but carries importance all the same. If it takes the enterprise longer than two days to close books at the end of the month, or if journal entries are manual, operations are hindered and could be transformed. Forecasting and decision-making with an accurate look at cash availability and needs is hampered and delayed with siloed Excel data.
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