Manufacturing Problem #4: Disconnected Systems & Departments 

Top Ten Problems Solved by SAP Business One in Manufacturing.
Problem #4: Disconnected Systems & Departments

This is the fourth in our series of blogs exploring ten of the most common challenges facing manufacturers, and how SAP Business One helps address them. In the previous post, we looked at problems arising from lack of real-time visibility. In this post, we examine the problems resulting from disconnected systems in manufacturing.

Opportunity Cost

Disconnected systems can be a symptom of disconnected departments. As your business grows, your operations may fragment, each department developing independent solutions to problems they face. Alternatively, disconnected systems may be a symptom of short termism. You know you need to change but you don’t have the time or money to invest just yet.

Whatever the reason, it’s costing you money and it’s an opportunity missed. Take a look at the following examples. 

1. Inventory Management

Inventory ensures we have components or ingredients to make our products. It may also be our stock of finished goods. We keep inventory so we don’t run out, incur unexpected and costly interruptions to production, or degrade customer experience. But inventory is expensive. It is money sat on the shelf. The longer it is there, the more costly it becomes. Inventory has an opportunity cost.

Ensuring that we have the right level of inventory is complex. It requires forecasting, purchasing, management of staff, and warehouse planning. Too often these tasks are supported by disconnected and manual systems. Forecasts may be held in spreadsheets. Purchasing is a combination of emails, order forms, and yet more spreadsheets. Stock is tracked in a bespoke database. The result?

• Materials appear “in stock” in one system but are actually allocated or missing
• Purchasers reorder items that are already available, increasing carrying costs
• Production gets delayed because a small but critical component is missing

2. Quality Inspection

Quality inspections are obviously important but integrating them into production schedules is a challenge. Record keeping is time consuming and manual, and inspections may get missed in favour of expediency. And the result?

• Costly defects are discovered later than they should be
• Root cause analysis becomes slow and is driven by guesswork
• Poor visibility and compliance

3. Machine Maintenance

If machine maintenance is not fully integrated into production scheduling, machines go offline unexpectedly, essential maintenance may get postponed because it interferes with production. Maintenance needs to be a visible part of production planning. If not, repair costs rise, production is delayed due to faults, and machine costs rise due to increased wear and tear.

How SAP Business One can help

SAP Business One is ERP for small to mid-size business. That means it is an integrated solution. Using the examples above, here are three ways it can help your business.

1. Integrated Inventory Management and MRP

Material Requirements Planning in SAP Business One automates the purchasing of components and finished goods. It draws on powerful analytic capabilities to improve the accuracy of forecasts. With MRP you can more closely align stock and purchasing to your needs, taking into account factors such as lead times and economic order quantities.

2. Integrated Quality Inspection and Production Planning

SAP Business One integrates quality assurance into production scheduling. It improves the visibility of inspection plans and ensures that process is always followed. SAP automates the release of inspection and sample plans. Inspection plans can include whatever you need them to – temperature checks, quota samples, visual inspection, expiry dates, and so on.

Managers can define inspection plans, track and release inspection orders. Inspectors, using handheld devices, execute inspections and collect quality data. With SAP Business One, everyone has a clear, paperless overview of their work with shop floor data collection.

3. Integrated Maintenance and Production Scheduling

Schedule complex jobs easily, gain visibility and improve your delivery time commitments while maximising throughput. Avoid surprises and streamline your operations.

• Interactive visual production scheduler in the form of a production schedule and resource Gantt chart
• Easy-to-use drag and drop scheduling of production orders, production order lines, production order routing lines and capacities
• Real-time visualisation of resource utilisation and impending overloads thus improving your capacity utilisation

Take the next step 

In the next blog in this series, we focus on quality control issues. 

To find out how SAP Business One from LAKE could help your business, download a copy of our  SAP Business One Beginners Guide – Manufacturing or take a virtual tour.