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Automation and Supply Chain Flexibility in Manufacturing

Automation and Supply Chain Flexibility in Manufacturing


Sep 05, 2017
Manufacturing and Distribution

Supply Chain Flexibility 

Today’s manufacturers are not only facing the very real challenges posed by cheap overseas competition and looming labor shortages, but pressures from customers, like demands for shorter lead times, smaller and more frequent orders, and reduced margins, to name a few. These pressures affect every area of a discrete manufacturing organization and, because so many operate in departmental silos, it’s nearly impossible  to streamline critical processes in a way that directly resolves these issues without the help of workflow automation software. 

Workflow automation is a foundational feature of an enterprise resource planning (ERP) solution, integrating all segments of the business and streamlining its processes, from sales all the way through fulfillment and delivery. Production, finance, HR, transportation, distribution, and others within the organization are connected and made transparent to one another, sharing information that leads to better insights and better decisions. 

Here’s a closer look at the ways workflow automation enables flexibility:

Improves Agility and Speeds Responsiveness 
When automation is operating behind the scenes to execute processes, change requests from customers don’t cause the kind of “organized chaos” that ensues when manual methods are used. Instead, each relevant area within the company is alerted to the change and necessary steps are taken automatically to address the customer’s needs, resulting in significant time and cost savings. Speed is of utmost importance to customers, and shaving time off the delivery schedule gives you a distinct advantage over competitors that don’t leverage automation. Many customers also request smaller, more frequent orders (so they can reduce inventory and deliver on their customers’ expectations), and an ERP system’s automation gives you visibility into raw materials, shipments, inventory levels, orders, and more, making these types of small orders easy to execute.

Improves Service/Turnaround Time 
Another way to distinguish your company from competitors is by offering shorter lead times; that’s not something most manufacturers are able to do, though, because the time it takes to make a finished product “is what it is.” But what if you could reduce the time it takes from order to delivery? With an ERP system in place, visibility into all aspects of production—raw materials, inventory, capacity, etc.—means you have the information you need to build to real-time orders, rather than taking bets based on forecasts and producing to meet those forecasts. Up-to-the-minute data about orders, inventory, and more also leads to drastic reductions in costly stock outs, overstocks, and obsolescence common when using manual systems.

Eases Labor Constraints 
One consequence of implementing workflow automation is, typically, efficiencies related to the workforce, not only in how processes are executed, but also in the resources it takes to produce products. Discrete manufacturers often find they can “do more with less,” or, in this case, fewer workers, reducing the stress put on them by a tightening labor market. This is especially important when you consider the push for shorter lead times; you can’t accomplish that if you don’t have the workers to do it.


Where Do You Start?

An ERP solution gives manufacturers a wealth of information, leading to actionable insights they can use to make sound decisions for the business. With visibility into orders, inventory, fulfillment, transportation, capacity, costs, supplies, and more, there’s no guesswork involved in managing toward profitable growth. But where do you start when most or all of your processes are currently manual?

Start simple by using an ERP system to automate some of the more basic supply chain processes. Even the most fundamental ones, like purchasing and finances, are open to costly errors when done manually and threaten the entire supply chain performance when done improperly. The best first step is to work with an experienced business consultant that can identify not only the most appropriate software product for the job, but where within your organization to begin automation. Wipfli has an impressive depth of experience in small and large manufacturing, and we’d be happy to apply what we know to your situation. Reach out to start a conversation about all the ways an ERP system and automation can ensure your organization’s profitable growth. 

 

Author(s)

Suzanne Koss
Suzanne Koss, CPIM
Partner
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