Seeing Manufacturing in Real Time with ERP Software
Real-time visibility and automation technology for the supply chain are changing the way manufacturers do business. Read on to see what Manufacturing Engineering sees as just a few of the trends and drivers of productivity in manufacturing.
Manufacturing Engineering: How can ERP software help manufacturers improve productivity?
Dick Schultz: The basic role of ERP systems for most manufacturers is to align supply and demand for goods and communicate the activities associated with the processes throughout an organization. The real productivity improvements come from providing real-time visibility to and automating activities throughout a manufacturer. This may start with a quote becoming an order, manufacturing building the product for the order, shipping the order to the customer, and ultimately receiving payment and updating financial statements-all without ever re-entering information or printing a piece of paper.
ME: Gartner Group’s Magic Quadrant survey recently ranked Epicor’s ERP 10 among the industry’s ‘visionary’ solutions. What’s new in your software for manufacturers?
Schultz: With Epicor ERP, providing visionary technologies is a base foundation of our system’s lineage. With the resurgence of best-of-breed solutions, it is imperative that the ERP system has the openness required to allow manufacturers to adapt their systems to changes in their business. With the latest release of Epicor ERP, we expanded our technical capabilities with the delivery of expanded collaboration with Epicor Enterprise Social; choice in deployment from multitenant SaaS [Software-as-a-Service] to traditional on-premise; and options for delivery from Windows clients and Web browsers to tablets and smart phones. In addition to the delivery of our ERP technology foundation, our latest release of Epicor ERP is focused on expanding the global reach of our product and deepening the manufacturing functionality for our key industries.
ME: Cloud-based ERP systems have gotten popular; what are some key advantages of cloud-based solutions?
Craig Downing: In the early days of cloud deployment the conversation was centered around reduced TCO and the cost effectiveness of the cloud. We certainly shouldn’t under-represent the costs benefits of the cloud-because for most clients that remains a compelling value proposition. But when we speak with clients who have already made the leap to the cloud, the conversation is much broader, and tends to focus on more strategic topics than simply the cost savings.
The first of those is Collaboration. Because you’re deploying in the cloud, the system is every bit as accessible to everyone across the company and beyond that has an Internet connection. This means we can better bring people together to participate in critical business process-and shorten cycles that relied on asynchronous processes-like e-mailing files back and forth. With the cloud, it’s simple to have everyone across the organization participate, and it’s equally easy to bring external experts-contract designers, or even the end customer-into the loop. We’ve seen it make manufactures more agile and more adaptable.
The second is Mobility. Ten years ago we had desktop PCs in the office, and a kiosk PC on the shop floor-augmented by 1930s technology [colored paper and clipboards]. With the migration of ERP systems to the cloud, we’re enabling mobile users across the enterprise to maintain a real-time connection to the ERP system whenever they need to. Field sellers now have access from their mobile phones to the latest inventory availability, and service staff are now able to access warranty and replacement part information from a rugged tablet while out on a job site. But mobility within the four walls of the enterprise is equally compelling. We are seeing more and more tablets deployed out on the production shop floor-allowing manufacturing staff to stay productive and engaged-and not having to wander back to the ‘shop-floor kiosk’ every 20 minutes to log their time against different jobs, or look up their next task. The efficiency gains of mobile enablement and elimination of paper alone pays for the costs of these mobile devices as soon as they are turned on.
Resource Utilization is another key. Early conversations about the cloud included suggestions that ‘you don’t even need IT’-which of course isn’t true at all. Plowever, what we’ve found is that your IT teams are now able to work on much more strategic items. If you spend a day with IT departments, you’ll understand how much of their time is spent maintaining servers, installing security updates, managing backups, and ensuring that systems are replaced before they fail.
With cloud deployment, those tasks, and more, such as installing major feature updates, are taken off the shoulders of the IT department, and become the responsibility of the ERP vendor. This frees up the IT teams to work on much more strategic things that support the company’s mission. We see clients reporting that their IT teams are now able to deliver the management reports, dashboards, mobile applications, and other strategic projects they never had time for when they were ‘running from fire to fire.’
ME: How difficult is it to move a manufacturing operation’s ERP to the cloud?
Downing: Surprisingly easy. Indeed, most end users will never notice the migration from an on-premise deployment to a cloud deployment if it’s done properly. The technical migration and user experience have been optimized by the tens of thousands of companies who came ahead of you. To be fair, there are some key ERP processes that are obvious candidates for cloud deployment [order entry, reporting or forecasting], and some that are less urgent, or in some cases less appropriate, for cloud deployment.
Let’s explore, for example, Manufacturing Execution Systems [MES]. These technologies monitor the health of machines and other critical details about its day-to-day operation. Moving the centralized reporting component of those systems to the cloud is a reasonable plan so the VP of Operations can oversee all 30 factories’ operational readiness from his desk. However, it’s important to determine how much benefit you’d get from moving the monitoring component of those systems to the cloud. If a tool breaks, or a machine heats out of tolerance, or some other critical exception triggering event occurs, chances are that the alarm and notifying systems are based on summoning local technicians to intervene. In that instance, the benefit of deploying to the cloud is arguably less compelling for most companies. It’s important to remember that migrating to the cloud doesn’t have to be an ‘all-or-nothing’ proposition. Some systems just have a higher ROI on their cloud migration than others, and most companies want to start with those high ROI systems first.
ME: What’s the potential for improving ERP performance with in-memory computing technology like SAP’s HANA?
Downing: High-performance computing, of which in-memory computing is certainly a good example, has the potential to bring the next wave of operational efficiency to companies of every size. Many clients run their Manufacturing Resource Planning [MRP] processes on a nightly basis [some even less frequently] because of the lengthy run times for large manufacturers. But what if you could run the MRP, sales forecasting and procurement recommendations hourly or four times an hour? And what if the organization could use the output of one to be an input into the other? Or perpetually in real-time?
Depending on the scale of an operation, a business could become much more agile by quickly reallocating resources across its manufacturing and distribution workflows in response to consumer trends, meteorological forecasts that will impact logistics processes, or even shifts in consumer taste. The manufacturing graveyard is littered with companies who thought they were ‘responsive enough’ to consumer demands, but in today’s world, ‘fast’ just isn’t fast enough when dealing with consumer and environmental trends that impact demand cycles. In-memory systems also allow manufacturers tremendous ‘what-if modelling capabilities, which significantly increase the ability to continually challenge assumptions and sensitivity to input costs, demand forecasts, materials design changes and more.
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