Monthly Archives: January 2013

4 Keys to Achieving Your Return On Investment

Improvement projects, such as paperless manufacturing, are necessary for growth and send a clear message of success. What message is your company sending?

By Kristin McLane, President of CIMx Software

A church I pass daily has an LCD display along the highway’s edge. This week, it read, “We are debt free!”

Why advertise the lack of debt?  They are in the business of saving souls and changing lives, not financial planning.  The truth is, you can tell a lot about the strength and foresight of an organization by how it handles debt.

What is your strategy for building a successful team?

What messages are you sending about your business?

An organization uses debt to support growth. In the case of that church, it was a new assembly hall for a growing member base. An organization averse to taking on risk is afraid to grow.  But debt and risk must be managed.  It’s important to measure the amount of risk against the projected growth and expected return.  Organizations need to find a balance between risk and return. How much money will support the measurable return?

Our customers implement electronic systems for a number of reasons.  Each business must address how much money will support the measurable return.  Most businesses do this by calculating how long it will take to achieve an ROI (Return On Investment).

Unfortunately, many businesses miss the mark, when planning a project and calculating ROI, with easily avoided mistakes, such as:

  • Lost time.

Businesses that spend months, even years, researching before purchasing a system are wasting potential ROI before the project has really started. Your time investment must be factored into the cost.  The key to achieving ROI is a rapid return.  We target no more than 9 months for ROI, allowing customers to quickly justify the investment.

  • Functionality inflation.

Many businesses begin researching software with a specific challenge to be solved. During the process, the functionality list inevitably grows.  An ROI will be calculated with one set of functionality, and additional “nice to have” functionality requirements may make achieving the ROI almost impossible.

  • Unnecessary complexity.

Many software companies offer “modules” of software that must be integrated, or an off-the-shelf system that doesn’t integrate with current production processes. A product that adds complexity will be resisted on the shop floor when the old system is more comforting and easier to use.

  • Poor implementation.

When calculating ROI, look at how long it will take to implement the new software.  Get an accurate estimate and find a software vendor you can trust.  A project that takes several years to implement, or that never really integrates with existing systems, adds to the Total Cost of Ownership (TCO) and inhibits the ROI.

Building the right team can be the difference between success and failure.

The key to achieving ROI with an improvement project starts with focused planning. Photo: www.colourbox.com.

Think back to the church, and what was required of the building committee to make the claim, “we are debt free.”  They needed an accurate estimate of donations.  They needed a timely procurement process, a project focused on meeting church and growth needs that people would use (and not ignore), and a builder who could complete the project on time and on budget.  Failing to meet any of those requirements would have a significant impact on the ROI, and make the goal of “debt free” difficult.

A successful improvement project starts in the planning and research phase. An improvement process is a sign of growth, and sends a clear message (like an LCD sign on the side of the highway) that your business is a success.  Success doesn’t have to be difficult to achieve. Contact us today to learn more, we’re happy to help!

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6 Hidden (or not-so hidden) Benefits of Paperless Manufacturing

Many Manufacturers turn to paperless manufacturing to solve a specific shop floor challenge, only to be surprised by a host of other production benefits.

The other day I visited my grandma. We decided to order pizza for dinner. “Go find the number in the phone book,” she told me.  You remember phone books – massive bound documents with thin yellow paper and ink that left fingers black with every touch. She couldn’t remember the number and insisted I use the phone book. I spent 15 minutes searching for the number she wanted before finding it under Restaurant – Italian.  The number wasn’t even in service. I was so frustrated, I ended up driving out to get the pizza just to get away.

How many of us have a shop floor document management system similar to a phone book? How many of us search a document for a piece of data, only to find it’s out of date? Ever think about the amount of data lost or misreported in paper-based systems? Do you dread audits? How long does it take to get accurate information from the shop floor?

Learn more about Paperless Manufacturing and what it can do for your shop floor.

Learn more about Paperless Manufacturing and what it can do for your shop floor. Photo: www.colourbox.com.

Yeah, life on a paper-based shop floor reminds me of life with phone books. Finding a phone number online is much easier than searching through a phone book. Verifying a phone number takes seconds, and I’m much more confident in the data I find. The amount of data that can be stored and found online is simply astounding compared to the tiny text you comb through in a phone book.

So, if we can make phone books paperless, why are we insisting on a paper-based shop floor?  The good news is there are more benefits to going paperless than just taking piles and piles of paper off the shop floor, including:

Revision control helps ensure the shop floor is using only the latest, most accurate plans. With the right system, the shop floor has access to only the correct plans.

Accurate records are easy to keep. The system will automatically update the records as needed. Workflow events can be created to collect data in real time. It’s a seamless part of the work procedure.

Simplified audits are the norm when you have accurate record keeping  You can be confident in the results before you go into an audit, and have easy access to necessary information.  Would a two hour audit with full compliance save you time and money?  Think of the waste you accumulate with audits that take weeks to complete.

Shop floor visibility means you have real time access to data, and aren’t forced to make business or production decisions based on outdated information.

Faster change management gives you assurance that when change happens, it reaches the right people at the right time.  Engineering changes that are available to all who need to know 5 minutes after approval saves rework and scrap.

Document control easily manages the documents needed in production. An effective paperless manufacturing system automatically collects data and archives it, making it easier to find in the future.

Companies usually seek a solution to a single problem, but the best solutions will not only solve that problem, but offer other benefits.  Solving shop floor document management (getting rid of those giant, phonebook-like production plans) offers additional benefits because it is a symptom of a larger problem – information mismanagement. Paperless manufacturing moves from document management to information management and control, delivering additional benefits such as increased efficiency and profitability.

As for the phone book, you still see them around, and we all feel better having one on hand in case we need it.  But, like shops that are still clinging to paper, we can’t help but wonder why those people flipping pages in a phone book are still clinging to relics of the past.

How Much ROI Is Slipping Through Your Fingers?

By Kristin McLane, President of CIMx Software

CIMx Software’s President talks about the easy-to-fix mistakes many companies make as they consider shop floor improvements.

The lyrics of a recent chart-topping song compare life to an hourglass, glued to a table.  It’s true we have only so much time, one measure of sand and no more.

Delaying a decision or waiting on an improvement project may cost you more than you think.

Delaying a decision or waiting on an improvement project may cost you more than you think. Photo: www.colourbox.com.

Whether you are talking life’s biggest problems or the implementation of shop-floor improvements, you never know how much time you have until the next crisis event.  On the shop floor, it might be an audit or a customer return.  Perhaps you’re building scrap because engineering made a change that’s not reflected in the current travelers.  Crises are going to happen, and there is only so much time to correct them before you lose profit, customers, and ROI.

Think of the sand trickling through the hourglass as currency.  Money’s wasted on errors and delays as you struggle to decide what to do, or wait to do anything at all.

Most of the companies I talk to worry about running out of time before they make a decision, get funding and implement.  It’s a legitimate concern with real consequences.  Internal politics and fear delay projects and decisions.  Companies exhaust the cost and production savings before they’ve kicked the project off.  The sand doesn’t stop.

The key to successfully navigating the hourglass is recognizing the potential danger and preparing for it.  Ask vendors how they keep a project on schedule.  What techniques do they have to give projects momentum?  At CIMx, we have measures, from our sales process through implementation, and long-term support and upgrade, to ensure we’re good stewards of your time.  We have resources in house to help build a persuasive business case and ROI, and have designed our software to be implemented in less than 30 days.  Demand a realistic schedule of your vendor, and never leave a project open-ended.

Look at the structure of your company, and identify potential roadblocks early.  If a team is reluctant to take on a manufacturing software solution, get them involved early so they don’t delay the project later.  If funding will be a problem, find an advocate who can lobby for funding and deliver a PO when the time is right.

If you can’t get a larger hourglass, focus on spending less sand.

Six Manufacturing Trends for the New Year

How to make 2013 work for you.

The beginning of a New Year is always a good time to look ahead.  Newspapers, websites, and prognosticators print and publish endless lists of “Top Tips for the Upcoming Year” or “Hot Trends of 20XX,” and the hungry public eagerly eats them up looking for that one idea that will help them get ahead.

Make manufacturing trends work for you in the New Year.

Make manufacturing trends work for you in the New Year.  Photo: colourbox.com

More than just prurient interest, these lists and articles are a way of preparing us for the future.  Change is inevitable, and the future is coming.  We can either meet change head-on, or bury our head in the sand and be satisfied with the status quo.  Change adds risk, but is necessary for growth.  So let’s take a look at what the future holds, and what you can do to prepare for it.

 Manufacturing Growth Predicted

Most industry leaders and analysts are predicting moderate growth in 2013, with even more growth in 2014.  Moderate growth may not sound exciting, but after years of uncertainty and contraction, and the skittishness of analysts, predicting moderate growth is a very good sign of improving profit and new orders.

Capital Expenditures Up

Capital Expenditures are an excellent gauge of industry expectations.  When capital expenditures are down, it means businesses (and manufacturers) see risk and uncertainty in the future, and are unwilling to invest without a clear ROI or business need.  When capital expenditures are up, businesses see opportunity and profit in the future, and are investing with expected growth in mind.  Analysts estimate this year capital expenditures will grow 7.6% or more.  Supplier capital expenditures will exceed 7%.  These are positive signs, but they point to increasing competition.

American Manufacturing is in transition

There are a number of factors adding pressure to American Manufacturing, including a need for a skilled workforce and increased pressure from foreign markets.  Signs point to American Manufacturing and the economy enduring a period of transition.  American global competitiveness isn’t based on lower pricing, it will grow by improving quality and the GDP of the labor force.  To compete globally, the American worker needs to increase productivity and quality, which requires investment.

Importance of Quality

Set yourself up for success in 2013 with these tips.

Set yourself up for success in 2013 with these tips.  Photo: colourbox.com

In a recent survey, manufacturers cited the quality of parts and supplies as more important than price, customer service, or availability.  This is a clear change from previous surveys, when price and availability were of prime importance.  It also shows a change in the market, that the status quo of shop floor errors and mistakes are no longer acceptable.

CIMx Software is a technology company for manufacturing, so we’re taking a closer look at technology in the industry, and the role it will play in the coming year

Going Mobile

Last year, there was a strong push for mobile manufacturing.  Tablets and smart phones made their way to the shop floor as tools to improve communication and production.  That trend will continue this year, but manufacturers are looking for more than just an “app” to give them access to only data, they want full production control, and software fully integrated with the mobile platform.  If mobile manufacturing is a goal, look for manufacturing solutions that offer more than just an app.

New Solutions

In the past, Manufacturing Software solutions involved complex, custom-coded solutions available only to the largest companies, or they were simple with limited capabilities and little benefit.  There are new options starting to appear on the market with the goal of delivering MES benefits – paperless manufacturing.  One such product, soon to be available from CIMx Software, utilizes a readily available technology framework found on more than 90% of all shop floors to deliver low-cost, low-risk paperless manufacturing in less than 30 days.  Previously held views that technology is complex, risky, expensive, and takes years to install are no longer applicable in the modern market.

Change is inevitable, and all of us need to remember that even if we’re happy with the status quo, our competition may not be.  To stay competitive, you need to deliver process improvements, better customer service, and higher quality products faster with fewer errors.  A red flag for any shop floor would be starting the New Year without a goal or plan for improvement.

What are your plans for the New Year?  Do you have any goals in mind, or questions about what you read here?  If so, contact us using the comments below or email us at cimxsoftware@cimx.com.  We’ll answer as many emails as we can.  Any process improvement plan starts by gathering information and getting answers, and we’re happy to help.