Tag Archives: WIP

Process Improvement graph.

Use Your Data for Accurate Production Costs

For manufacturers, accurate estimates are critical to managing costs and margins. If estimates are based on guesswork: bids can be lost, delivery times missed or costs can spiral out of control. Too often, operators will pencil-whip work times on their way out the door rather than accurately tracking and recording their work. This skews the limited data available causing misinformed directives from the top.  When both the historical data and the analytics at the foundation of estimates are suspect, problems quietly grow costing the company money that has to be made up in additional production.

Turn Production Data into Profit

Accurate estimates require both clean historical data and production visibility, both of which are provided by the Quantum Production Control System (PCS). Let’s look at a few areas a PCS can enhance your estimates:

  • Accurate Labor and Production Data

Know who did what and for how long during production, and then turn that data into more precise estimates. The PCS automatically tracks labor and production through standard use of the system. This includes machine time and labor, so management can see how much time, effort, materials and parts are required to complete work. Over time, as accurate data is accumulated, the company can begin providing more accurate estimates and labor loading.

  • Identify and eliminate scrap

Scrap can turn profitable products into an expense for manufacturers, and yet many companies struggle to understand the cause. The production control system collects production data that reveals where and how scrap is generated. The PCS links the scrap to the work being done at the time it occurs. With this information, the manufacturer can either eliminate the root cause of scrap, or better estimate standard losses in production.

  • Focus on profitable work

Once you are tracking labor and production costs, leverage the data to identify and prioritize the most profitable work. Refine your gross manufacturing margin using production data to identify products and goods with a higher gross margin. With this information, you can make more profit on every sale and shipment. The company makes more and spends less.

Increasing Profit Velocity

Many companies look at a production control system to solve a specific problem such as a failed audit, late shipments, or poor visibility into Work in Progress (WIP). Even with the solution in place, the company finds more value in the critical data the system feeds to the sale and production cycle. With higher gross margins, accurate estimates, and control over scrap and production the company finds expenses go down and profits up.

If you’re ready to take control of production costs and enhance your profit on every product built, contact CIMx Software today to learn more about Quantum. Discover what a PCS can do for you.

Advertisements

When Is the Right Time to Install Paperless Manufacturing?

Too often, the benefits and ROI of shop floor improvement projects are lost as projects are delayed or postponed.  Learn how to maximize your benefit and discover the best time to install your system.

By David Oeters, Corporate Communications with CIMx Software

Don't wait to install.  Maximize the benefit from your shop floor system.   Photo by www.colourbox.com

Don’t wait to install. Maximize the benefit from your shop floor system. Photo by http://www.colourbox.com

Many manufacturers see the advantages of MES and paperless manufacturing, but struggle with the final decision to implement the system.  The process becomes a waiting game, where the implementation team knows something needs to be done, but they delay waiting for the “right” time or some confirmation or signal (a planetary or astrology alignment, perhaps?).  Sometimes it’s a budget or resource concern (when will IT have time to help, or when will Procurement be ready to release the purchase order), but other times, it’s indecision or doubt that the operation is really ready… or maybe it is some mysterious omen everyone is waiting for?

This sounds silly, but the truth is while you wait, shop floor problems continue.  Profit is lost, quality is sacrificed and production struggles during this period.

Overcoming Indecision

The truth is, there is no “right” time (other than now) to begin a paperless manufacturing or MES project, but there are a few simple questions that will help determine if your shop is ready:

  • How much are the challenges facing your shop floor costing you?

It’s important to determine your potential ROI before installing a shop floor solution.  This helps focus your system on your greatest challenges.  Once you have an ROI, it is a simple matter to see how much money a delay in the project is costing you.  Consider this, the solution may be an investment, but the delay is an expense with absolutely no return.

  • What benefit will your customers get from your shop floor solution?

Rolling out a new shop floor system, with features such as real-time WIP (Work In Progress) dashboard and ECO management is added value and benefit to your customers.  No other shop floor solution delivers as much benefit to production as MES or Paperless manufacturing.  Take the opportunity to reconnect with your customers and introduce them to the shop floor and production improvements you’ve made.  Often the additional benefit will be the “sign” you’re looking for to initiate the project.

  • Can you maximize your benefit by understanding your business cycle?

According to the concept of cyclical investment in a business from International Trend Research Group (ITR), the right time to invest is during the down cycle in your business in order to maximize your capacity as business picks up.   This may seem counter-intuitive, but investment during the down cycle ensures your shop floor is positioned to maximize production during a business boom.

  • Can you use a phased implementation during installation?

A phased implementation allows you to select the features and capabilities the project focuses on, minimizing shop floor disruption and maximizing the ROI.  If you have a system that allows a phased implementation, there is little reason (other than budgetary and IT support) to delay the project.  Determine where you can achieve the biggest benefit and dive in.  Roll out new features when you are ready.

The Next Step

In a perfect world, once a manufacturer has made the decision to upgrade their production to a Paperless manufacturing system, the hard work is finished and the implementation will be a breeze.  Unfortunately, we don’t live in a perfect world, but you can maximize your shop floor benefit by taking control of the implementation and working strategically to ensure a smooth transition from a paper-based to a paperless operation.

Want to know more, or learn how paperless manufacturing can benefit your shop floor?  Leave us a message or give us a call, we’re happy to help.