Throughout the year, you plan, sell, submit orders, acquire parts and supplies, schedule jobs, continue manufacturing product and ship it to your customers. You report on all of these activities, and you look for areas in which you can improve your processes to lower your costs and increase your profits.
In short, you execute. You do all of these things all of the time. Any improvements you might make have to be done on the fly. You sift through reams of data and information and look for ways to increase your efficiency. But, since you are working with a moving target, it is tough to isolate cause and effect. It is nearly impossible to measure processes that you may or may not fully understand since they are constantly in motion.
At the end of the year, you look at your results, and here and there you find winners and losers. This plant loses money, this one turns a profit. This product line is a cash cow and this one is bleeding like a butchered cow. Do you really know why things are as they are?
How do you know what makes money and what loses money? In the world of advanced manufacturing, this is aided greatly by looking at everything through the lens of the individual customer experience.
Advanced manufacturing facilitates this by applying a project view to each job or customer transaction. This means that all of the data accumulated about a customer or a product that’s engineered, modified or configured in conjunction with an order would be tracked individually through the production process.
Expenses that are specific to the product will be tracked and reported, and overhead expenses will be intelligently allocated against each individual project. At the end of the year, rather than having a giant, rolled-up revenue number and a giant expense number offsetting it, the company will have a scorecard that shows exactly which projects made money and which ones lost money.
This is essential in determining what features might be built into future versions of a given product and which ones will be relegated as turkeys down the line. It also will facilitate the process of efficiently handling specials, being more responsive to customers and managing the business in a lean fashion.
Better execution starts with better data and better information about what you are making and how you make it.
Kicking off production with a project-pegged order is the first step in the process. The order triggers all of the scheduling and purchasing events. Needed supplies and parts are acquired, inventory levels are reported and production is initiated. Quality-control measures are affected and the produced product is delivered per the customer’s requirements.
Any product defects, field returns or other problems are documented and addressed.
At the end of the year, a transaction can be examined on multiple levels. Execution can be evaluated in terms of financial performance, operational efficiency, product quality and customer satisfaction.
Management of individual processes and of the enterprise as a whole benefits from real data pegged to each transaction and to the production process itself.
The “Roadmap to Advanced Manufacturing” is a series offered by Cincom Systems in support of its advanced manufacturing product suite.