ERP Software Makes Manufacturing Data Work for You

Data can answer a lot of your questions. But it should be accurate and meaningful. Manufacturing data analytics helps identify the trends and potential opportunities in the production processes.

ERP Software Makes Manufacturing Data Work for You

Every manufacturing facility tends to gain a competitive advantage and for this, it needs information that equates to the original objective of data collection.

You cannot afford data analysis paralysis, but collecting data for decisive analysis is definitely not something that comes for free. Data collection may not pay back as you expect but could be a costly job to analyze.

Technology has made it quite easy. For instance, you can have a central hub of your business information provided by an integrated ERP system software across your organization.

It may cost you a bit, depending on the nature and type of enterprise resource planning solution you opt for. Well, the results will surely help you make well-informed decisions.

Focus on accurate manufacturing data analytics:

It means manufacturing data analytics should help increase your shop floor productivity, reduced overheads, and improved order fulfilments with timely delivery. And, this may not be possible with mere key performance indicators, or creating charts and graphs, or maintaining spreadsheets.

For this, you need all kinds of error-free, reliable, and useful data on the shop floor and assembly line. You may display printed charts on the boards throughout your shop floor. 

In a more advanced production environment, you can install monitors that continuously run live streams of real-time data feeds. For example, MIE Solutions – a leading provider of ERP for manufacturing industry has introduced a fully integrated kiosk module from the office to the shop floor.   

Data may have different meanings for shop floor workers. But regardless of what you are manufacturing and what’s the understanding of your labour about data, you must realize how valuable tool data is for increased production and profit margins.   

With a few simple questions, you can get an idea of whether the data collection and usability cost are higher compared to the benefits achieved.

  • Do you have a well-defined purpose of having real-time data presented on the shop floor and its analysis?
  • Do you have plans or processes in place to ensure data relevancy and accuracy, and to use data for making positive changes within the manufacturing plant?
  • Do you have any reliable technique for measuring any change (positive or negative) in the data?

For any of these questions, if your answer is ‘no’, then get yourself ready to face the odds of high-cost data collection than the advantages of using this data such as increased sales and improved production.  

What manufacturing data do you need to collect for effective analysis?

The rule of thumb for data collection and analysis is that you must be having specific goals to achieve the desired benefits. Remember, you will not find any standard data analytics plan or process that would fit all manufacturing companies.

However, for discrete manufacturers, the data collected around manufacturing costs, productivity, order fulfilment, and delivery dates are good starting points.

Let’s dive a little deeper into these points for a better understanding of making data work for your business growth and sustainability.  

Decreased manufacturing costs:

Well, not only production cost, but all overheads could be controlled when you have reliable data for correct analysis. Job costing and lowering company expenses is a tricky subject. But when you will manage to have increased efficiency it should lower the overall production cost.

For reduced job costing, at one end, you can calculate the material cost used in any production shop and add the labour cost to it. And, as you already have actual time measures for each operation at the shop floor, you can manage to lower the manufacturing cost through improved efficiency of both machines and labour engaged to a specific task on the job floor regardless of their utilization rate. 

Conversely, 100 per cent capacity usage of all resources (equipment and manpower) as a primary goal will make the cost of jobs a lot easier to master and manage. Despite this, one could argue that if a worker is doing his job in half the standard time spent on a job the cost applied to that specific job should be half the amount paid for that day working. It’s quite a challenging concept to consider.

Data in your hands will help you evaluate the accurate cost for used and unused utilization when factored into job costing, considering the production efficacy to each worker on the shop floor.   

Analyzing shop floor productivity:

You need to monitor and measure the productivity of your shop floor through consistently collected data. You must define the methods to measure productivity. For instance, you can calculate it by considering the number of finished goods you produce in a given period of time. This type of information can be best collected using modern ERP software that usually comes with a barcode labour collection component. With this capability, you can easily track the starting and finishing points of the shop floor operations and ask for completion quantities of finished goods.

The production data is not only about knowing how much you are producing in a specific amount of time. For deeper analysis, you can measure production efficiency and capacity usage of both tangible and intangible resources. You can have a wealth of information based on these two metrics.  

Efficiency is the measurement of the amount of actual work done in a specific period of time compared to the expected work done in that timeframe. It can be measured with reference to a worker, team, machine or a combination of any of these. If you fail in achieving 100 per cent efficiency, it means the actual cost of a job is higher compared to the estimated cost.

Utilization is simply the capacity usage and usually has no connection with efficiency. Indirectly, this factor can help you determine and control job costing.     

An ERP solution provides a 360 visibility on utilization and efficiency data that will help you improve both to increase productivity and decrease manufacturing cost.

Improved delivery scheduling:

It’s important to schedule your production and for this, you can get help from efficiency and utilization data. A properly designed schedule of work order completion will allow you to make realistic commitments to your clients about delivery dates. The data you get through a manufacturing ERP will help you improve the order fulfilment and shipment schedule.

With a predefined calendar, you can come up with accurate time estimates for order delivery. You can use production efficiency data to make your delivery dates more accurate. If you ignore data, you cannot make better delivery promises or spend money on collecting manufacturing data that will bring your business no value.

With accurate, meaningful data you can make more well-informed decisions without getting trapped into ‘what if’ scenarios. You can improve your order shipment dates with proper data collection and analysis.  

Bottom Line | ERP Software Makes Manufacturing Data Work for You

With all this manufacturing data and its proper analysis, you can ensure improved operations at all levels. Discrete manufacturers can use different data points for increased productivity, but efficiency and utilization are the best to start with and meet specific business goals – above of all improved processes and increased profits.