Around the world, market analysts are trying to create accurate forecasts for the global economy. Some are comparing the current situation with the “stagflation” seen in the 1970s when both unemployment and prices were high. Others say that direct comparisons aren’t possible due to the volatility of a world still enveloped in a pandemic. To say the least, it’s complicated.
Staying competitive in this uncertain environment demands speed, reliable products and on-time delivery. Consistently delivering on these customer expectations requires simplifying manufacturing processes. Not just in a few areas, but in every area of the business. Currently, there’s no tool on the market that’s better at simplifying manufacturing than an enterprise resource planning (ERP) system.
It is all about getting rid of wasteful, inefficient processes, and that’s exactly what ERP software is designed to do. More than that, ERP motivates manufacturers to rethink the way they operate their businesses, let go of the outdated “we’ve always done it this way” mentality and begin to adopt new ways of working that meet the rapidly changing needs of today’s manufacturing customers.
Real-world example
Global Shop Solutions’ customer DoverMEI offers a compelling example of how ERP software can simplify manufacturing processes. Headquartered in Inman, S.C., this second-generation
family-owned business designs, builds and installs bulk solids handling equipment, including pneumatic conveying and batching equipment and controls. The company’s turnkey solutions provide safe delivery, storage and use of bulk materials to companies around the world, helping them work more efficiently while realizing significant direct and indirect costs savings.
For 40 years, DoverMEI ran its business without an ERP system. The lack of accurate real-time data on the shop floor led to a host of problems, including cost overruns, late shipments, inaccurate estimating and more. Using Global Shop Solutions’ ERP software for the past five years has transformed the business. Projects are completed and delivered on time and within budget. Parts are priced accurately. Spare part inventories are managed with precision. Perhaps most important, the efficiency and cost savings derived from ERP enable DoverMEI to become more competitive in its global markets.
DoverMEI demands a lot from its ERP system, and it never fails to deliver. Here are five of the many ways the company simplified its manufacturing with ERP software.
1. Digital material management
As a design build manufacturer, DoverMEI doesn’t maintain finished product inventory. But they still have to track material availability and costs in order to meet customer deadlines and production goals. The ERP software makes it easy to know what materials they have on hand, what they need to order and when. It also integrates the material ordering system with inventory and usage to facilitate automated purchasing based on material requirements, planning functions and purchase history.
“When we received an order in the past, someone had to go the storage area and see what materials we had in the bin,” says Mark Weissenberger, DoverMEI’s president and CEO. “Now, we can pull up the data in a matter of seconds, and we know it’s accurate. If the ERP software says we only have one or two pieces, we might do a physical check in case someone used the materials without recording the transaction. But, if the inventory screen tells us we have 10 available, we know it’s there.
“The ERP software also helps ensure we have the right materials on hand and we buy them at the volume that offers the best price,” he adds. “Before, we had to sort through all the vendor invoices to see how pricing fluctuated and how much we bought for the year. Now, we can access the information at the click of a button.”
2. Average cost builds
Buying parts and materials at different prices can make it hard to assign the correct cost to a project. The ERP software automatically determines the average price of every part or material on the shelf. This allows DoverMEI to assign one consistent and accurate price to parts rather than taking the time to cost older pieces at the old price and newer pieces at the new price. Weissenberger also uses an Average Price Dashboard to make informed decisions about costing parts.
“Suppose we built a product 10 times over the last three years,” he says. “The dashboard tells me what a part cost every time we purchased it. If one price is sky high and one is very low, that tells me they probably didn’t get recorded correctly. I can exclude those and get an average of the other builds to determine a more accurate price for the part.
“This is just one of many ways the ERP software helps us with competitive bids by knowing our true costs for a job,” he adds. “If a customer asks us to knock 10 percent off our quote, we can determine whether we can do that and still make money. Making these kinds of decisions based on accurate data lets me sleep better at night.”
3. Project management software
DoverMEI’s bigger projects can take up to six months to complete. The ERP software with project management capabilities easily handles the painstaking task of tracking complex manufacturing projects over long periods of time. From creating bills of materials (BOMs) to tracking labor time, calculating actual versus estimated costs and more, project management software keeps precise tabs on every phase of the project.
“Project management is one of the most important tools in the ERP software,” Weissenberger says. “In the past, the manual spreadsheets we used to track large projects
often contained a lot of errors. Sometimes we would get down to the last minute and discover some parts were missing – not good for a six-month, $4 million project.
“Project management capabilities let us know everything that’s going on in real time,” he says. “I especially like the ability to see the profit or loss at each phase of the project. This software is a must for design build engineering/manufacturing companies like ours.”
4. CRM history
DoverMEI has many parts without part numbers because they were made prior to implementing the ERP system. The customer relationship management (CRM) application provides an
alternative that’s just as quick and easy.
“If a customer calls in requesting one of our older parts, such as a solenoid for a valve,” Weissenberger says, “we can key in the customer’s name or company name to see everything they ever bought from us with CRM History. We find the data in seconds, and we know it’s the right part because it’s what we sold them last time.
“CRM allows us to answer inquiries over the phone right away because it contains a complete history of every customer,” he adds. “Our customers appreciate receiving quick answers, and our employees don’t have to add another item to their to-do list.”
5. Tailored software
The ability to tailor ERP software gives manufacturers a powerful advantage by enabling them to cost-effectively adapt the system to their way of doing business. DoverMEI has put this feature to good use: first by using the tailored dashboards and reports that are available to all Global Shop Solutions’ customers through the online library of tailored applications. And second, by requesting more complex custom projects built by Global Shop Solutions specifically for DoverMEI.
One of these projects involved creating a spare parts list generator. DoverMEI’s customers frequently request spare parts for their projects. Accordingly, the company will often buy a fully assembled valve with the intention of selling several of its parts as spares. Engineers tag those parts as spares, and the spare parts list generator pulls them from the BOMs to create a list before the project goes into production.
“Some customers want a spare parts list when they place the order, which we couldn’t do prior to installing the customization,” Weissenberger says. “Now, we create a BOM and the list generator builds an accurate spare parts list for the customer. It used to take a week of calling vendors to make sure we got the right prices and parts. Now, it’s all there in the ERP system, at the touch of a button.”
With the ERP software, DoverMEI now has access to real-time, accurate data that lets the team there make the right decisions for their business. There is no more guesswork when it comes to job costing or manually running across the shop searching for parts. They get the information they need, when they need it, all from a single system that runs from quote to cash – and enjoy simplified manufacturing in the process.
