Manufacturing organizations are under pressure to anticipate customer requirements and to quickly respond to an increasing array of changing market demands. Such organizations are meeting these challenges by implementing a variety of production strategies across multiple product lines. In doing so, they aim to maintain market share through growth and acquisition of companies that will complement their existing product offerings. As a result of this strategy, companies that have tried to integrate their legacy discrete ERP systems across their newly acquired organization have found this approach to be akin to the popular expression “like trying to fit a square peg into a round hole.”
In an earlier article published by TEC, Getting It Right: ERP Solutions for Mixed-mode Manufacturers, I described in detail some of the clear differences between non-mixed-mode ERP systems and mixed-mode ERP solutions. In this blog post, I will examine some of the problems encountered when a discrete ERP solution does not meet core functional requirements of a mixed-mode manufacturer, and how software vendors are dealing with this issue.
Why the Singular, “One Size Fits All” Approach Does Not Always Work
As stated earlier, manufacturers are facing increased pressures in the form of global competition, demand-driven supply chains, and from the challenge to remain cost-competitive by generating a wider product offering having a greater variety of product specifications and performance features. These issues have forced manufacturers to consider how they can integrate a variety of manufacturing processes using a singular approach.
This dilemma is best illustrated by examining how an organization can implement several approaches to meet the complexities of their product mix. Some products may be made-to-stock (MTS), based on sales projections. Others can be made-to-order (MTO), and still others can be engineered-to-order (ETO)—manufactured based on customized specifications. In addition to the challenges mentioned above, issues abound when trying to integrate product design and engineering changes, as well as when trying to integrate quality management systems (such as six sigma) and manufacturing philosophies (such as lean manufacturing techniques) with traditional manufacturing methods. Manufacturers are increasingly finding that one size may not fit all when it comes to implementing ERP solutions across their manufacturing landscape.
Enter the Mixed-mode ERP Solution
Software vendors have heeded the call of the manufacturing industry by introducing mixed-mode enterprise software as a solution that gives organizations the agility to carry out both process and discrete manufacturing processes, as well as the ability to integrate manufacturing styles across the organization (see complexities of product mix listed above). With the mixed-mode approach, manufacturers can facilitate planning, meet market demands, and execute and measure both production results and performance of a manufacturing work center and plant location.
An organization can see measurable payback in several areas: greater efficiency, resulting in increased customer retention; repeat business; improved service levels; and the ability to manufacture a product according to a unique set of customer criteria.
Measuring Mixed-mode Benefits
Managers will always cite transparency, visibility, and having meaningful data from across the organization as the best approach to obtaining a 360-degree view of the business’s operations. Compare this approach to one where an organization has many systems working independently of one another: here, delivering timely information to both clients and management is extremely time-consuming, and there is the risk that information may not be received when it is needed. Here are some of the additional benefits an organization can gain from a mixed-mode ERP system:
• elimination of duplicate processing of work orders’ production results
• improved inventory accuracy
• reduction in the time it takes to process orders
• measurements in inventory accuracy and supplier performance
• reports related to order delivery performance
• the ability to set parameters related to key performance indicators and to display these in a web portal
A Final Thought
If your organization has grown as a result of an acquisition or a merger, you need to harmonize disparate legacy systems into a streamlined solution that can capture a wide variety of manufacturing processes. Perhaps it is time to take a look at how a mixed-mode ERP system can benefit your organization and address your needs for greater control and visibility.
One great source of information on mixed-mode manufacturing vendors and solutions is Technology Evaluation Centers’ (TEC’s) mixed-mode vendor showcase or evaluation center. You can also visit TEC’s web site to download white papers, read articles, and listen to podcasts, to broaden your understanding and knowledge of this technology area, as well as others.
I want to know something about SAP
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Sharif & Raj
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