By Mike Hart
Business software packages address all kinds of functions, including inventory, purchasing, sales, CRM, e-commerce, service, project management, financial applications, and human resources.
These functions are important, but if you have a manufacturing company and your software does not address the fundamentals of manufacturing, you will never reach your efficiency potential, no matter how good your software might be in these other areas.
What are the fundamental features that are essential to any good manufacturing software package? Here is my list.
Routings
Routings enable you to define the processes used to manufacture your products and to specify the work centers where they are performed. Routings provide workers with manufacturing specifications and enable you to schedule jobs, track jobs in progress, and calculate the cost of labor, outside services, and factory overhead. Any software package that lacks routings is not a serious manufacturing solution.
Bills of Material
It’s impossible to manufacture without a bill of material, meaning a list of the components that comprise each product. Virtually all software packages offer at least a rudimentary bill of material, but there are advanced features that can benefit your efficiency, including revision tracking, phantom assemblies, and multiple outputs.
Cost Rollup
Knowing your costs is essential to good decision making. The cost rollup calculates the total cost of each manufactured product up through all levels of the product structure and breaks the cost into these elements – material, setup, labor, outside services, and factory overhead.
MRP
Jobs and purchase orders should be generated on a “just in time” basis by an MRP program that takes into account stock on hand, net demand from sales orders and jobs, and item reorder levels. Any software package that relies on shortage lists and manual planning is not a serious manufacturing solution.
Job Release
You must have the ability to gauge and control when jobs should be released to production so that the shop operates at its optimum carrying capacity without getting overloaded.
Job Traveler
The job traveler provides workers with the specifications needed to perform processes accurately with high quality. Product documentation is core to any quality assurance or ISO-9000 program and will be required by your customers if you are a contract manufacturer. Ideally, your software will also support linked documents and custom item labeling.
Work Center Scheduling
To operate the shop efficiently, you must know what job sequence to run next in each work center. Jobs that are behind schedule should be given priority over jobs that are running ahead of schedule. This way, all jobs meet their scheduled finish dates and you avoid expediting rush jobs at the expense of other jobs.
Job Tracking
You must have the ability to track jobs in progress so that you can keep jobs on schedule and react quickly to problems. Job tracking is accomplished through the real time reporting of job sequence completions, using standard hours or collecting and reporting actual labor hours.
The bulk of your efficiency gains will be achieved by focusing on these eight core functions and getting them down cold. All the other bells and whistles that festoon so many manufacturing systems may have some peripheral value, but are not fundamental to reaching your efficiency potential.
Mike Hart is the co-founder and President of DBA Software Inc., a leading provider of manufacturing software for small businesses.
Great focus points, Mike. I think you have all the basics lined up here. Perhaps in a 2nd piece, consider touching on the optional standard modules like quality, MES, Kanban, etc. Also, its vital to include IS0-9000 which is something companies often overlook is their software search.
Best,
Jason
www.profitkey.com
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