Category Archives: Manufacturing

Optimization is Supply Chain’s Simulation

A recent article over on Industry Week pointed out how Simulation is “Empowering Product Engineers to Save Time, Money (and the Planet Too)”.

According to the article, simulation helped:

  • NatureWorks design a new biodegrade chip bag for SunChips,
  • Balzer Pacific Equipment Co. design and manufacture a new barge to carry 6,000 tons for a client that required less steel and saved $20,000 in steel costs, and
  • Unverferth Manufacturing Co to create a new strip-till subsoiler in only 3 months that was ten times stronger than its predecessor, required less parts and cost thousands less to make.

Optimization offers similar benefits to your supply chain. It:

  • allows you to redesign your supply chain network to be more efficient,
  • allows you to source the optimal amount of product at the optimal cost, which saves you a ton of money,
  • and allows you to complete sourcing projects in weeks that used to take months.

So stop waiting and just do it.

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If Mark Anderson is Right, it’s a Long Road to Recovery

According to a recent article in Strategy+Business on a return, not to normal, but to reality, Mark Anderson believes that three critical measures need to be put in place before serious recovery can begin:

  1. Better Protection of Intellectual Property

    Considering that most protection seems to revolve around patents that are abused by software patent pirates, not much progress has been made here.

  2. Reforms to Prevent Jackals and Vampires from Dominating the Market

    Specifically, reforms to prevent short sellers (jackals) and sophisticated investors who take profits without contributing either market balance or information (vampires) from dominating the markets. No progress has been made on this front either.

  3. Rebuilding of the Manufacturing Base of the Industrialized World

    Considering the outsourcing craze is still in full gear, especially now that even China is outsourcing to Africa, it could be a while before the manufacturing base in the developing world can even dream of being close to capacity again. Despite the fact that they haven’t learned the lessons of their peers who have found that they needed their expertise in-house and that the offshoring machine didn’t work very well.

Plus, thanks to the glut of hot money in the global liquidity pool, when the damaged parts of the split economies begin to come back, this liquidity will likely create a whiplash effect, throwing countries into hyperinflation before they can respond effectively. It seems inevitable.

And with the unemployment rate predicted to stay at 10% overall, it’s looking like a very long road to recovery.

So make sure to get your supply chain in order … you’re going to need the competitive advantage!

Why ERP Is Not Enough for Project Based Manufacturing

A recent article over on Industry Week on “5 Critical Issues for ERP in Project-based Manufacturing” outlined why ERP systems alone are not enough for project based manufacturing (and manufacturing in general).

The issues outlined in the article were:

  1. Bidding and Quoting
  2. Project Visibility
  3. Managing Change
  4. Financial Performance Tracking
  5. Rapid Time to Value

A carefully evaluation of many of the ERP tools on the market will reveal that:

  1. They don’t truly support modern e-Negotiation, and the company will also need a modern e-Sourcing tool (which may have to be integrated).
  2. As far as these systems are concerned, user-defined push alerts, flexible automatic notifications, and real-time reporting is still a pipe dream. A real time data analysis tool will be required.
  3. Flexibility is limited. At a a minimum, good processes will be required. A change management add-on may be required as well.
  4. Lots of data is tracked and stored, but financial analysis capabilities are limited. A real time data analysis tool will be required here as well.
  5. Implementation is rarely quick, and payback typically longer than expected. That’s why supplementary Sourcing and Procurement systems are generally required.

In other words, a good ERP system can provide a great foundation, but it will rarely meet all of an organization’s need.

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It’s Not Lean If You Haven’t Engaged the Maintenance Department

Industry Week recently ran a great article on how “Culture Counts” and how maintenance is deeply involved in any true lean initiative. Fundamentally, lean is about finding and removing waste — and who knows more about waste than anyone else in the organization? The people who watch it go down the drain. The people who watch it get hauled away. The people who shovel it into the incinerator. In essence, the maintenance department.

A true lean initiative never reduces headcount in the maintenance department. (In fact, it might actually increase headcount in maintenance.) A true lean initiative involves maintenance from day one and gets their insight on where the most waste is produced and what methods could be used to reduce or recycle it. In true lean initiatives, the maintenance department is a strategic player who not only finds a way to reduce waste, and associated costs, but to profit off of it. Just like food waste can often be recycled into animal feed, industrial waste can often be recycled into raw materials usable in another product or industry. (And if maintenance can identify a unique recycling process that can produce secondary products that can be resold, the size of the maintenance department might actually increase as you add people to support a profitable waste recovery and recycling initiative.) And that’s why it’s not lean if you don’t engage maintenance, as you could miss the strategic opportunities without their help.

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B2B Connex: Automating the End-to-End Purchasing Process

When we introduced you to B2BConnex last December, we told you about their e-Document Management Solution for Small & Mid-Size Manufacturers that is a great fit for all types of small and mid-size manufacturing organizations that need simple e-Sourcing and e-Procurement functionality at a low price tag (which starts as low as $30,000 / year, plus 20% annual maintenance for a small operation, and isn’t much more than $100,000 a year for a mid-sized operation).

Designed to fill the niche in the small and smaller mid-sized market left by the big end-to-end e-Sourcing and e-Procurement suite vendors whose big footprint solutions come with an equally big price tag, the B2B Connex solution allows for easy management of a slew of e-Documents — including RFQs, purchase orders, kanban orders, advance shipment notices (ASNs), payment inquiries, invoices, and sales orders, which enables an organization to efficiently conduct its transactional back-office procurement operations (especially since it integrates with a dozen ERP/MRP systems with minimal or no configuration).

Since our introduction to B2B Connex last year, they have been quite busy upgrading their platform and adding new functionality. They’ve improved their integrated scorecard capability, added more customer branding capability (which allows a customer to define their own logos, colours, fonts, etc), streamlined Excel integration for data import and export, and launched a new customer portal that not only streamlines the transmission of purchase orders, outbound RFQs, ASNs, and inbound shipment inquiries, but also contains a new shopping cart application that runs on a catalog that is customized for the customer.

The new portal application allows the manufacturer to tailor a catalog for each customer. For each customer, the manufacturer can specify what items are visible, what the price is for that customer (based on markups, contracts, or discounts), and any restrictions on purchase (minimums or maximums, manufacturing plants & shipping locations, etc.). Since the customer catalog is implemented as a view on the manufacturer’s full catalog, only customer specific information has to be defined for each product. It also contains embedded search functionality which makes it easy for the buyer to find what they are looking for and the manufacturer to find what products they want to make visible to the customer.

The cart works like your standard one-click e-Commerce cart, but instead of asking for payment information on submission of an order, it generates a purchase order that is automatically incorporated into the manufacturers back-office system and forwarded to the appropriate warehouse(s). Billing and shipping address, billing and shipping contact, invoice and ASN recipient, and (default) shipment method are all automatically filled in based on the customer representative’s profile, but can be manually overridden as required. Once the order is manually reviewed and accepted, a purchase order acknowledgement is automatically sent to the buyer. Once it is ready to ship, the buyer receives an ASN, which the warehouse personnel can generate in a single click (as it is automatically generated from the PO data and the shipping clerk’s profile). Once the order ships, an AR rep. can automatically generate and send the invoice (which also flows through the customer portal) in a single click (as all of the information can be pulled from the ASN and the WMS [Warehouse Management System]). The entire system has been designed to streamline the tactical parts of the purchasing process and eliminate duplicate data entry [which is the most common cause of errors and lost time in the tactical purchasing process].

The platform is multi-lingual and currently supports five languages: English, French, German, Italian, and Spanish. It’s also compliant with EDI standards and allows the customers to define their own menus, which can be used to include information about their own specific processes, requirements, and specifications. And the next major release, expected sometime this fall, is going to have scorecard (based) correction action reporting (SCAR) capability, which will be available through the portal and integrated with the scorecard capabilities.

At this point, with respect to the basic process they are trying to automate, about the only noticeable weakness is the lack of a bid analysis capability to complement their RFQ module, which would round out their e-Negotiation capabilities and enable them to provide a solid sourcing offering in addition to their solid purchasing offering for small and mid-sized manufacturers who don’t need sophisticated e-Sourcing platforms. But it looks like they won’t have this weakness much longer, as they indicated that as soon as SCAR is in general release, bid analysis is the next project in the queue and they plan to have a first release in the first half of next year. All-in-all, B2B Connex offers a very good solution for the price tag.

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