ERP Manufacturing Explained
ERP Manufacturing Software Implementation
What is ERP (Enterprise Resource Planning)?
ERP is a valuable tool and very integral to the management of organizations, businesses and companies all over the world, of all sizes and industries. ERP software started in the manufacturing industry as MRP and since then has evolved to meet the demands of different areas of business. Enterprise Resource Planning software today has more features than ever before, however, not all ERPs are created equally and some lack the features needed to handle the complex needs of manufactures. As a result, many organizations have opted for manufacturing industry-specific solutions or more inclusive ERPs such as Odoo to meet their manufacturing needs.
Manufacturing ERP software integrates manufacturing, inventory, sales and workforce management, as well as accounting to help businesses ensure raw materials are in place and available for product production, but functionality does not end here. The Odoo ERP software, for example, manages the entire manufacturing process, from the creation of your bill of materials to the automated re-ordering of materials when stock is low. With traceability, your products can be traced all the way back to their component parts lot number. because of its connection to sales and accounting,
ensures that your financials are accurately automatically recorded to track cost and profitability. Through these and various other features, ERP software is able to successfully manage and automate important manufacturing activities.
What is Manufacturing?
ERP Software Helps Manage:
A Modern Integrated Solution For Manufacturing
Schedule Materials, Orders, Resources and More. Your MRP, Quality, Maintenance and PLM apps are fully integrated on one platform. .
Control Your Production
ERP Software gives you more control over key manufacturing areas, quickly fix and synchronize your engineering changes, bill of material (BOM) and routing to increase your reactivity to customer demand.
Optimize your inventory level
Keep inventory in check. Automated actions, threshold levels, and pre-defined inventory rules. Your master scheduler calculates everything for you .Use routes, constraints and lead time to optimize inventory levels and avoid shortages.
BOM (Bill Of Materials)
The Bill of Materials, or BOM, is the description of components needed in order to build a product. For example; let's say we needed to build a table. The Bill of Materials would tell you that you need to have a tabletop and four legs as well as some screws in order to assemble the table.
Different Levels Of BOM
Because each individual component can also have its own BOM, there are what are know as levels of BOM. Each with their own set of sub-components. Like-wise a sub-component can also have its own BOM, making for multiple BOM levels. This feature is very important, but it is a feature that some ERP software does not handle correctly. However, this feature is included in the Odoo ERP software and you can manage as many different levels as needed.
Routing is a description, or road-map, of the processes that need to be followed in order to assemble a product. Descriptions are placed in order based on the way a product needs to be built. For example, with our table, there is an exact process to be followed, starting with the assembly of the table (attaching tabletop to the legs) then the painting of the table, then varnishing, then packaging. Each operation will be handled by a particular work center and some operations may also be subcontracted and performed outside of your company. These outsourced tasks can also be managed within the ERP software.
In addition to routing operations, one other step that is performed is Quality Assurance. Steps, Quality checks can be performed several ways;
Visual Check: Looking at the object to see if it is properly built
Picture Check Accessing quality based on how the finished product looks in a picture
Measurement Check; Checking quality based on the dimensions of the finished product as compared to the routing description. This can be measured manually or with connected tools such as IoT connected cameras, etc
Work orders are documents provided to the manufacturing shop floor as signals to produce a certain quantity of a certain product. The work order includes your BOM and routing. In other words, it will provide the materials and the processes for assembling a product.
The system will create an individual work order for each operation and their respective work centers in your ERP. So going back to our table example, there will be one manufacturing order and 3 work orders to assemble the table.
Master Production Schedule
ERP software gives manufacturing facilities the ability to create a master production schedule. A manufacturing center can receive multiple manufacturing orders at once, so, it is important for everything to be created and managed on time. A master schedule allows you to properly assign work based on the current workload and capacity of your manufacturing work centers.
PLM (Product life Management) and Product Engineering
PLM is a way to manage the entire lifecycle of a product. PLM refers to everything; the design, engineering, manufacturing, sales and service of a product up until it reaches its final destination in the supply chain. In a similar light, Product Engineering is particularly interesting as it pertains to the way we build a product. It can be understood as a synonym of PLM.
Engineering Change Order
To continue on our example of the table. Let's say several customers have left poor reviews on your table and decide to return it because it broke. This may be an indication that something needs to be changed in the engineering of the product. Here you can try to change the BOM or the routing depending on the identified problem area. Within a newly created Engineering Change Order, there will be a list of steps to improve the manufacturing of the table. These are known as BOM modifications and Operations modifications. This change order will be the first step in authorizing changes to the materials and or processes used to manufacture a product.
Traditionally, product engineers would take these new changes into account and also review cost and sales control. Cost control will ensure that the item still keeps a competitive price on the market and sales control will see to it that this price is adjusted accordingly based on other market competitors. Engineers will also so perform a Quality norm check, that determines whether the product matches up to what is normally expected for a given product.
Keeping Track Of Engineering Orders With Effective Dates
An effectivity date or effective date indicates when the changes identified in an engineering change order will be valid. Any existing orders prior to this change will continue to use the original BOM and routing sheet until the effective date.
Work Center and Employee Performance
Some ERP software comes with attendee monitoring, a feature that lets operators gauge the performance and time taken by each production worker and assign tasks accordingly. These metrics can be sorted tasks and provide useful timesheets for accounting and real-time data for manufacturing productivity. \
By-products are the result of the leftover materials left by a particular component. ERP software makes it easy to manage by-products by allowing your BOM to include more than one product.
Products can easily be traced back to their original material thanks to product traceability. This is a very important feature, especially when there is an issue with a finished product. The pieces can be traced with a lot number and all products with that specific component can be marked or recalled. They can be tracked by lot or serial number. The serial number of a product is a unique quantity of a product whereas a lot number is how we reference multiples of the same product.
Quality Checks & Alerts
ERP software allows you to manage quality alerts and checks. By managing quality checks, problem areas can be quickly identified, solved and prevented from reoccurring.
There are several other modules or applications within the ERP software that are related to your manufacturing applications, including inventory, sales and your attendee module. Easy to use and powerful these connections of these applications can add a ton of value to your manufacturing operations.
Manage the quantity available, the picking of raw materials, and where finished products will be located before being sent out.
Keep tabs on employee check In and check out to gauge their productivity and amount of time worked.
An ERP's connection with sales is very valuable for manufacturing operations. Some products are made to order based on a sales order. Referred to as make-to-order, these particular products only get made when they are purchased by a customer.
Keep your line operational and stay on top of machine efficiency. Whether it's preventative or corrective, In addition to automated reminders, Odoo gives users the tools to manage organize and plan out maintenance activities.
Manufacturing and sales are closely tied with reordering rules. In Odoo Reordering Rule refer to a rule that triggers the purchase of a product when the stock reaches its minimum level. These automated orders in an ERP system entail the creation of multiple units as opposed to one. This occurs in situations where creating just one made to order the product is inefficient, and a certain threshold of products needs to be kept at all times. Once inventory reaches a certain number. Let's say 5. The reordering rule will be triggered to manufacture more products to replenish inventory.
What is the Manufacturing ERP Deployment Process?
ERP Manufacturing deployment is carried out very similar to the way we typically deploy ERP systems which include the following steps:
Final Test With The Customer
Support / Maintenance
While it can be deployed alone, there are some additional modules that are recommended to get in order to get the most out of your manufacturing system. For starters, you will need an inventory module to be linked to your manufacturing. It will have all of your materials and finished product. Another module is accounting to keep track of expenses. Sales and purchase are also recommended but are not necessary. Once these are set in place your integrator would advise you to add your PLM and maintenance modules. Apart from these specifics. Your ERP deployment will go as follows;
Business Analysis: In this step of the implementation process, your new ERP integrator's goal is to find your company's "Big Picture". Properly performed the business analysis should reveal and help properly detect business needs and the related opportunities, potential solutions, and or possible areas of improvement. This step is very important for following best practices when implementing an ERP solution. All the elements to go into your cloud-based ERP, project management and sales for example, will be determined here.
Configuration/Customization: Any modifications that are needed will be made in this stage of the implementation and will vary based on the needs of the company. Advanced deployments, data migration and special applications are created here as well.
Final Testing: After the software is modified, final user testing begins on the ERP system. System testing is put in place to ensure that all specific business needs and project requirements have been met.
Training: This is the last step before the new system can go live. In order to have a successful ERP implementation, the organization and its users must be trained on how to navigate and operate the software. User training is often overlooked or poorly executed, ultimately leading to issues later down the road.
Going Live: It's time to go live! The ERP software is finally launched and is in full usage.
Support/ Maintenance: an integrator like Captivea will continue to monitor and maintain your new ERP system. Dedicated consultants will be readily available to answer your support requests and provide daily support regarding the use of the software and requests for product evolution. All to make sure that your ERP solution is optimized for your organization.
ERP Manufacturing Implementation Cost & Duration
How Much Does ERP Implementation Cost?
The cost of ERP implementation depends on multiple factors including costs for software licensing, hosting, the number of software services as well as the number of users who will be using the implemented ERP software. But as you can imagine there are several aspects that go into manufacturing so its cost would be far more than deploying a CRM or sales module. Yet if you truly want to take advantage of the manufacturing module you must have the supporting applications as well.
How Long Does ERP Implementation Take To Go Live?
The implementation of an ERP solution can take anywhere from 2 to 24 months based on the number of software services and or modules being implemented. The number of users as well as the level of customization needed to be made on a ERP system will also have an impact on the timeline of implementation.