revenue growth MANUFACTURING KNOW HOW 4 STEPS TO IMPROVE your business CRITICAL QUESTIONS to ask yourself LEARN FROM best in class manufacturers

Transcription

1 MANUFACTURING KNOW HOW Guide 2 How to increase your revenue growth 4 STEPS TO IMPROVE your business CRITICAL QUESTIONS to ask yourself LEARN FROM best in class manufacturers FIND OUT how Microsoft Dynamics can help Grow your business bit by bit! Based on Aberdeen Group Benchmarking Research Commissioned by Columbus

2 Demand has never been as volatile as it is today and this volatility has impacted the entire supply-demand network. Discrete manufacturers must deal with increased supplier lead times, reduced inventory buffer levels, compressed new product introduction cycles and more. To succeed in today s fast paced market place and consistently grow revenue it is important for discrete manufacturers to invest in the right blend of leadership, business process, and technology capabilities. This guide to discrete manufacturing is designed to be a quick yet effective reference for executives to understand how to spur on revenue growth in four easily implementable steps. Each step will give a high level overview of the concept, support the concept with proof points from industry analyst research as well as from real manufacturers experiences, and end with a discussion of how Columbus technology and services can play a supporting role. Finally, we hope this guide is only a first step in your journey towards improved revenue growth and we look forward to the opportunity to be a trusted resource and partner. Based on Aberdeen Group Benchmarking Research Commissioned by Columbus

3 4 STEPS TO ACHIEVE REVENUE GROWTH Step 1: Build speed and agility into flexible business processes to be better positioned for capitalizing on market opportunities Step 2: Develop real time decision making capabilities for a more responsive supply chain Step 3: Improve the new product introduction process as main engine for revenue growth Step 4: Create a customer driven organization to deliver new service and solution models for improved revenue growth BUSINESS AGILITY Introducing RapidValue, a business process modelling solution that is fully integrated with leading ERP solution, Microsoft Dynamics AX. It enables manufacturers to meet up to 80% of their business requirements right out of the box. ColumbusManufacturing has mapped best practice manufacturing processes and built them into Microsoft Dynamics AX to help organizations realize the full potential of the solution and gain a quicker return on investment. How does RapidValue help you Increase Revenue Significantly faster and cheaper rollout into further business units Flexibility to adapt business models to suit local situation Reduced diversion of management and key players during implementation Training focussed on learning the basics to operate the business from day one Ability to generate and implement new business models quickly Growth Rapid deployment of complete AX2012 solution (applications, processes, procedures, parameters) RapidValue helps you rollout AX2012 faster and cheaper, and gives you flexible tools to model and implement new business models For more information on RapidValue please go to

4 1: Build speed and agility into flexible business processes to be better positioned for capitalizing on market opportunities Many discrete manufacturers today are trapped by inflexible and out dated business processes and supporting systems. In today s volatile market place, in order to capture market opportunities, it is critical for discrete manufacturers to react quickly and support these changes with flexible and adaptable systems. A new product, a new geographic market, a new partnership, or a new customer service opportunity, all represent ways discrete manufacturers can grow revenue but they all require supporting systems. At leading discrete manufacturers these supporting systems are generally encompassed as part of an overarching ERP system and involve business process automation that allows for standardization and flexibility. By taking an automated approach it allows for the modeling, visualization, and testing of business processes before they are rolled out. This approach allows discrete manufacturers to standardize but also adapt processes quickly as new best practices emerge. It also allows for discrete manufacturers to quickly build compliance into business processes and ensure decision makers have the right information at the right time, all of which are critical to success and can t be sacrificed every time a company wants to change a process. QUICK START: To jumpstart performance in improving business processes, leading discrete manufacturers are taking the following actions: Model and visualize business processes with automated tools Standardize business processes across sites and departments Build new best practices into business processes as they emerge 4

5 Manufacturing at Kamstrup, a Columbus customer Manufacturing at Thorlabs, Inc., a Columbus customer Microsoft Dynamics in the spotlight: Workflows and Alerting In Dynamics AX each and every user is able to define rules about how they need to be alerted when certain conditions or events occur. For example, a sales manager may want to know if a price is changed, a warehouse manager may want to be reminded 3 days prior to a large delivery, or a buyer may wish to know if a delivery date is missed. Alerts or reminders can be defined so that they the user automatically when the conditions occur. Taking this further, Dynamics AX includes an in-built workflow engine that allows business processes to be mapped out and acted upon assigning tasks and approval actions to the appropriate users in the business. Each workflow is defined using a drag-and-drop flowchart tool and includes rules for who needs to be assigned, deadlines, escalation procedures and automated actions. When workflow processes are introduced they deliver tasks to users automatically, improving the effectiveness of the business process and providing deep insight into the progress of a business procedure. Reporting and Analytics Most managers would agree that the value of business intelligence is difficult to underestimate. However, business intelligence tools have traditionally been complicated to deploy, requiring an in-depth understanding of the structure of the underlying data and therefore requiring costly consultancy services. The initial cost of these tools has also been high. Furthermore it is usually also necessary to provide end users with a level of training before they can use them. The end result? Business intelligence tools are provided to a handful of users in the business and covering a small section of business information, usually sales analysis only. Microsoft has a different approach to Business Intelligence. In Dynamics AX all users (subject to security restrictions) are provided with access to a complete suite of pre-defined measures and indicators with coverage across all aspects of the system. Users are able to create security-enhanced reports using drag-and-drop report authoring, and display key performance indicators (KPIs) directly in a management dashboard style view (called Role Centers).? Questions to Answer: > How long does it take you to roll out new best practices across your organization? Best-in-Class discrete manufacturers are more than 25% as likely as Laggard organizations to build workflows and alerting into standardized business processes. According to a recent Aberdeen Group Benchmark Research Project sponsored by Columbus 5

6 2: Toilet manufactured by Pressalit, a Columbus customer Develop real time decision making capabilities for a more responsive supply chain With an established framework for defining, standardizing, and improving business processes in place; leading discrete manufacturers are looking to understand how they can start making better decisions. To make better decisions it is important to provide the right decision maker, the right information, at the right time. To accomplish this, discrete manufacturers need to be able to sense and respond to non-conformances as they occur in real time. All too often it is the case that discrete manufacturers are using backward looking reports that are using out dated data and lagging indicators. Real time decision making starts with data collection and the data model. Leading discrete manufacturers have an established and standardized data model for automatically collecting manufacturing, supply chain, engineering, customer data, and more. This data is then fed into the overarching ERP system to ensure that it is properly maintained over time and can be incorporated into enterprise dashboards with Business Intelligence systems integrated with ERP. The other piece of real time decision making is the metrics used. It is important to understand past performance but also what will drive improvements in future revenue growth. Great leading indicators of revenue growth can include supply chain metrics like On Time and Complete Shipments or manufacturing metrics like Overall Equipment Effectiveness Watch manufactured by Georg Jensen, a Columbus customer QUICK START: To jumpstart performance in real time decision making, leading discrete manufacturers are taking the following actions: Automate data collection from across the organization Use a standardized data model for capturing data Focus on measuring and reporting on leading indicators 6

7 Printing solutions manufactured by Mueller Martini, a Columbus customer Street Lights manufactured by Urbis, a Columbus customer Microsoft Dynamics in the spotlight: Supply Chain Visibility If a business is manufacturing a complex product with many depths to the bill of materials it is no surprise that it can sometimes be difficult to track exactly what is happening and where delays might be occurring. Especially with the added complexity of operations that include sub-contract work and vendor managed inventory, perhaps with some processes where kanban operations have been introduced. Dynamics AX includes features that can give full visibility of component and sub-assembly availability, lead times and resource requirements. All of this information is also provided in the form of a timeline Gantt chart, providing the user with unprecedented levels of visibility. Incorporated into this timeline are the capacity requirements so where these become a constraint of the delivery timescale they too can be seen. Torsten Lytken, Infrastructure Systems Director, Thorlabs, Inc. GROWTH THROUGH ERP IMPLEMENTATIONS In our industry revenue growth comes from new technology and innovation. We gain this through acquisition but also through a unique engineering and product innovation platform that enables crowd sourcing and wisdom capture from across our own organization and well as other supply chain stakeholders. In our case both of these strategies rely on a strong centralized ERP implementation.? Questions to Answer: > How long does it take you to sense and respond to a disruption in the supply chain? Best-in-Class discrete manufacturers are more than 50% more likely than Laggard organizations to measure manufacturing performance in real time. According to a recent Aberdeen Group Benchmark Research Project sponsored by Columbus 7

8 3: Manufactured by Hi-Tech Mold and Engineering S.E. Inc., a Columbus customer Improve the new product introduction process as main engine for revenue growth One of the top strategies discrete manufacturers are focused on for growing revenue is to deliver new and innovative products to market. Unfortunately, quickly delivering new products to the market can put a tremendous strain on engineering, manufacturing, and supply chain operations. If the right collaboration tools and processes aren t in place to support these groups, there can be a major hit to operational efficiency. A new product involves changes to production processes, raw material specifications, quality inspections, and more. If every group in the value chain isn t on the same page with these process changes because it is managed through traditional tools like or home-grown data bases the result is clear, many costly mistakes will be incurred. To help better manage collaboration across these groups and streamline the delivery of new products to market discrete manufacturers are first and foremost interoperating between PLM or CAD/CAM solutions and ERP. This approach ensures that all groups are working with the same version of the truth and it is easy to pass data between groups with it still being in context. Ultimately, by ensuring they can efficiently collaborate between engineering, manufacturing, and the supply chain on the delivery of new products to market, discrete manufacturers are well positioned to capture new market opportunities and grow revenue. QUICK START: To jumpstart performance in new product introductions, leading discrete manufacturers are taking the following actions: Automate the engineering change order process Integrate PLM and ERP systems for a single version of the truth in product data Create closed loop feedback between manufacturing and engineering 8

9 Controller manufactured by Sevcon, a Columbus customer Pumps manufactured by MetPro, a Columbus customer Microsoft Dynamics in the spotlight: PLM/CAD Integration The time taken in turning around an engineering change within a business is a delay to the customer and an increased cost to the business. By integrating the business system with product lifecycle and product data management applications the business can streamline change processes, reducing costs and providing a faster and better managed response to the customer. Integrating the business system with CAD systems allows multi-level bills-of-material to be imported directly into the business system, reducing costs and making planning tools available immediately. The Connectivity Studio allows the business to define and maintain interfaces or connections between Microsoft Dynamics AX and any internal or external system resulting in less bespoke development, higher levels of reuse, decreased costs and reduced errors. Quote from a Columbus Customer CUSTOMER FOCUSED TO DRIVE GROWTH We are working to spark growth by becoming more customer focused. This means differentiating in the products that we make and also in our ability to quickly deliver highly configured and engineered products to our customers.? Questions to Answer: > How long does it take your organization to deliver a new design to manufacturing? Longer than you would like? > How much market share does your company gain through new product introductions? Best-in-Class discrete manufacturers are able to hit New Product Introduction targets almost twice as often as Laggard discrete manufacturers (94% vs. 49% of the time) According to a recent Aberdeen Group Benchmark Research Project sponsored by Columbus Heating ducts manufactured by Exheat, a Columbus customer 9

10 4: Fluid Handling Systems manufactured by Aliaxis, a Columbus Customer Create a customer driven organization to deliver new service and solution models for improved revenue growth The first three steps have been focused on achieving revenue growth through establishing excellence in finance, supply chain, agile business processes, and engineering. For many discrete manufacturers, the final and most important step towards growing revenue is moving towards becoming a more customer driven organization. Customers today are more demanding than they ever have been before and this poses challenges as well as opportunities. If discrete manufacturers aren t up to the challenge, they will face a customer that demands more visibility, more collaboration, quicker lead times, and higher quality products with no ability to deliver on these new requirements. For those discrete manufacturers that are up to the challenge, they will be able to win more share of key customers business and become trusted partners. They will also be given the opportunity to create new offerings for their customers beyond just their traditional products, including new service offerings. In fact, coupling service offerings with manufactured products to create complete solutions is one of the leading trends for revenue growth in the discrete manufacturing industries. However this is only a successful strategy for those discrete manufacturers that have already achieved great success and maturity in internal operations and mastered the first three steps highlighted in this guide. QUICK START: To jumpstart performance in creating a customer driven organization, leading discrete manufacturers are taking the following actions: Integrate data across customer service and the rest of the enterprise Find new opportunities and business models for coupling services or solutions with traditional discrete manufacturing products 10

11 Rail tracks manufactured by Progress Rail, a Columbus Customer. Furniture manufactured by Orangebox, a Columbus Customer Microsoft Dynamics in the spotlight: Capable-To-Promise Customer service can be about setting the correct expectations with the customer, especially around delivery dates. During sales order entry the user is able to quickly establish if the customers requirements can be met in the timescales that they are demanding. If materials or capacity are lacking then this is indicated immediately and, importantly, a date when the order can be fulfilled. If the user needs to investigate further then they are able to get full visibility of the component and sub-assembly availability, lead times and resource requirements. All of this information is also provided in the form of a timeline Gantt chart, providing the user with unprecedented levels of visibility. Service Management In some businesses the opportunities for providing after-sale services can be as lucrative as the initial product sale. Dynamics AX features a service management module that provides management of service contracts, including scope, SLAs, invoicing and contract renewals. A contract can include scheduled or preventative maintenance requirement, in addition to repair work. Tools are available that assist in scheduling the engineer, managing spare parts and stock, recording expenses, diagnostics and fault analysis, etc. Costs are managed and reported against budget and in-built metrics provide insight into the types of problems, cause and resolution, service level fulfillment and performance against targets.? Questions to Answer: > Do you view your service offerings as cost or profit centers? > Has your company been able to grow revenues by focusing on delivering complete solutions to customers not just products? Best-in-Class discrete manufacturers are more than 50% as likely as Laggard organizations to have real time visibility between manufacturing operations and customer orders. According to a recent Aberdeen Group Benchmark Research Project sponsored by Columbus 11

12 DON T MISS OUR OTHER GUIDES Guide 1: How to improve operational efficiency Guide 3: How to improve supply chain collaboration Guide 4: How to improve quality control & industry compliance Columbus has a deep engagement in the manufacturing industry; we build targeted solution sets on top of the reliable Microsoft platform. Our solutions often meet 80% of the industry requirements right off, and with basic system configuration, you will experience the full impact on your business performance with a lower total cost of ownership. To-Increase, a global ISV and division of Columbus, has been developing high quality software solutions for Manufacturing since Today, they offer an extensive library of customized modules and industry-specific solutions to reduce implementation time and cost, and improve business operations. Customers from all over the world tap into this vast library of software modules to improve performance and shareholder value. The full Columbus solution includes best practice process modelling with RapidValue, the leading ERP solution with Microsoft Dynamics AX, specifically built manufacturing modules from our To-Increase software division and SureStep+, a proven implementation methodology. ABOUT COLUMBUS Columbus is widely recognized as a global leader in maximizing efficiency and business performance for manufacturing and distribution companies. With deep industry expertise we know how to make our clients more successful by adapting and implementing proven Microsoft-based solution sets for immediate business impact. Columbus is a part of the registered trademark Columbus IT Implementation Methodology SureStep+ Business Integration Solutions To-Increase Business Process Modeling RapidValue COLUMBUS KNOW HOW Industry Solutions To-Increase ERP Solutions Microsoft Dynamics FOR FURTHER INFORMATION PLEASE VISIT Address: Icon Business Centre, Lake View Drive Annesley, Nottinghamshire, NG15 0DT United Kingdom Phone: +44 (0) Fax: +44 (0) Web: