An Epicor White Paper Improve Scheduling, Production, and Quality Using Cloud ERP
Table o Contents Introduction...1 Best Practices or Discrete anuacturers...2 Inventory-based manuacturing...2 Discrete manuacturing...3 anaging production processes...3 Using the method o manuacturing...4 Top Practices or a Top-Perorming Production Floor...6 Production planning and scheduling...6 Quality...7 Cloud Deployed Epicor ERP...8 About Epicor...9 i
Introduction The sotware as a service (SaaS) model o application delivery, more commonly known as cloud deployment, in which sotware eatures are accessed through a Web browser, is an excellent way or manuacturing companies to get the beneits o enterprise resource planning (ERP) systems without the need to build additional IT inrastructure. ERP unctionality delivered rom the cloud avoids the complexity and costs that oten accompany on-premises ERP implementations, and typically provides a much more avorable total cost o ownership (TC), compared to legacy on-premises deployment. Companies subscribe to the sotware eatures that they need and can add new ones as business requirements change, without buying additional servers or storage to support new unctionality. The ERP eatures are the same as or an on premises ERP system, except that it is hosted and maintained on the cloud provider s inrastructure. Epicor Sotware Corporation is a leading developer o ERP sotware and systems based in Austin, Texas, with more than 40 years o experience in building ERP systems or thousands o customers around the world. Christine Hansen, a product marketing manager at Epicor with experience in the manuacturing business sector, presents some o the best practices used by discrete manuacturers. She also explains the beneits o the Epicor Cloud ERP solution. 1
Best Practices or Discrete anuacturers Epicor ERP systems are designed to manage many types o manuacturing methods; but or this discussion, we will concentrate on discrete manuacturing, which is typically used or low-volume, job-based production. By way o contrast, inventory-based manuacturing is typically used or high-volume production. Table 1 summarizes the process steps or both types o manuacturing. Inventory-based manuacturing Hansen notes that most o the process steps or inventory-based manuacturing (e.g., quoting, producing, and shipping), producing, and shipping, require simply checking inventory, whether or raw materials, components, or inished goods. She outlines the manuacturing process steps as ollows: XXQuoting a customer on a particular manuacturing job involves checking to see i materials are available in inventory or whether they need to be ordered, which may aect both pricing and delivery times. XXAn order will require a similar check o inventory, and may need materials to be purchased or inventory. nce the materials are received, they must be entered into inventory beore production can proceed. XXnce production begins, material is issued rom inventory to be used in manuacturing; as production proceeds, inished goods are placed back into inventory. XXWhen production is complete, inished goods are taken rom inventory to be shipped to the customer. Table 1: Comparison o Inventory-Based and Discrete anuacturing Process Step Inventory-Based Discrete anuacturing anuacturing Quoting or rdering aintain items in inventory Parts-on-the-ly Purchasing or Production Receive items to inventory Purchase direct to inventory Issue inventory to production Receive directly to production Production Receive production output to inventory Accurate work-in-progress (WIP) Shipping Ship rom inventory Ship directly rom WIP Source: Epicor Sotware Corporation 2
ost o our customers will use a mix o the two approaches. Epicor oers both methods, which allows our customers the lexibility to base the method on their current production needs. Christine Hansen, product marketing manager Epicor Sotware Corporation Discrete manuacturing According to Hansen, Epicor ERP is particularly suited to discrete manuacturing because o the reductions in work enabled by eatures o the sotware, including: XXParts-on-the-ly: a eature o the Epicor system allows a company to estimate, accept an order, produce, and ship products without the need to consult inventory XXI material needs to be purchased or an order, it can be bought directly into inventory; the system makes the appropriate inventory transactions automatically. In addition, items on the purchase order are tagged with an associated job number, eliminating the need or suppliers to tag materials XXaterial purchased rom suppliers can be received into production because the system has already tagged the material with the correct job number; production is also notiied o its receipt, saving additional time and eliminating potential conusion XXFinished goods can be shipped directly rom work-in-progress (WIP), rather than rom inventory anaging production processes any companies struggle with the need to strike a balance between how product costs are determined and how products are scheduled. Certain data is recorded regarding how a product is manuacturing based on costs, such as: XXLabor costs associated with manuacturing the product XXaterial costs to build the product XXverhead or burden costs allocated with the product XXSubcontracting or outsourcing costs or components or sub-assemblies that are eventually incorporated in the inished product Against these product costs are those associated with scheduling production, which include: XXProduction setup time, labor, and machine idle time XXThe amount o time required to manuacturing the product XXutsourcing or subcontracting lead times, i any XXLead times or materials required or production so that they arrive just in time or production The combination o these two manuacturing elements is called the method o manuacturing (). In essence, the is a manuacturing roadmap that includes the Bill o aterials (B) and the Bill o perations (B). Figure 1, ound on the next page, depicts the balance between these manuacturing elements, as well as the actors that comprise costing and scheduling. 3
I can pull a master method rom engineering to make my initial quotation, and then make any operational or step changes within the quote. This saves me the time to build a method o manuacturing rom scratch every time. Christine Hansen, product marketing manager Epicor Sotware Corporation Figure 1: ethod o anuacturing B ill peration Source: Epicor Sotware Corporation ethod anuacturing bjective Cost Labor Burden aterial Subcontract tl. Burden Bill o peration (Routing) Seq. peration Resource Estimate 10 20 30 40 Process Comments Verb Comments Internal External Thing Noun Qty. Time $ Schedule Setup Production Lead Time Related p. Days ut Bill o aterial Seq. Part Estimate 10 20 30 40 Purchased Comments anuactured Comments aterial Assembly B ill aterial R/ Qty. Cost When Using the method o manuacturing ne common use or the method o manuacturing is to make it easier to prepare a quotation or a product to be manuacturing. The master method o manuacturing contains all the details associated with manuacturing a product, so it can be used as a template or similar products. The Epicor standard practice is to have the system store the method o manuacturing in several repositories: with the quotation, with the job, and within the master engineering repository. 4
Figure 2: Using the ethod o anuacturing Quote ethod anuacturing rder Engineering ethod anuacturing Job ethod anuacturing Another use or the method o manuacturing is to provide a production history or a product, highlighting the dierences between how the manuacturing o a product was planned and how it was actually produced. Because the method o manuacturing also stores the complete history o revisions or a product, it is possible to see changes as they occur within the entire liecycle o a manuacturing product. The history o changes or production provides valuable insight into how engineering can improve a product s manuacturability and gives production ways to increase the overall eiciency o operations. 5
Top Practices or a Top-Perorming Production Floor Hansen lists three areas where best practices help top-perorming manuacturers concentrate their eorts: XXProduction planning and scheduling XXProduction management XXQuality Let s take a closer at look at these areas. Production planning and scheduling ne o the irst steps in the production day is to plan what products need to be produced to satisy existing orders, and to schedule production or them. Top-perorming manuacturers concentrate on our practices to maximize production: XXDeine existing capacity or production. A realistic assessment o production capacity includes actors such as the availability o machine time, the lexibility o the various types o machines or dierent tasks, and the availability o skilled labor within the organization. XXImprove accuracy o production scheduling. The master method o manuacturing provides a way or companies to continuously reine both manuacturing processes and the time allocated to them. For example, the load time (the amount o time it takes or production) could be stored or each job operation, and recalled to improve scheduling accuracy or uture quotations as well as or production. XXUse technology to enhance production control. An accurate schedule should be available not only to those in production planning, but also to people on the shop loor who may be actively managing or producing product. An ERP system has these capabilities and is lexible enough to accommodate changes. XXCommunicate the schedule to all stakeholders in the organization. The availability o schedules online means that anyone connected to the manuacturing process has accurate, up-to-date inormation to make good production decisions. A compelling case or cloud deployed Epicor ERP is the ease with which cloud deployment makes key worklows available across the enterprise and the global supply chain. Because nothing more than an Internet connected PC, tablet, or smart phone is required, cloud deployment is the most eective way to bring accessibility and integration to most organizations. aybe the schedule we laid out is perect, but how oten does it stay that way? asks Hansen. An ERP system can help to increase our overall manuacturing lexibility and eiciency. And with cloud deployment, everyone across the organization rom procurement to sales to ield services sta are kept in the loop o any changes to critical delivery dates and schedules. 6
Production management Another area o ocus or top manuacturers is the production management process. Hansen identiies our tasks in the process: XXExecute the production plan according to the schedule established earlier. The process should be the same whether it calls or a single day or a week s worth o production. XXanage changes in production in a proactive way to minimize the impact o changes on the overall schedule. XXIncrease the visibility o the entire production process so that the production schedule, materials management, current production operations, and quality are available to the organization. XXClose the inished job. any manuacturers miss this opportunity to implement continuous process improvement. The ability to compare expected costs and labor against actual results is critical to driving the organization toward more eicient manuacturing processes. All these tasks are made easier by using a cloud deployed ERP system, especially one that provides an end-to-end o the manuacturing process. The ability to update and reine your manuacturing methods will make them that much smarter or the next job, says Hansen. Smarter, more eicient methods mean increased proitability. Quality A inal area where top-perorming manuacturers excel is in maintaining quality throughout the production process. They do this by instilling quality principles throughout the organization: XXTracking quality incidents in a systematic way on a regular basis, beginning with the production loor XXIdentiying the root cause o a quality problem so that quality issues can be avoided in the uture XXaking quality in the production cycle an organizational objective How powerul would it be i your customer service could communicate an analysis o production quality or an order? asks Hansen. Not only building a quality product, but being able to quickly respond with evidence develops conidence in your manuacturing capability and process. 7
Cloud Deployed Epicor ERP Cloud deployed Epicor ERP is the ideal solution or companies looking to technology to help them punch above their weight, says Hansen. It s an end-to-end solution delivered online rom the cloud. Epicor Express includes the unctionality to manage the tasks o manuacturing (Figure 3): XXProduction management XXProduct management XXaterial management XXFinancial management XXCustomer relationship management XXeCommerce These eatures are delivered in an on-demand, subscription basis with ull documentation and always on support. Cloud deployed Epicor ERP users can also beneit rom the business intelligence eatures built into the system. Role-based dashboards, or example, deliver inormation about production processes and business unctions appropriate to the user s role in the production process. Production workers can view current machine or process data in high detail, while business or production managers can get a condensed view o all the business and production tasks in the company. These eatures communicate manuacturing perormance throughout the organization and enable companies to continuously improve business processes and production methods. Figure 3: Epicor ERP Customer Relationship anagement Contact anagement Lead & pportunity anagement arketing anagement Estimate and Quote anagement rder anagement ecommerce Web Site B2C or B2B Web Store Production anagement Job anagement Lean Production Data Collection Quality Assurance Scheduling Financial anagement General Ledger Accounts Receivable Accounts Payable ulticurrency Payroll aterial anagement Inventory anagement Purchase anagement Shipping and Receiving Supplier anagement Warehouse anagement Product anagement Bill o aterials Routing Engineering Change and Revision Control Product Costing Document anagement n-demand Business Architecture Web Browser and Smart Client Access Next-generation Cloud Computing Platorm Data Security and Business Continuity Business Process anagement Business Intelligence Role-based Dashboards Inormation Trackers Comprehensive Reporting High Speed Search Copyright 2014 Epicor Sotware Corporation or subsidiary or ailiate thereo. All rights reserved. Source: Epicor Sotware Corporation 8
These technologies make it easier or an organization o any size to manage scheduling, production, and quality on their production loor. Christine Hansen, product marketing manager Epicor Sotware Corporation Epicor ERP Epicor ERP was designed to enable small manuacturers to ocus on their core business rather than on managing an IT inrastructure. It lowers the traditional barriers to on premises ERP systems with a minimal upront cost and an aordable ongoing investment. It allows companies to dedicate their IT resources to support their strategic objectives, rather than having those employees ocused on low value system administrative unctions. Some companies have expressed concerns about the security o applications and data stored in the cloud. However, Epicor ERP runs in a Tier III certiied data center, with network intrusion prevention and application security. To ensure business continuity, Epicor has built redundancy into their servers, storage and databases, with data stored in multiple physical data centers. For more inormation on the speciic details o Epicor Cloud deployed ERP, please reer to the Epicor Cloud Deployment Technical Q&A document available rom any Epicor Solution consultant. Companies using discrete manuacturing can certainly beneit rom these best practices combined with cloud technology. Cloud deployed Epicor ERP takes ull advantage o the resources available in the cloud, Hansen concludes. About Epicor Epicor Sotware Corporation drives business growth. We provide lexible, industry-speciic sotware that is designed around the needs o our manuacturing, distribution, retail, and service industry customers. ore than 40 years o experience with our customers unique business processes and operational requirements is built into every solution in the cloud, hosted, or on premises. With a deep understanding o your industry, Epicor solutions spur growth while managing complexity. The result is powerul solutions that ree your resources so you can grow your business. For more inormation, connect with Epicor or visit www.epicor.com. Contact us or more inormation on Epicor Products and Services +1.800.999.6995 ino@epicor.com www.epicor.com Corporate ice 804 Las Cimas Parkway Austin, TX 78746 USA Toll Free: +1.888.448.2636 Direct: +1.512.328.2300 Fax: +1.512.278.5590 Latin America and Caribbean Blvd. Antonio L. Rodriguez #1882 Int. 104 Plaza Central, Col. Santa aria onterrey, Nuevo Leon, CP 64650 exico Phone: +52.81.1551.7100 Fax: +52.81.1551.7117 Europe, iddle East and Arica No. 1 The Arena Downshire Way Bracknell, Berkshire RG12 1PU United Kingdom Phone: +44.1344.468468 Fax: +44.1344.468010 Asia 238A Thomson Road #23-06 Novena Square Tower A Singapore 307684 Singapore Phone: +65.6333.8121 Fax: +65.6333.8131 Australia and New Zealand Suite 2 Level 8, 100 Paciic Highway North Sydney, NSW 2060 Australia Phone: +61.2.9927.6200 Fax: +61.2.9927.6298 The contents o this document are or inormational purposes only and are subject to change without notice. Epicor Sotware Corporation makes no guarantee, representations or warranties with regard to the enclosed inormation and speciically disclaims, to the ull extent o the law, any applicable implied warranties, such as itness or a particular purpose, merchantability, satisactory quality or reasonable skill and care. This document and its contents, including the viewpoints, dates and unctional content expressed herein are believed to be accurate as o its date o publication, September 2014. The results represented in this testimonial may be unique to the particular user as each user s experience will vary. The usage o any Epicor sotware shall be pursuant to the applicable end user license agreement and the perormance o any consulting services by Epicor personnel shall be pursuant to applicable standard services terms and conditions. Usage o the solution(s) described in this document with other Epicor sotware or third party products may require the purchase o licenses or such other products. The results represented in this testimonial may be unique to the particular user as each user s experience will vary. Epicor, the Epicor logo [and (other Epicor product names)] are registered trademarks or trademarks o Epicor Sotware Corporation in the United States, certain other countries and/or the EU. All other trademarks mentioned are the property o their respective owners. Copyright 2014 Epicor Sotware Corporation. All rights reserved.