At some point every business probably feels a bit undervalued or unappreciated by customers or maybe by the markets. This may or may not be justified, but we’ve all been there. Over the years we have gained a deep understanding and appreciation for one group of businesses in particular that might feel this way – manufacturers.
There is tremendous complexity in the manufacturing business model of sourcing parts, labor and materials, making something out of that and then selling and servicing that product. Then there are also government regulations and customer compliance requirements to factor in. There are highly complex software applications that help keep the cost of that seemingly simple widget at $2.00. It’s really not so simple.
It starts with design, which generates drawings and a parts list. Bids for the parts are generated. The parts and materials all need to be ordered and tracked to the manufacturing facility from sources all over the world. Proof of non-toxic materials, approved points of origin and other documentation all need to be collected on every component and every source. Then it all must be assembled or made using labor and machines that need to be scheduled and prepared. Finally, the product is packaged, shipped and invoiced.
While this is the simplified version of a very complex process, you can get a little appreciation of what it takes to create that $2.00 widget and how many they need to sell to recoup the costs. To help manufacturers manage this process there are enterprise resource planning tools or ERP’s. These are complex software applications to keep track of the materials, process and labor. These are data driven applications geared towards smart planning and processing.
Despite having a software application to help manage the data, the volume of supporting documentation is astounding. Drawings, bills of lading, shipping receipts, customs documentation, parts lists, content certifications and many other forms of documentation are in paper form, faxes, emails and downloads. In addition to the ERP, a workflow and document management solution is needed to help this complex process run smoothly and to ensure all participants have the complete picture.
Current technology has certainly made the ERP and document management solutions better, easier to use and more affordable. These tools allow manufacturers and their employees to keep up with the business complexities and stay competitive. Business owners of all types, especially manufacturers, congratulate yourselves on a not so simple job well done!