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"Sage provides business software, services and support to small and medium
sized businesses. Whilst our heritage is in the small business market we also have the experience and expertise
to meet the needs of specific industries and larger organisations."
Source : Sage
How to Choose a Manufacturing System
Manufacturing System is also known as:
MRP,
Production Planning,
Manufacturing Software,
Manufacturing Systems Integration ,
Planning and Scheduling,
Manufacturing executives,
lean manufacturing,
manufacturing engineering,
manufacturing process,
manufacturing facilities,
Manufacturing Industry,
Manufacturing design,
Manufacturing production,
Manufacturing automation,
Manufacturing integration.
Welcome! For more than 25 years Sage Software has been helping companies
across the globe choose and implement lasting software solutions. Of the
hundreds of thousands of companies who use Sage Software solutions, each one had
to decide which system to buy and when to buy it.
Our experience has taught us that people need more than just product
information; they also need other kinds of input to make sound accounting and
mamanufacturing software decisions. And that's what this booklet is all about.
We've distilled what we've learned from our many successful customers and have
structured it to deliver useful information to:
- People who are managing mamanufacturing manually and need to automate.
- People who are using entry-level software and want to move up.
- People who have old systems and are ready for new technology.
So why would a software company write a booklet that doesn't promote its own
products? Because we've discovered that the more people know about accounting
and mamanufacturing software, the more likely they are to choose products from
Sage Software and our partners. An informed customer usually ends up being our
customer, so we have a vested interest in sharing information with you.
Should Your Company Buy Mamanufacturing Software?
This simple test will tell you just how ready your company is to adopt a new
mamanufacturing system.
- Does your company currently use bills of
material?
- Yes. Go to question 2.
- No. Stop. Most mamanufacturing companies rely on
bills of material (BOMs) to track their material requirements. If you
answered "no" to this question, you probably aren't in the market for
mamanufacturing software; instead, a job shop package may be what you
need. Check with your local consultant for more information on available
job shop solutions.
- Does your company currently have some kind of mamanufacturing software in
place?
- Yes. Go to question 3.
- No. Stop. You face a serious competitive threat
from other companies that are reaping the benefits of mamanufacturing
systems. Read the rest of this guide and get started on an
implementation plan today.
- Has your company experienced huge growth or significantly altered
its lines of business in the last three years?
- Yes. Stop. Growth or other significant business
changes mean that you're outgrowing your current systems. If your growth
path is projected to continue, you need to consider new systems right
away to ensure that your current system does not become obsolete.
- No. Go to question 4.
- Does your mamanufacturing software integrate seamlessly with your
accounting software?
- Yes. Go to question 5.
- No. Go to question 7.
- Is your mamanufacturing software more than three years old?
- Yes. Go to question 6.
- No. Stop. If your integrated system was chosen
carefully within the last three years, it should be working just fine.
Before proceeding with a new purchase decision, discuss your situation
with the consultant who helped you implement your current system.
- Is there a satisfactory upgrade available from your current software
supplier?
- Yes. Stop. Contact your software vendor to find out
more about upgrading your system right away.
- No. Stop. You need to find a new supplier with a
more serious commitment to ongoing product development. Now is a good
time to take a look at the products available in today's market.
- Is your accounting software more than three years old?
- Yes. Go to question 8.
- No. Stop. Without complete integration of your
mamanufacturing and financial systems, you won't get the full benefits of
computerization. Blame and frustration will rule the day. Be sure to
consider only those packages that can demonstrate full integration.
- Is your mamanufacturing software an in-house package invented or developed
by your internal programming/IT staff?
- Yes. Stop. Your system was probably developed years
ago, before there were so many excellent software packages to choose
from. Upgrading your system now will eliminate the ongoing cost to
maintain customized software. As custom systems age, maintenance gets
more complicated and often more expensive. But be prepared for a little
extra effort, because your IT group may oppose a packaged solution that
wasn't developed internally.
- No. Stop. Your old accounting system and
nonintegrated mamanufacturing package are begging to be retired. The
benefits of harnessing new technology can pay big dividends. The earlier
you get started on an upgrade and conversion plan, the sooner you'll see
results.
Can You Afford to Buy?
Calculating Consulting Costs
Consulting fees will depend on the requirements of the implementation, local
pay scales, expertise, and more. It's impossible to predict exactly how long
your installation will take or how much it will cost. The list below gives
you some ranges to consider.
| Analysis of client needs |
8-20 hrs |
| Install network and applications |
5-30 hrs |
| Modify procedures for new system |
2-5 hrs/module |
Design chart of accounts customer
files, and vendor files |
10-20 hrs |
| Modify system reports |
10-25 hrs |
| Train clerical personnel |
10-30 hrs |
| Train system administrator |
10-20 hrs |
| Document modifications |
5-10hrs/module |
You may have additional
costs'and some savings'if your accounting and mamanufacturing systems are
already automated. Data conversion may cost more, but analysis and
training may cost less.
The benefits of implementing a mamanufacturing system are well-known and
well-documented. But it still may be difficult to persuade the management of
your company to part with hard-earned profits for the new system you're
proposing. Consider preparing a return on investment (ROI) analysis to help
your company decide how much to pay for the new system. Start by
categorizing your costs.
Software costs
These include software purchase or
lease, maintenance fees, and add-on products or packages required to adapt
the system to your needs. These costs range from about $7,500 to $100,000
for purchase, with annual maintenance costs starting at approximately 15
percent of the purchase price.
Hardware costs
These include computers,
components, networks, and printers. Costs can be difficult to project until
you make your software selection. You probably already have most of the
hardware you'll need, but you may need to upgrade servers or storage devices
to accommodate a new system. For each 25 users, plan on spending $7,000 to
$15,000 to upgrade existing equipment, and $50,000 to $65,000 to start from
scratch.
Consulting costs
You'll want an experienced consultant to help
you select and plan your system implementation. See page 9 for tips on
choosing a qualified consultant. Fees vary regionally and depend
substantially on your desire to "do it yourself" or to offload excess work to
an expert. Plan on 100 hours or more, with rates ranging from $90 to $180 per
hour.
A Tale of Two
Consultants
Let's take the case of a company that installed a new system
one year ago. They weren't very organized and they had lots of problems. They
were busy, so they didn't allocate enough time to do research before they
chose a product. They ended up choosing the first package they evaluated. It
was a relatively inexpensive software package and the consultant promised it
would run on their existing hardware. They subsequently spent $10,000 in
consulting fees trying to get it working. During this two-month process,
employees were taken off task and the company paid an additional $2,500 in
overtime. But the system just wasn't getting off the ground. After losing
$20,000 in unrecoverable expenses, they started over.
After more diligent
research, they selected a system costing $15,000. A new server and network
connection added $7,500 to their costs, and the consultant fees were $50,000
by the time the system was fully functional. While training costs added up to
$5,000, overtime needed during implementation was just $500 because their
consultant worked from an organized implementation plan.
With the system in
place, the company began to see changes. Inventory shrinkage nearly
disappeared from a previous rate of four percent, which saved this relatively
small company $55,000 in their first year. Two administrative people were
redeployed to other departments, saving $50,000, and overtime costs were
reduced by $15,000.
The purchasing department was resistant to the new
system and didn't start using it to its full extent for at least six months.
Still, at the end of a year, they had shaved a few percentage points off
their costs and saved $25,000 through bulk orders and reduced rush charges.
The company is still getting used to the system, so they aren't fully taking
advantage of all the features. And yet, their return on investment in a
single year has been more than 211 percent! Plus, their sales department
reports that they are winning more bids now that they have accurate
production cost information, enabling them to be more competitive.
Because
the second consultant did his homework, this company will continue to benefit
from new features and improvements in the software.
Overtime costs
During implementation, you and your staff will have
more work than usual. You may have to hire temporary employees to handle
some administrative tasks or ask for overtime from your employees. Plan on 10
to 20 extra hours per week per 25 employees served by the new system.
Training costs
You'll need training to get people up and running on the new
system. Good training is a logical investment in the success of the project
since it can save many hours of expensive backtracking. Training costs are
lower than ever, thanks to Internet "virtual" classrooms that reduce travel
time and fit education into busy schedules. Plan for training to take between
10 and 30 hours per employee.
If you're adding up
your costs right now, they may seem huge. But to complete your ROI
calculation, you'll also need to add up the savings your system will deliver.
Results vary dramatically from one company to another, depending on
objectives and work styles. But a good system will definitely deliver
significant cost savings.
Reduced inventory shrinkage
With the right
tracking and improved accountability, a good system can help you keep track
of inventory and prevent losses. As a result, more of your purchased
inventory ends up in final goods. If you're an average manufacturer, plan on
reducing shrinkage from your current rates to a rate of about one percent.
Reduced cost of goods through improved purchasing
With better forecasting,
you'll be able to plan your buying to avoid peak pricing, rush charges, and
small orders. Based on our customers' experiences, and depending on the
products you buy, component costs can be reduced by 10 percent or more, rush
charges can be cut as much as 90 percent, and shipping costs can be lowered
by 10 percent to 50 percent or more. Lower costs may also result in
improved payment history for your company's credit report.
Reduced labor
costs
With better scheduling and more accessible data, you'll need fewer
people to get the same work done. Often, a new system can dramatically reduce
administrative costs while bringing overtime labor into check through
improved schedules. Depending on the nature of the company and the current
rates of overtime, labor savings range from 5 percent to 50 percent.
Could
your company do better?
Calculate your own ROI by adding up your savings and
dividing it by your estimated costs. In our experience, most companies save
10 to 30 percent on inventory holding costs. You can make this quick ROI
calculation if you know the approximate value of your present inventory.
You may be amazed to learn that many companies find that a new mamanufacturing
system pays for itself in a matter of months.
Every Company is
Different
If you've worked for more than one mamanufacturing company, then
you already know that each one is different. Different processes, different
tracking systems, different problems'all of these variations add up to the
fact that you need a system tailored to your specific needs. Just 15 years
ago, you could reasonably take a look at every mamanufacturing solution out
there. Now there are so many available solutions that you could spend months
looking at demos and still not see it all. You can narrow your search for
a solution by defining your own company.
Light Assemblers
Light Assemblers
(or assembly manufacturers) create products by assembling or grouping
components purchased from other manufacturers. Light Assemblers have very
few requirements for extensive production scheduling or workflow management.
Discrete Manufacturers
Discrete manufacturers make the same product over
and over again. The discrete manufacturer depends heavily on forecasts to
purchase raw materials at the right time and cost.
Make-to-Order (MTO)
Manufacturers
These manufacturers respond to customer demands by producing
entirely new products, or significant modifications to standard products. In
this environment, accurate product definition and costing are important
objectives.
Job Shop Manufacturers
These manufacturers rarely make the
same objects over again. The job shop manufacturer will assign material
costs and labor costs on a project-by-project basis without much repetition.
Process Manufacturers
These companies produce batches and typically
involve mixtures and chemical processes that make estimating required
materials and finished goods somewhat complex. They may produce the same
product over and over again or they may mix custom batches on a project
basis.
| Mamanufacturing Needs by Company Type |
|
Light Assembly |
Discrete |
MTO |
Job Shop |
Process |
| Bills of material |
x |
x |
x |
* |
x |
| Component allocation |
|
x |
x |
* |
x |
| Work orders |
|
x |
x |
x |
x |
| Material Requirement Planning (MRP I) |
|
x |
x |
x |
x |
| Light assembly |
x |
x |
|
|
|
| Kitting |
x |
x |
x |
|
|
| Routing |
|
x |
x |
x |
x |
| Mamanufacturing Resource Planning (MRP II) |
|
x |
x |
x |
x |
| Project accounting |
|
|
x |
x |
|
| Cycle counting |
x |
x |
x |
x |
x |
| Serial / Lot tracking |
x |
x |
x |
|
x |
| Bin tracking |
|
x |
x |
|
x |
*This
depends on the nature of your business. While some job shop manufacturers will
need these features, others will not.
Questions to Ask Your Software Supplier
Four
Mistakes People Make When They Buy Mamanufacturing Software
- Not
doing their homework You're already a step ahead of most people because
you're reading this booklet. Most people don't have their objectives in
hand before they buy.
- Misunderstanding the benefits of automation
Computers do not replace intelligence, judgment, hard work or productive
employees.
- Ignoring hard-to-quantify benefits It's hard to calculate
your future gains due to good decisions made from information the system
provides. But results can be dramatic.
- Passing the buck Top
management must be involved in the choosing and implementation of the
system. A consultant's output is based on the quality of the input.
As you narrow the field of
software contenders, you'll begin examining the companies more closely to
see how well they meet your needs. Consider asking these questions to weed
out suppliers that won't fit with a long-term strategy for mamanufacturing
excellence.
Are the standard accounting modules available for this
package?
Look for General Ledger, Accounts Payable, Accounts Receivable,
Purchase Orders, Sales Orders, and a very strong Inventory Control module
as a minimum set. You may also want to ask each perspective supplier about
the availability of additional modules such as Payroll, Fixed Assets, or
other vertical modules.
Which mamanufacturing modules are available?
Light Assemblers should look for a product that offers features like BOMs,
sales kits, and product configuration. Discrete manufacturers should look for
Material Requirement Planning (MRP I) and Mamanufacturing Resource Planning
(MRP II) in addition to support for BOMs. Make-to-Order and Job Shop
manufacturers will likely need all of these features plus a method for
estimating and tracking costs on a project-by-project basis.
Do the
accounting and mamanufacturing modules integrate completely?
This is a
tough question to answer. Just because the modules come from the same
company doesn't mean they work together. The accounting company may have
acquired the mamanufacturing modules from another company, and they may not
integrate smoothly. Alternatively, just because the modules come from two
different companies doesn't mean they won't integrate fully. Some
accounting software companies provide open source code and programming
standards for developers of add-on modules to follow. Seeing a product
demo may be your only way of assessing the level of integration. Check to
see that Bills of Material and Mamanufacturing Orders have solid integration
with Inventory Control and Sales Orders. You should be able to maintain
inventory items while defining BOMs, and configure orders based on BOMs
during order entry.
How does the system handle data collection?
You
will need to consider how well a system monitors your critical work areas.
Can you monitor production if you're running at 100 percent capacity for
your staff? Has inventory actually been received, and if so, are the
counts reliable enough to forecast material requirements? Data collection
ties into true mamanufacturing as well as accounting. How well you collect
vital data determines your ability to forecast production information. Data
collection is an important part of the total solution for a company that
requires MRP II.
What key features set this product apart from others?
Before you tell the software supplier much about your business, find out
what they think their product strengths are. You'll get a good feel for
whether or not they design products for companies like yours.
What is the R&D budget for the software supplier as a percentage of sales?
A company that's not putting at least 10 percent of sales revenue back into
product development can't possibly keep pace with technology. You want to buy
software from a supplier that's serious about having great products today and
tomorrow.
Does the supplier offer frequent updates and an upgrade path?
Good software suppliers update their software frequently, making new features
and bug fixes available to resellers and customers. Software is one of the
few industries where you can upgrade your product to the newest, hottest
version for a fraction of the full price. Imagine being able to go to a car
dealership and have all the features of this year's model added to your
existing car! With most products you have to buy an entirely new model or do
without. A good software publisher will provide frequent upgrades at
reasonable prices.
Is software maintenance available?
Before you make a
purchase, find out if your software publisher has a maintenance program in
place that gives you access to frequent updates. For a reasonable price,
usually about 15 to 20 percent of the purchase cost, you should be able to
get an annual maintenance contract that provides a continuous stream of
product updates and improvements. This demonstrates that the developer has an
ongoing commitment to the product and to your satisfaction.
Does the
system have the capacity to grow?
If you're not sure how well a system
will accommodate your company's needs as you grow, here are some key
questions to help you find out. What are the maximum number of customers,
vendors, BOMs, or inventory items that are allowed? What is the maximum
number of users that can be working with a particular application at the same
time? Can the software be customized to meet the changing needs of a growing
company?
What kinds of reports does the system provide?
Your system
must be able to extract relevant information easily. A system using database
files provides virtually unlimited reporting capabilities. Ask for samples
of reports to see the system's reporting capability. In addition to standard
reports, the product should allow non-programmers to design custom reports
using industry-standard reporting tools.
Is the system easy to use?
Many
buyers spend far too little time evaluating this aspect of the software. Yet
ease-of-use will have a dramatic impact on the quality of your
implementation. Poorly designed software leads to frustrated users who bypass
the system or resort to manual short-cuts. If you want a system that delivers
maximum productivity, focus on how easily your employees can use it.
You
want a system that lets you enter information quickly and efficiently. Look
for features such as full screen editing, embedded help systems, and clear
prompts. It is important to ensure that production data entry (particularly
in sales orders and purchase orders) does not require excessive mouse use. If
the operator's hand must constantly move between the keyboard and the
mouse, data entry can be too time-consuming.
You should also make sure the
system can handle all the situations that will come up on a day-to-day
basis. Is the sequence of steps to create a sales order simple and
straightforward? Can you look up vendor information while you are in the
middle of posting a line item on an invoice or purchase order? Can you
search the item master file while you are creating a new mamanufacturing order?
Can you add inventory items while you are in the middle of creating a
mamanufacturing order?
How does the system handle data validation?
Electronic Commerce
While many companies are examining their Internet
sales strategies, many are overlooking the roles that accounting,
mamanufacturing, and distribution play in this market revolution. Ideally,
your accounting and mamanufacturing software should be ready for electronic
commerce even if your company isn't. Here's what to look for:
- A complete
solution that seamlessly integrates accounting, mamanufacturing, and
Web-based activities in real time.
- E-mail integration so you can begin
sending invoices, notifications, and confirmations electronically.
- The
ability to publish any accounting or production reports in HTML (the
standard Internet format) for publication on the Internet, or more
importantly, for internal distribution on your corporate intranet. Many
companies no longer distribute paper reports to managers.
- The ability to
execute payment electronically for payroll or accounts payable. You'll see
lower error rates, more control, and lower transaction costs.
- An
interface to capture leads from the Internet and automatically convert
them to customer records as well as to process Electronic Data Interchange
(EDI) with trading partners. Don't waste time on duplicate data entry of
electronic leads and transactions.
- Customer self-service capabilities to
give customers access to their order status through your Web site.
This capability dictates how well the program prevents mistakes from
getting into your system. The program should test for errors such as
duplicate customers and vendors, incorrect item numbers, and unreasonable
amounts and dates. Your system should notify the operator of unusually
high quantities or unit prices for certain types of items and offer valid
choices along with the notification message.
What kind of documentation
is supplied?
The quantity and quality of documentation is an excellent
guide to the quality of the software. Look for software suppliers who
offer other support materials such as CD-ROMs, tutorials, training guides,
videos, and technical reference manuals in addition to basic
documentation. Clear, accurate, and useful documentation takes time to
produce. Software companies that have a long-term commitment to their users
tend to develop and provide outstanding documentation.
What kind of
training is available?
As knowledgeable as your reseller may be, nobody
knows more about how the software works and how to implement it in your
plant than the people who wrote it. Ask whether there is a formal training
course available for you and your staff.
What kind of security does the
system offer?
The degree to which sensitive functions and reports can be
safeguarded through a password protection capability will affect how the
program rates in security. Ideally, you should be able to specify which
operations can be performed by specific users at specific times. With a
good system, you should be able to set it up so that your assembly
technician cannot see costs on the BOMs, but your production staff can.
How many people currently use this product?
If the company you're buying
from has already sold many units, they're probably doing something right.
People vote with their checkbooks, and it's a good idea to give a popular
product a serious look. A large install base is like an insurance policy for
users. You can be sure that the product has stood the test of time,
satisfied companies similar to your own, and delivered good value. A large
install base also generates additional products for you. If the product is
popular, you'll find add-on software, worthwhile utilities, a training
schedule with convenient dates and locations, and a large number of local
dealers who can work with you.
Don't buy futures!
A salesperson's
promise of future releases is sometimes not grounded in reality. Make sure
the software you're buying has the features you need today.
Questions to Ask Your Consultant
Consultants have special expertise'they've
been through the process many times before and can help you save time and
effort. A consultant can help you choose your software, install any needed
networks or hardware, and help ensure the system is up and running by your
target date.
Your ideal consultant is someone who has installed
mamanufacturing systems at businesses similar to yours. You will benefit
substantially from their expertise. A mamanufacturing software company can
recommend resellers in your area who have worked with companies like
yours. You can also find good consultants through referrals at your
professional club or organization'ask colleagues to share their experiences.
Has the consultant installed mamanufacturing software at companies similar to
yours?
Ask about company size, number of employees, and nature of the
business.
Will the consultant provide references?
Ask for contact names so
you can call these customers and learn about their implementations.
Can
the consultant provide a free trial version of the software?
While a
software demonstration can be helpful when you're in the process of
evaluating your options, what you really need to see goes deeper than what
50 minutes of bells and whistles will show you. Trial software allows you to
enter your own data and explore the features of the program. This is a
limited use of the software and does require some effort on your part to
investigate the product's capabilities.
How are the consultant's fees
structured?
Find out up front how your consultant handles hours, services,
and billing. (See page 3 for more on figuring consulting costs).
Can the
consultant provide a complete service package?
As part of your
implementation, you'll need training, technical support, and many other
services. Look for a reseller who will work with you from start to finish.
You don't want someone whose only focus is on selling software.
What are
the costs involved with adding more users or adding more modules for
existing users?
When you're running price comparisons, dig a little deeper
than initial cost. In addition to considering maintenance and upgrade support
and costs, think about how much you'll pay to add on more users. Some
packages charge you less than other packages for all modules but gouge you in
the cost per number of users, while other companies are relatively
inexpensive when it comes to adding seats but charge quite a bit for
additional modules.
Who is responsible for technical support?
At some
point you will need technical support for your new system. Will you call the
software manufacturer or the consultant? How much will technical support
cost? Find out what the policies are for maintenance, upgrades, and support.
Get clear definitions up front. Ask your consultant what you can expect in
support turnaround times. Some suppliers allow you to control your
turnaround time by purchasing a support upgrade package.
Does the
consultant listen effectively?
This question separates the true sales
consultants from the peddlers. A true professional will not make
recommendations for you without learning about your business and your
objectives.
Does the consultant communicate clearly?
Avoid resellers who
try to impress you with jargon and who immediately start talking about
equipment and program features. Your focus during the interview should be
on what applications the consultant can provide and how he or she can help
you benefit from them'not on details.
Do you think you can work with the
consultant?
You'll be working with the consultant over a period of weeks.
You may even end up with a long-term relationship if the consultant helps
change and extend your system as your company grows. Choose a consultant
who is a good fit with your company's philosophy and culture. Trust your
instincts if you don't feel right about the consultant. You need someone
with whom you feel comfortable.
Questions to Ask Your Company
One Low Cost
Option: Hosted Application Services
Application Service Providers (ASPs)
host software applications on their servers and rent them to their
customers over the Internet.
What are the benefits of using an ASP?
An ASP
can give you high-end business solutions at a fraction of what it would cost
you to purchase hardware and software, implement a network infrastructure,
and maintain and upgrade these complex systems.
What should I look for in
an ASP?
- First-rate solutions and superior levels of customer service and
support.
- State-of-the-art software, hardware, and network
infrastructure.
- An advanced system for data protection, backup, and
recovery.
- Proactive detection of malicious code, viruses, and system
intrusion.
- Service level agreements that clearly specify the levels of
performance, consistency, and availability.
- Flexible subscription
service'monthly, one-year, and two-year agreements.
- 24 / 7 customer
support, technical support, regular maintenance and upgrades, and full backup
and recovery capabilities.
Look for an ASP that can provide your business
with infrastructure management and systems monitoring of your
mission-critical applications. An effective ASP agreement will eliminate
initial IT capital expenditures and lower your recruiting and training costs,
thereby significantly reducing your total cost of ownership.
There's
never a great time to disrupt your business by implementing a new system. But
if everyone's on board with the idea of change, you'll find smoother sailing
as you get the system up and running. Consultants often complain that
companies want a new system but don't want to put in any effort to achieve
the goal. Even the best, most capable consultant with the most sophisticated
software will still need sincere effort from you and your staff if the
project is going to be a success.
Are you willing to accept change?
How
well will your engineering group take to a system that was created elsewhere,
especially if you have been relying on your own proprietary system? You'll
need buy-in, and you'll need to understand how well your new system will
integrate into, or work with, any development tools they're already using.
Is someone in charge of each phase of the project?
Consultants can't carry
the entire load themselves when it comes to implementation. You'll need to
assign a project champion from the top ranks (usually the CFO, CIO, or
Mamanufacturing VP), and a project leader from middle management. You may need
to restructure work priorities during the selection and implementation phases
to make sure your project leader has the bandwidth to get things done.
Is source code a worthwhile investment?
Some people need source code and some
do not. If you have a staff of in-house programmers and anticipate making
extensive changes to the software, then be careful to choose a company that
makes source code available. On the other hand, if your application is fairly
standard and you need to be able to upgrade your software easily and
inexpensively, then you should not pay for source code.
Six
Reasons Why New Mamanufacturing Systems Fail
- A faulty inventory item
numbering scheme
Consider a company that has two sources for chips.
Even though each supplier has its own part number for the item, the company
didn't map out its own part numbering scheme properly. As a result, the
item appears to be out of stock even though there are still chips on hand
from the other supplier. There's a right and a wrong way to set up inventory
control when you have more than one supplier. If the program you're using
doesn't have multiple supplier capabilities, you won't be able to properly
set up Inventory Control to reflect this. Make sure the system you are
considering maintains a cross-reference between your internal part number and
each supplier's part number.
- Insufficient control of content for bills
of material
Every BOM needs to be entered correctly from the start, based
on specifications received from engineering. Even if the BOM has all of the
right components in theory, sometimes in practice quantities aren't
exactly what they need to be and then people on the shop floor start to
personalize as they assemble. It's critical that engineering and
mamanufacturing communicate effectively over the correct structure of BOMs and
that only qualified people are keeping BOMs up-to-date. Regardless of the
size of your mamanufacturing operation, a robust security system will restrict
unqualified people from using certain critical functions of the software.
- Inaccurate inventory on hand
One of the benefits of an integrated solution
is that you eliminate redundancies in your system. One of the drawbacks is
that errors can be compounded. If your inventory on hand is miscounted
from the start, the error will repeat itself throughout your system. And the
last thing you want is to be forced to close down for several days to do a
physical inventory in order to identify discrepancies and reset your on-hand
quantities. Mamanufacturing systems that offer net-change physical inventory
functions will make it easy to correct stock counts without having to halt
production activities.
- Lack of agreement between engineering and
mamanufacturing
Before implementing any system, it is absolutely essential
that you reach an agreement between engineering and mamanufacturing on your
goals and how you're going to get there. It doesn't matter how
sophisticated your software is if you don't have appropriate buy-in from
these two departments. Work with your consultant to develop a thorough
implementation plan. Make sure everyone in engineering, mamanufacturing, and
management signs off on the plan before you begin installing software.
- Unrealistic expectations of what the system will be able to accomplish
Know exactly what you want to accomplish with your new system. You wouldn't
buy a Chevrolet to travel 200 m.p.h., nor would it make sense to pay a lot
of money for a Lamborghini just to keep it in the driveway. Buying
functionality you won't ever need is just a waste of money. Make a careful
list of the functionality you really need, adding a few of those "would be
nice" items. Award major points to mamanufacturing systems that have a
built-in
growth path, especially if you can test-drive advanced functions using your
own familiar data.
- Failure to determine the company's needs in
accounting, mamanufacturing, engineering, and data collection
It is vital
that you spend time thoroughly evaluating your company's needs before
choosing and installing any system. Get a complete review of the
requirements in accounting, mamanufacturing, engineering, and data collection.
This is a mandatory step in the process'and one that cannot be skipped.
Doing your homework in the planning stages will pay off ten-fold when it's
time to connect all the pieces. Ask your reseller if consultation and
training is available directly from the software supplier.
About Sage
Software
Sage Software has been responding to the needs, challenges, and
dreams of small and midsized businesses for over 25 years. With a complete
range of business management solutions and services, Sage Software helps
companies improve customer relationships, reduce costs, and automate and
integrate a variety of operational activities. Its solutions support the
specialty needs of a broad scope of industry segments, including
mamanufacturing, distribution, construction, real estate, nonprofit, and
professional services.
Sage Accpac International, Inc.
6700 Koll
Center Parkway
Third Floor
Pleasanton, CA 94566
925-461-2625
800-873-7282
www.sagesoftware.com