Alastair Thom discusses the importance of investing in a business’s back office.
The investment focus of all manufacturers tends to be on shop floor improvements – generally improving your end product, or the efficiency at which you produce it.
You shouldn’t ignore your back-office systems when considering internal investment however; as investment here could provide significant value to your business.
There are efficiencies to be made in your back-office. Time, and therefore money, can just as easily be saved here as on the shop-floor.
Significant saving could be made on the accounts payable process – certain modern ERP systems allow this to be almost entirely automated, with a scanning and OCR service that largely removes the need of any manual intervention.
Similarly an ERP system with Shop Floor Data Capture would again save significant time and effort by removing the need to manually enter timesheets.
Component traceability tends to be a modern requirement for many manufacturers and can generally be achieved with a manual spreadsheet or paper-based process.
Querying this information can be laborious however; whereas an ERP system with batch and serial number traceability would provide this information at the push of a button.
Saving time saves money – irrespective of where.
Speed and accuracy of data
Accurate, reliable and timely information is vital to effective decision making. It’s important to know the exact cost of your manufactured product; including wasted components, absorption of general overheads, and actual – rather than estimated – production time and cost.
It’s difficult to make effective production decisions without an insight into bottlenecks in production; knowing when orders are going to be completed late; and what the impact on completion times would be of adding/losing some resources.
A manufacturing accounting system with a capacity planning tool would put this information at your fingertips.
The quality of your back-office systems can have a direct impact on your customers – both in the general image you portray; and in the general ease of their purchasing process.
Exact for Manufacturing can help provide full control over production by introducing lean manufacturing where everything is automated.
Learn more: www.exact.com/uk
Thom Micro Systems Ltd
Investment in a modern back-office system could make it easier for your customers to place an order with you via integration with a web shop or acceptance of EDI orders; and can provide your customers with professional looking order documentation throughout the process.
For job shops, the ability to quickly and accurately provide professional looking estimates may be key; which again should be easy to produce in an ERP system with an estimating module.
Your back-office system can play a major part in your customer interaction; and although obviously of minor importance compared to the quality of your product; a well-chosen ERP system can allow you to impress at all touch points with the customer.
Investing in a new ERP system is unlikely to bring about the same ‘headline’ change as investing in new machinery.
Doing so, however, can provide genuine value; and given the comparatively low cost it’s quite possible you’ll obtain a better ROI than a larger, shop floor investment.
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