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dms_keeping_WPIn our prior post we looked at the basics of RFID as a possible tool in data (or inventory) management as applies to a shop floor environment.  Given the pros and cons of RFID (the cons mostly falling into the cost category), let’s turn our attention to barcoding technology next.

Again, we’re borrowing from our friends at DMS whose white paper on the subject is found here.

In terms of cost (as in low), complexity (as in simple) and universal acceptance (in manufacturing, it really is everywhere)… you can’t beat barcode technology.  More varieties (2-D, 3-D) are becoming available, and they’ve long been available in a number of different (usually industry-driven) “symbologies.”  Increasingly too, more and more data can be packed onto a barcode label.

In addition, most ERP systems have at least some form or rudimentary barcode capability or recognition built in, or at least, easily integrated.  As well, there are many available hardware and software options, thus keeping costs manageable.  This extends to handhelds as well which, while not “cheap” are certainly cost effective, and pack a lot of technology into a small and efficient footprint.

Barcodes can come in the form of labels, stamps, tags, Teflon-coated (dirt-resistant), large format (for higher shelves, say) and small format (in-line scanning), polyester tags, high-temperature resistant tags, and more.  Newer technologies involving data matrix layouts permit more data to be stored in the tag than ever before.

So… when it comes down it, which do you choose, RFID or barcode?

A number of studies have been conducted on the topic, and one out of the Univ. of Western England concluded “… while RFID can deliver improved operational performance over traditional barcode systems, it is found to be less reliable in implementation.”  Studies have found that while processing times with RFID can be quicker, they were less consistent, and that RFID produced higher error rates.  And given RFID’s higher costs and technology requirements, barcode still appears to be, as the DMS white paper describes it, “the most practical and accessible way to automate warehouse and industrial processes.”

While both technologies have seen gains since the study, barcode remains the “ubiquitous international standard for product tracking.”

As DMS notes, regardless of what technology you choose, the benefits can be very significant in key areas like:

  • Rejection and rework
  • Processing times
  • Entry errors
  • Manufacturing costs
  • Sales per employee

In our next post, we’ll take a look at the benefits of using barcode in inventory management.

Finally, we’ll conclude in our final post in this 5-part series with some thoughts on practical matters like where to barcode, and expected payback periods.  Stay tuned…

 

dms_keeping_WPWe’re picking up from our intro, last post, to talk today about data collection systems…  Our post is based on some sound points made by our friends at DMS in a white paper found here.

Even companies with electronic data management systems still record a lot of physical transactions on paper.  Sometimes it’s almost unavoidable.  Handwritten receipts… parts issued to jobs… shop floor travelers… vouchers… shipping documents, etc.  Eventually, most of these need to be translated into the firm’s electronic realm.   Too often, however, the document is lost, or delayed when found, or improperly recorded (typos, number errors, etc.).

There is a cascading effect to this.  When a picker pulls something from inventory improperly or without recording it, the system’s inventory levels will show more stock than is physically there.  Even once the problem is recognized, it typically involves pulling someone away from their regular job and correcting the mistake.  Productivity is reduced if this happens often, with a corresponding effect on margins.  And if the problem is not recognized, the results can be worse: unfulfilled production or customer promises, bad delivery quotes, expedited shipments, and so on.

It’s been said that a 10% degradation in on-time delivery results in a 1% market share loss.

The point is: recording transactions on paper is a highly volatile and potentially destructive practice.  In most cases we find the effects are actually far worse – once they’re actually measured – than clients ever know.  In other words, the damage is even worse than you probably expected.

Here’s where our friends at DMS make a key point, and where the introduction of data collection (barcode and RFID technologies) begins to come into play.  First, break your processes down to the simplest, most common sense components.  “Applying lean principles to a paper system ensures that, prior to implementing an electronic solution, your processes are completely streamlined.”   Capture your data at the point of physical transaction.  It’s the first step to reducing delays and lost information.  After that, it’s time to look into automating the collection process.

Two key technologies exist in the shop floor data management arena: RFID and Barcode.  We’ll take a brief look at RFID first.

RFID (Radio Frequency Identification) technology uses small “tags” that contain unique information that describe whatever it is they may be attached to.  They share this information wirelessly (most typically have tiny antennae build into them) with computers, networks and databases.  Multiple RFID tags can be read simultaneously, for fast operation.  A tag could identify a single item, or if applied to a pallet can identify the entire contents of that pallet, or skid, or even a full truckload.

RFID works especially well in high-value, as well as high-volume environments.  It’s great when real-time visibility is crucial.  However, RFID tags are still relatively expensive for tracking inventory.  They generate a lot of data, which can sometimes cause confusion when trying to obtain succinct information.   We’ll continue next post with a comparison to barcode and what makes sense where.  Stay tuned…

 

 

dms_keeping_WP

Today we start a five-part post on data collection and barcode, for those interested in the basic What, Why and How of data collection.

Our friends at Dynamic Manufacturing Solutions (DMS) in Canada, (a provider of add-on products for Microsoft Dynamics NAV ERP systems with whom our firm partners) recently created an informative white paper that nicely highlights some of the opportunities and advantages inherent in the application of “mobile technologies” including barcoding and RFID.  We thought we’d reprise a few highlights for our readers in our next series of posts.

Their white paper, entitled “Keeping the Physical World and Virtual World in Sync: Improving Efficiency with Barcode Technology“ can be downloaded here, by the way.

The whole topic of “data management” has become crucial to business today.  In the manufacturing and distribution environments, data that is well managed can become a key competitive advantage.  Properly implemented, shop floor data collection systems can dramatically improve order accuracy and inventory visibility while reducing shipping and billing errors.  In the long run, companies that make mistakes lose market share, plain and simple.  Automated data collection systems remove this obstacle, when properly implemented.

Our own experience implementing these systems over the past decade or more reinforces this point.  On the other hand, poor data management can result in a host of bad results.  DMS points out a few:

  • Inventory Overstock
  • Expedited Purchases (rushed, last-minute order fulfillment usually in a panic)
  • Lower Than Expected Margins or Lost Receivables
  • Decreased Shop Productivity
  • Increased Office Overhead
  • Poor Customer Service

Shop floor data collection solves these problems with typically rapid ROI and cost recapture.  Today’s systems are relatively inexpensive, very cost effective, and have short payback periods.

But we always caution our clients up front: Can you define exactly WHAT you want from barcode?  Can you define WHERE it will be applied?  Where will it make your operation more efficient?  It becomes critical to implement the system that, as DMS puts it “accurately reflects your business processes to ensure you receive the most from your productivity investment.”

We’ll get into the Hows and Whats starting with our next post.  Stay tuned…

 

trends picIn recent articles on topics including the Internet of Things and Big Data, we’ve talked about technology’s increasing impact in business, particularly in manufacturing.  A recent blog post by Brian Oulton, an Industrial Director of Marketing at Belden, Inc. a century old producer of industrial products that include networking, IT and connectivity under a variety of brand names, discusses 4 of the biggest trends, and what to do about them.

Oulton’s “big trends” encompass topics we parsed before, but his ‘What To Do About Them’ comments are worth passing along.  In his view, the four big trends that manufacturers need to be aware of are: Internet of Things (IoT), Big Data, Cloud Computing and Industry 4.0.

As would befit a supplier of industrial networks, Oulton’s first recommended step is to make sure your own network is up to snuff, or as he puts it: “make sure your network is well-designed and that it lets you scale-up dramatically, easily and reliably.”  Of course.

But it’s his ‘brainstorming’ that’s worth giving a listen.  For example, on the subject of “Big Data”: You may already be collecting lots of data, but struggling to understand it, thus making it hard to act upon.  If you had it at your fingertips, what would you do with it?  Suggests Oulton:

“Could it be used to provide super customized products for customers, based on market trends and sales / demand data? Or, what if you could share trend and other data in real-time, directly with customers, have them decide what they want made, then make it and delivery it really fast?

What if algorithms could be applied to big data that would allow you to smooth out production? What benefits would that give you?

Big data can be used to accelerate business by quickly matching production with demand. What do you dream about being able to do in this area?”

On today’s so-called Internet of Things (interconnectivity across machines, sensors and appliances):

“This is about having information from disparate sources, some of which are in the factory and some of which are outside of it, available at your fingertips.

For example, let’s say you have trouble with a machine. Imagine that you could troubleshoot the problem using data not just from sensors, actuators, PLCs, etc. but also from drawings, videos and help text. Now add in information from patches and updates from the Internet, plus voice and video connections with the machine building company and other remote resources.

Now what other problems could be solved faster by being able to bring together a wide variety of information quickly?”

As to cloud computing and storage, Oulton suggests:

“With information available anywhere anytime, what advantages can you gain from that? Does it enable closer collaboration between different facilities? Can it connect you closer to your customers?”

Give Mr. Oulton credit for framing the questions companies today could be asking themselves – once they have the underlying infrastructure to warrant asking them.  In doing so, he’s framing the questions that are really at the heart of the future of manufacturing.

Read his full post here for further information.

 

manufacturing comeback picThe Boston Consulting Group recently published the results of an extensive review of manufacturing costs across the 25 countries that together produce 90% of the world’s manufacturing exports.  What they found may surprise you, especially with respect to the assumedly high cost of manufacturing in the U.S.

Partners at BCG compiled the report, entitled “The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback” and its title speaks to the team’s findings.

While many probably think of China as the world’s low cost producer, and the U.S. as among the highest, the data don’t actually support that assumption.  Using what BCG called their Global Manufacturing Cost-Competiveness Index, they determined that when “the most important cost factors are considered – such as total labor costs, energy, productivity growth and currency exchange rates,” some countries previously thought of as low-cost producers, like Brazil for one, are actually among the highest.

In fact, their study found that the lowest cost producer, perhaps not surprisingly was Indonesia.  Ranked second was India, followed in third-place by Mexico, then Thailand and in fifth place, China.  Ranked no. 6 was Taiwan but then (drum roll please…) they found that the seventh-ranked low-cost manufacturing producer in the world was… the United States.

Specifically, the study’s authors found a convergence in manufacturing costs between the U.S. and China “due primarily to the combination of rising labor costs in China and higher productivity levels and lower energy costs in the United States.”

The most expensive exporters?  Look mostly to Europe.  The countries with the highest manufacturing costs, ranked from the bottom, were: Australia, Switzerland, Brazil, France, Italy and Belgium.  All had costs 20% to 30% higher than the U.S.

At the same time, the nations of Brazil, China, Czech Republic, Poland and Russia all experienced significant increases in manufacturing costs over the last decade.  Wage increases, lagging productivity, currency swings and high energy cost increases were largely to blame.

And finally, in one of the report’s most heartening conclusions – as far as U.S. manufacturing fans are concerned – they found that two countries showed the greatest gains in manufacturing competitiveness: the United States and Mexico.  The key reasons: stable wage growth, sustained productivity gains, steady exchange rates and the recent shale-gas energy boom.

The BCG report provides yet more evidence that manufacturing in the U.S. is alive, well, and even surging, relative to most of the rest of the exporting nations of the world.  That’s welcome news indeed to those who earn their living in manufacturing either directly or (like us) indirectly.  Now one can only hope that policy makers will understand the causes, effects and policy-making implications of this surge.  We’ve come back from crisis-level industrial shocks – let’s not waste the crisis.

business process automation picOccasionally we run across articles in industry trade rags that have little to do with ERP, but still manage to enlighten.  Recently, an article by Seth Robinson, Director of Technology Analysis for CompTIA, in PC industry periodical Channel Pro — which bills itself as “the insider’s guide to SMB” — revealed the results of a 2014 industry survey conducted by CompTIA, in a study on workflow automation and communications.  (CompTIA is basically a trade association for computer dealers.)

In it, the author pointed out that “there is no single product that can be purchased and implemented to give a company automation of a wide range of processes.  Instead, they noted, it requires a strategic approach that involves three primary components:

  • Software used for discrete functions (like invoicing or payroll)
  • Connections between applications to start and end workflow and pass work from one stage to another
  • A central repository for data

Actually, in many cases, this pretty well defines ERP if you throw in some hardware / networking / storage.   The article goes on to point out how too often information is too widely dispersed, held in separate silos, inaccessible to some… all the tropes typically applied to the dysfunction that companies are trying to rectify through ERP in the first place.  Often, they note, the technology is piecemeal, or companies lack the skills to execute an automation strategy.

So, CompTIA interviewed a few dozen companies, to identify those areas where they most hoped to see workflow improvements.  Their conclusions:

  • Nearly 50% of companies wanted to automate their workflow (translation: applied ERP) to eliminate “bottlenecks that slow things down”
  • Nearly as many do so in order to eliminate “duplication of work”
  • Nearly 40% to fix poor “interaction between departments”
  • A third were out to fix the problem of “locating documents”
  • And over a fourth lacked “business process visibility”

Proof once again that everyone wants the benefits attached to today’s ERP systems and the services that go around them, regardless of what they call it.  Relatively few know how to make it happen.

 

 

 

erp success picAs we move officially into the second half of this year (wow… how’d that happen?!), we return today to some timely comments about ERP…

Panorama Consulting Solutions in Denver, through their blog and articles, often convey opinions and survey results about Enterprise Resource Planning (ERP) software solutions.  As often as not, we find ourselves concurring with many of their conclusions – after all, we’re pretty much in the same business, and after over 25 years of doing this, we’ve seen many of the same types of successes and failures.

Recently, President Eric Kimberling parsed his thoughts about just what constitutes ERP success.

On the one hand, he noted, too often “success” mean that, well, basically, ‘we survived the project.’  Or, some executive considered their ERP project a success because no one lost their job – or at least he didn’t. Or maybe they didn’t screw up the company’s operations.  It may simply be a preservation tactic since, as Kimberling put it, “no one wants to admit to overseeing a failure.”

Admittedly, ERP implementations are fraught with complexity, and the bar may be set low to acknowledge these facts.  Kimberling cites the fact, apparently the result of his firm’s frequent surveys, that the average $100 million company recoups about $1 million in tangible business benefits per year from its implementation.  Unfortunately, that’s about $2 million less than they anticipated, or about $20 million over the useful life of their system.

How can a company avoid a similar fate?  According to Kimberling, it should…

“Start with  a measurable business case that is used to manage business benefits – not just thrown on the shelf after justifying the project. The business case should be very tangible, specific, realistic and actionable to ensure that various stakeholders in the organization can be held accountable for achieving those results.”

Their second key piece of advice…

“Engage in business process re-engineering, rather than the “paving the cowpaths” approach that most organizations take. This means ensuring that you have adequate time built into your project plan to identify and implement significant operational improvements.”

Here we could not agree more.  With our own clients and prospective clients, we also go to great lengths to emphasize the importance of an initial Business Process Analysis.  We use these to match a client’s processes and workflows to the software and technology solution being considered.  We believe it’s the only way to begin an ERP project – and the single most critical phase at the onset.

Finally, Kimberling counsels…

“Ensure that you have a solid organizational change management strategy in place… Without employee acceptance and adoption of new business processes and software, the new ERP system is exactly that: just an unused system.”

There are a lot of fruitful benefits to be harvested from a successful ERP implementation.  Make sure yours extend beyond only the low-hanging fruit.

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