The world has been stricken by the pandemic of March 2020. There have also been numerous personal tragedies. The manufacturing industry used to keep our homes, businesses, and stores well-stocked with a large variety of goods. Amazon has raised expectations about the home delivery of almost any product in recent years.
Manufacturers all over the world feel the heat from sudden demand swings and supply chain constraints. Unreliable workers, rapidly inflating costs, unreliable workforce and unhappy customers staring at empty shelves and waiting for backorders are all contributing factors to their woes.
Manufacturers will face challenges in 2022 such as rising labor costs, supply chain problems, and increasing material costs. But, manufacturers who have an effective ERP system in place as part of their data-driven strategy can adapt quickly to changing conditions and remain profitable while also being able to take advantage of unexpected opportunities.
Omicron has taken over the country as 2022 begins. The number of people who don't show up to work is disrupting every aspect of society.
Are you ready to find your best fit?
Check for these factors in your ERP system for your manufacturing operations.
Use ERP to Reduce Supply Chain Disruptions
Omicron has taken over the country as 2022 begins. The number of people who don't show up to work is disrupting every aspect of society. Prior to COVID, a lean supply chain meant minimal inventory and just-in-time delivery. It is essential to plan for contingencies.
How to use your ERP to better manage inventory and supply chain issues
Stock Levels: Determine the stock levels and best-estimate lead time. Also, determine desired order quantities for all stock items. To help the system predict how much material it will need, use "Forecast" orders. Run the MRP (Advanced Planning and Scheduling) daily. Keep track of all the stock that needs to be ordered.
Date Fields: Fill out all date fields first with your best estimates. For the best planning and scheduling, use ERP's alternate due date fields for sales orders, purchase orders, and work orders. The alternative date fields can be used to help you compare the expected delivery dates with the promised due dates.
Inventory Management: In 2022, it is crucial that all inventory be managed better. To track inventory's physical location, you can use the "Bin" and "Location" functions in your system. You must adhere to all rules regarding inventory movements. If a part moves in real life, it must also move in the system. For accuracy, review all inventory transactions, including PO receipts and issuing material to jobs. Bin-to-bin transfer, shipping, and bin-to-bin transfers. Cycle counts. Epicor offers excellent online training videos that will help you get started with cycle counts in the Prophet 21 system.
Find out How ERP Systems Can Help Manufacturers Meet the Challenges of 2022
To Estimate Better, Keep up with rising costs
Check your costs and ensure that you have the most current information in the cost areas that determine 2022's profit. These include:
Overhead costs incurred by Work Centers/Machines
The employee costs are absorbed into the job
You need to know the average cost of your materials, or a recent standard cost, in order to calculate inventory costs. Also, what it will cost to replace these items. Global Shop Solutions has a field called "Alternate Cost" that is located on each inventory part. This information can be used to estimate the cost of the Bill of Materials. While your actual costs for parts remain the same, what you use to estimate jobs depends on their replacement value.
Standardize your RFQ process to get quotes from more vendors faster.
Transport costs are a major factor in this year's budget.
In a rising cost market, adjust pricing more often
Now is the right time to implement the Estimating & Quoting a section of your ERP. It is more important than ever to not rely on old pricing methods for manufactured parts. An hourly rate of $150/hour might overlook many factors. ERP systems such as JobBOSS provide more detail into cost estimates, making it easier to compare actual costs to the job's completion.
Reevaluate your costs and adjust your pricing more frequently. If you are using standard products, set a price point at which prices can rise. If you find publishing prices painful, try to find a better way. You may be increasing prices multiple times per year. It's all about agility in 2022.
Maximize the labor of employees who come to work
Manufacturers will begin their day counting the number of people who show up in 2022. Keep an eye on the local job market and average wage levels. Companies are expecting higher wage increases for 2022 than they did in previous years. Employers should be given the most valuable tasks when they arrive at work.
Cross-training employees using the ERP company's top training tools is a great way to teach them how to perform the ERP tasks that keep your system running in real-time. Check the clocking in and checking out jobs, making sure labor records are accurate each day, material issuing, and shipping processes.
Easy, intuitive instructions for work that can be accessed in an ERP system are just a click away. With minimal or no assistance from others, everyone should be able to quickly find the information they need to complete their job.
Set up the employee to work well from home if they are able to. Non-production workers have been denied the right to work remotely for a long time by manufacturers. Forget the old biases and create policies and procedures that allow your purchasing manager, engineers, and sales to work remotely in 2022. It might be a good time to move to a cloud-hosted ERP system. Cloud options are available for most ERP systems and can be used to keep your ERP running 99.99% of the time. Many ERP systems offer SaaS options to allow you to adjust the number of users or reduce it depending on your staffing level.
To combat labor shortages, increase automation with Industry 4.0 Technology
Last but not least, continue to work on projects that will increase efficiency. It is possible to make more products using fewer people if you have the right technologies. Automating is a priority for many engineers. Your ERP system is the hub, and automation projects are the spokes. You will be touched by almost everything, so it is important to work closely with your ERP software provider in order to make changes that can also be automated.
Ask your ERP company to check on how you are using their system
Ask your ERP company for a review of your use of their products. You should ask them to tell you how you're using it. Your ERP system should be a valuable asset. It should be able to take your company where it needs to go. Get the training you need to get your ERP system moving if you haven't yet. It may be necessary to re-implement parts of it. But it will be well worth it. An ERP system that is properly implemented and maintained like the one provided by Arion ERP should be the most valuable asset of a manufacturing company in 2022, regardless of how turbulent the year ahead is.