Using ERP for flexible manufacturing

Using ERP for flexible manufacturing

Traditional manufacturing favored long production runs of the same product because retooling machines to produce different products could cost time and resources, and waste capacity. In 21st-century manufacturing, however, long production runs are no longer valid. Capacity takes a back seat to production flexibility as the key performance indicator for factory managers. To deal with these changes, manufacturers have to look at new software solutions, and processes will need to be adopted.

Flexible manufacturing

Historically, manufacturing has been about productivity — efficiency, capacity, and economies of scale. But looking at the demands of today’s markets, flexibility is taking over as the driving factor for more and more manufacturers. With modern ERP systems, manufacturers can still be productive, as well as being agile.

Many manufacturers are now diversifying from a single product line to different manufacturing lines in one factory, each line with its own manufacturing processes.

Flexible manufacturing has several benefits.

  • A manufacturing approach that allows for flexibility can adapt to changes in the type and quantity of the product being manufactured. This adaptability can help reduce production costs and improve efficiency.
  • Flexible manufacturing is important as part of a make-to-order or assemble-to-order strategy that allows customized products and keeps inventories low.
  • Flexible manufacturing can help companies become more efficient by using the same machinery to make different products and making use of existing capacity.
  • Flexible manufacturing reduces waste because what is produced is what is ordered.

Many manufacturers in the Asia-Pacific region are implementing multiple production shops under one roof to allow them to be flexible so they can make different types of products and respond to variable market and customer demands. For example, one Australian manufacturer has converted from making just parts for one automotive customer, to being able to produce many different components for a number of different automotive customers.

While this type of manufacturing can be more efficient and profitable, it needs new systems to help supervisors and managers plan, schedule and monitor everything going on across the production plant.

Challenges of flexible manufacturing

In a flexible manufacturing environment, several processes must work together. Success depends on engineering, product design, production planning and scheduling, and shop floor production teams working together. This cannot be done if the information for each team sits in a silo. Shared data is critical.

For each different production run, there will be a unique BOM (Bill of Materials), Material Requirements Plan (MRP), and Master Production Schedule (MPS). These must coordinated so that inventory specified in the MRP, derived from the BOM, is ordered at the right time and is in the right place when needed. The MPS must then be able to use that information to plan what will be produced, when to produce it, and how much will be produced. The MPS should take into account factors such as lead times, capacity constraints, and inventory levels.

In addition to the production teams other departments also have to be involved — e.g. sales and procurement — as their activities also provide input into the environments and affecting material requirements, and production scheduling.

The importance of quality control in flexible manufacturing

Flexible manufacturing often means manufacturing a unique product(s) to a specific design.  In this scenario production quality is critical to encourage repeat business. Quality needs to be maintained over the whole range of the manufacturing process, from receipt, to production, to shipping. An ERP system equipped with a modern quality management system provides the full range of quality control. Tools such as scanning and PLC integration facilitates accuracy and timeliness of quality data.

Manufacturing Operations Management

In a flexible manufacturing environment, manufacturers need a solution to oversee what is happening across the production plant. That is a Manufacturing Operations Management (MOM) system. It provides the system to handle all the different manufacturing processes and allows managers and supervisors to make changes depending on what machinery and resources are available.

The MOM can create a detailed, and flexible , production schedule which can be used for planning what work is done on a daily or weekly basis. This schedule includes which machines will be used, which operators will work on each machine, and how long each operation will take.

In a flexible environment it is important for MOM to monitor the production schedule regularly to ensure that everything is running smoothly. If any issues arise, MOM may need to make adjustments to keep production on track.

ERP is the solution for flexible manufacturing

By using a MOM as part of a unified ERP system, each shop in the plant can be managed and scheduled separately. Not only that, the other information that the MOM relies on for scheduling — e.g. material availability, rush orders from sales — is immediately available. As flexible manufacturing often provides design services alongside manufacturing services, some factories even use their MOM to schedule the design shop to maximize design throughput and recovery.

Functions in a flexible manufacturing operation cannot operate standalone if the factory is going to work successfully. They need a system that can easily and effectively handle all the different manufacturing processes. In each shop or factory, planning, scheduling and quality control need to share data; for example, if a quality issue is detected, production work will have to be rescheduled. An ERP enables collaboration across the enterprise. With a MOM, it allows manufacturers to plan and schedule across different shops in the manufacturing plant, and to do that in one place even for different factories.


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