Does Yo r Informatio Flow?
Isgetting the right data from sales to shipping a pain?
BY SCOTT BURY
he flow of information is as crucial Tto fulfilling a customer's order as is the movement of parts and stock. Consider what happens when an' order arrives for cabinets and the customer is requesting a two-week turnaround. This isn't really unreasonable, as it doesn't take twoweeks to'put together some cabinets and ship them out. But before lumber can move into the shop, before a screw can turn or a saw start, information has to move first. The sales rep has to fiDl out an order form and calculate a price. Then, the estimator has to review the order and make certain the rep didn't quote too low a price. The production manager then has to read the order to determinfewhatwork has to be done and figure out when it can fit into the production schedule. The production manager checks the inventory. Is the product in stock, or the materials and parts needed to make it? Out of stock? Then fiDl out a purchase order and send it to the purchasing department, which begins a similar cycle at the supplier. When the parts come in, ,schedule production time. Key people onvacation? Lots of big orders going through the shop? It may be time to schedule overtime or hire casual labor. Get out the files and start caling to see who's available. Wait: machines are coming up for scheduled maintenance before you'll be able to get this order in. Another delay. Just as the order for the cabinets enters the production shop, the manager gets a phone call: the supplier can't deliveron time. The order is delayed again. Finally, al the parts come in and the shop is ready. The cabinets are made and finished according to the order form. They're crated and loaded onto the truck. The shipper fills out a bil of lading and a waybil and the truck departs. wwwiswonline.corn
ERP software can be used to calculate project costs, generate orders, schedule production as well as sendout an alert when inventory reaches critical levels. Photo courtesy of MBI
Several days later, it turns out the shipper transcribed the wrong address from the invoice onto the waybill. The company now has to pay triple (to the wrong address, return, and again to the right address) for shipping aproduct to a customer who's already upset by al the delays. While one order wil probably neverencounter this many problems, this example illustrates many of the information bottlenecks that can occur in a manufacturing plant. Computerization doesn't necessarily solve the problems either, because an inventory system doesn't necessarily "talk" 'to the sales system, which doesn't necessarily talk to the accounting and billing system, either. "Most companies start using 'homegrown' computer systemsand software for things like accounting and inventory control, but as they grow they realize that the different parts of the system are disjointed," says Seuhyounng Pak, head of public relations and marketing at Friedman Corp. "There are lots of break points in
the flow of data between departments. As companies grows larger and more complex, they eventually start to feel the pain."
What manufacturers need is an information system that presents the data for planning and to make effective decisions. Salespeople, production managers, buyers, shippers, maintenance managers, accounting - everyone involved in the transactions that enable a business to do business, need to see the sales, orders and actions that will affect them - and they need to seethem in real time. The computer system that does all this is' called ERP, for Enterprise Resource Planning. This kind of system requires a network of linked computers to coordinate information from orders, costs, quotes, inventory, purchasing, production, shipping, accounting, biling, human resources and just about every other part of the "enterprise."
'WOOD & WOOD PRODUCTS JUNE 2003...
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