Streamlining Production & Inventory for a Growing Manufacturer

Overview

About the Client

This client operates as a mid-sized manufacturing company with two production units that are involved in the production and assembly of parts for B2B clients. With an increasing order book and a growing SKU complexity, this company was outgrowing its spreadsheet-based processes. They were managing production scheduling, procurement, along with shop floor dispatch, as well as finished goods inventory with an assortment of instruments and manual records, resulting in problems that began to impact delivery times and customer satisfaction.

Challenges Faced

• Production planning was performed by hand, without actual monitoring of machine utilisation or the status of work-in-progress in the two plants.
• Bill of Materials (BOM) updates were processed offline, resulting in frequent misunderstandings between procurement orders and the actual production requirements.
• Inventory was logged in spreadsheets, which led to frequent shortages of essential raw materials, as well as an overstock of items that were slow to move.
• The finance department had no live access to the production costs, which made accurate costing of jobs and analysis of profitability impossible.
• The data was stored in silos. Purchase production, dispatch, and purchase teams that did not have a shared system of records, which led to delays and miscommunication.

Recommendations by Blueflame Labs

Blueflame Labs initiated a thorough operational audit in the span of four weeks. We interviewed the various stakeholders on the shop floor, procurement logistics, finance, and procurement. We analysed over 40 business processes, and then mapped issues to gaps in data.

Our advisory team recognised that the company needed an ERP system that was centralised and had solid manufacturing planning capabilities, such as material requirements planning (MRP) and managing work orders, as well as the integration of control over inventory. We advised against an all-in-one system and instead suggested an option with specific manufacturing modules that can be customised to fit the client’s specific manufacturing model, while also accommodating future production requirements for process manufacturing.

Our Solution

We created an ERP solution that was centred around the cloud-based Manufacturing Management Suite which is equipped with modules for scheduling and planning production as well as multi-level BOM management, real-time inventory tracking, purchase order automation, and job-costing. Custom workflows were created to automate the generation of production orders using confirmed sales orders as well as trigger requests for procurement when inventory levels dropped below the threshold and then push live machine utilisation data onto supervisory dashboards.

A separate layer of management reports was placed onto the ERP to provide management with immediate visibility into the performance of the plant without having to sign into the main system.

Implementation & Integration

The process was completed in three phases spread over nine months. Phase one dealt with master data configuration, BOM migration, and open balances for inventory, an effort of six weeks that involved the cleansing of data from more than 12,000 item records. Phase two launched with inventory and procurement modules, which were followed by shop floor planning and production execution in Phase three.

Blueflame Labs integrated the ERP with the client’s machine monitoring system by using an API to obtain real-time utilisation information. We provided role-specific training for users for staff of 60+ in both facilities and offered the support needed for hyper care for 8 weeks following the go-live date to ensure stability in the operation.

Results

• We have seen a reduction of 32% in the time to produce within 6 months of going live by utilizing real-time scheduling and automation of work orders management.
• The accuracy of the inventory improved up to 98.5%, drastically cutting down on the number of emergency purchases.
• Reduced manual interventions in the procurement-to-production workflow by 40%, allowing planning teams to focus more on demand forecasting.
• Finance team was able to have access to live costing information for jobs to the first time. This has improved margin analysis across all product segments.

The client appreciated the ERP change as the most significant operational improvement of the company’s more than a decade of history.