Category: Manufacturing (BOM)

• Why and How to Use Batch Number Controls in Manufacturing



Why and How to Use Batch Number Controls in Manufacturing

If you’re in the manufacturing industry, you know the importance of quality control and the time constraints you face when products are suddenly recalled. Batch number control software is the best way to keep on top of your inventory. However, you have to know how to use it – and which is best for you.

What is a Batch Number?

The batch number is a designation printed on the label of whatever product you manufacture so that you can keep track of each batch produced. In addition to identifying the batch produced, the number will include particulars relevant to control and manufacture.

What is Batch Tracking?

This is a simple way of tracking your batches of manufactured goods to optimise the management of your supply chain and keep on top of quality control. Using batch tracking, you can quickly identify and locate stored goods when they’re being shipped, stored in warehouses, or distributed to consumers.

Which industries use batch number tracking?

This is incredibly useful for all types of industries related to manufacturing, among them:

• Food and beverage
• Pharmaceuticals
• Clothing
• Cleaning products
• Toiletries and cosmetics
• Toys
• Electronics
• Firearms
• Construction materials

How Does Batch Number Tracking Work?

If you’re implementing a batch number tracking system, here are some of the steps you can follow to ensure all controls are in place.

Define the batch size: When itemising the batch, you need to ensure the products were manufactured using the same raw materials, by the same machine and team, during the same period of time.

Choose your batch format: Your batch numbers should be unique combinations of letters and numbers. It’s best to include the product’s date and initials for easy searching.

Keep track: You’ll need to log all the details of the batch in a tracking record document.

Label batches: Choose how you’ll label the batches, whether it’s print or sticker, and what type. This could also include a barcode with a serial number.

Include all batch details: Every batch needs information pertaining to the batch. This could include:

• Dates of the manufacturing process
• Bill of materials
• Details of the person verifying the process
• Health and safety information
• Maintenance and cleaning information
• Quality control test results
• Equipment and processing lines
• Supply line details
• Quantity of goods produced
• Best before date
• Weight of active ingredients

Why Use Batch Number Tracking?

You might have a general idea of why batch number tracking is useful, but here’s an in-depth look at why you should be implementing it as a manufacturer.

Quality Control

Using batch numbers, you’re able to quickly identify any defective raw materials which is vital for product recalls. If there is any product defect, whether the materials, parts or machinery, you can easily determine the source of the problem and rectify the situation.

Customer Relations

When products need to be replaced or repaired, the batch number will allow you to identify the relevant information, keeping your customers satisfied.

Regulatory Compliance

Many countries legally require a batch tracking system which will have to be considered when deciding what to include.

Streamlined Expiring Tracking

For those in the manufacture of food products, batch number controls are an important way to ensure high-quality food production at all times. With batch number controls, the expiration date of food will need to be tracked to keep consumers safe.

Prevent Counterfeits

Using batch control numbers prevents the emergence of counterfeited items from entering your inventory. This is particularly important if your products are susceptible to fakes, as you can pick up counterfeits quickly to protect your profit margin.

Reveal Trends

Batch control numbers are also able to provide you with useful insights into your business such as which batches are selling better than others. This way you can quickly notice trends in which items are best to stock.

What Are the Benefits of Automating Batch Number Controls?

If you’re in the manufacturing industry and are looking at implementing batch number controls, you will probably be considering an automated system. Here’s why an inventory management system such as this can be so beneficial to your business.

• This can be a really affordable and user-friendly process when you’re working with the right company.
• With batch number tracking automation, you’re able to improve integration, compliance and customer relations.
• This simplifies your quality control as you’re easily able to track your products across the company.
• Automation gives access to everyone in your organisation, as they can easily access, trace and verify batch numbers and warranty information.
• Through automation, you’re able to quickly troubleshoot which means tracking and removing any expired products from the shelves.
• With batch number automation there’s improved accuracy which means improved regulatory compliance and less chance of charges.
• Improved compliance means more likelihood of increased sales over time.
• With automated batch number controls, there are fewer accounting errors than with manual tracking.

What Are the Features of Batch Number Tracking in Manufacturing?

Automated batch number control systems are made even easier with the latest features. When investing in a new system, you might want to consider what features are best suited to your organisation. Here’s a look at some of the options available:

Clear instructions

Certain batch number control software comes with auto-populating instructions that guide users through the entire process.

Authentication

The batch number control software can also come with log-ins and sign-offs with double authentication requirements for added security.

Compliance management

Certain software comes with industry-specific compliance management tools that collect information and documents required by law.

Quality control

An efficient system will come with quality control features to assist in quality testing data that tracks deviations and identifies any discrepancies in inventory.

Inventory control

A batch number control system will be able to integrate with existing warehouse and inventory management systems, thereby updating the system with material use and allowing for real-time inventory control.

Mobile systems

Modern batch number control systems are now available with mobile capabilities so that you can access your software from any mobile device. This means no need for hard copies and you’re able to check on your inventory wherever you are.

Packaging records

Certain systems come with specialised instructions and records such as master packaging and batch packaging records. This is particularly useful for manufacturing companies specialising in pharmaceuticals.

Converting Unit of Measurement

If you’re manufacturing items that use different units of measurement, you’ll require specific software that automatically converts these base units for improved accuracy.

Security Controls

You might need to restrict access to your batch number control software depending on what you manufacture. This will require security controls that enforce signing off on various procedures throughout the manufacturing process.

Equipment Integration

There are specialised batch number control systems in the chemical manufacturing industries that will actually integrate with your equipment. This could be scales, thermometers, or pressure sensors so that all readings are automatically calculated.

If you’re finally convinced that an automated batch number control system is the way to go, but you’re not sure what to do next, then contact Omni Accounts. They provide industry-leading software solutions specific to your industry for a seamless and efficient inventory control system.

• Serial Number Controls vs Batch Numbers: Which is Best for You?



Serial Number Controls vs Batch Numbers: Which is Best for You?

For inventory tracking, the two most common tracking options are; serial numbers and batch numbers. Both are effective in different areas, but understanding the differences will allow you to decide which is best for your business.

Here’s what you need to know.

What is a Serial Number?

Serial numbers are a unique set of identifiers that are assigned to individual items within a batch of products. Unlike batch numbers, serial numbers have a one-to-one relationship with each individual product so you can’t get two products with the same serial number.

How Do You Find a Serial Number?

These are often inconspicuously located on the back or bottom of electronic devices, as well as being printed on a label or engraved into the product. It’s usually listed as ‘Serial Number’, ‘Ser No’ or ‘SN’ to differentiate it from other product identification. Certain electronic items save their serial number on the device ROM so you can view it using the software. These can be located under ‘Settings’ or ‘About’ with ‘activation key’ another terminology for serial number.

What Are the Benefits of Serial Numbers?

In terms of inventory control, serial numbers provide you with a number of incredible benefits. Here’s a look at some of these.

1. Oversight and Stock Control

Serial number tracking allows the tracing of every individual item in your inventory from the time it’s delivered through to sale. Basically, it means that items can be identified down to individual components, so you don’t have to waste time searching through boxes or warehouses looking for parts. Serial numbers allow you to track what’s in stock at any time, prompting new orders and reassignment of stock where necessary.

2. Records and Regulation

Serial number tracking allows for necessary record-keeping and accuracy in case of external audits. Serial numbers also ensure compliance, which is particularly vital in highly regulated manufacturing industries with specific variants.

3. Product Details

Serial numbers provide you with specific information about the product such as colour, size, weight and configuration.

4. Identify Issues and Trends

Serial numbers allow you to pinpoint any particular item issues and address them quickly. They also allow you to identify which items are trending more than others. This guides you in stock for the future so that you’re not overspending.

5. Shipping

Serial numbers assist in reducing shipping errors which can be critical for certain industries such as pharmaceutical and medical.

6. Warranty

Having a serial number sequence helps with warranty claims as well as providing after-sales support. If an item is faulty and returned, you have all the information to provide your clients and customers with the necessary support. This is particularly true for complex products such as consumer electronics where the same parts are used in multiple makes and models before being phased out. Even for routine maintenance, being able to track the serial number allows for the matching of parts and products.

7. Product Recall

For manufacturers, it’s imperative to have serial numbers in case there’s any fault with the product and a recall is needed. Using serial numbers, you’re able to identify the faulty component and minimise the recall number, rather than having to recall all the stock from the factory. Serial numbers take it a step further and allow you to identify the actual production run, meaning you can isolate the production run with the fault.

8. Theft Protection

Another post-sale benefit of serial numbers is protecting your customers in the event of a theft. If a valuable item is stolen and recovered by the police, it can be linked back to its original owner and returned, provided the serial number is reported. The digital serial number, known as a Media Access Code, can also identify items and alert customers to stolen devices.

Which Products Use Serial Numbers?

The process of applying serial numbers can be very time-consuming as it’s required for each, individual product. For this reason, serial numbers are not used for certain fast-moving consumer goods (FMCG) but rather technical merchandise. Here’s a look at some of the items.

– Appliances

The appliance industry relies heavily on serial number sequencing as this allows for easier location of parts. You simply have to input the number to find it on the manufacturer’s site. Everything from microwaves and stoves to washing machines and tumble dryers will come with a unique serial number.

– Automobiles

Cars, trucks and all other manner of automobiles will come with a serial number known as a vehicle identification number (VIN). These have a total of 17 numbers and letters that are used to distinguish each automobile and are incredibly helpful for warranties, car recalls, registration of the vehicle, insurance and theft.

– Electronics

Serial numbers are able to identify laptops, tablets, cellphones and all other electronic devices which is helpful for tracking warranties and dealing with after-sales service. Serial numbers also provide insight into product compatibility, with codes indicating whether products are compatible with updated versions.

What to Remember When Using Serial Numbers

When using serial numbers for your products, you need to take note of a few elements:

• The serial numbers require durable and legible labels.
• The inventory management system you use must support the tracking of serial numbers.
• You will need to have the ability to read and record serial numbers with barcode scanners.
• You will need to track serial numbers by location (warehouse) and via shipments post-sales.

What Is a Batch Number?

Batch numbers – also known as lot numbers, lot codes, or code numbers – are used for identifying a particular number of products with have common properties. So unlike serial numbers which are unique to each product, a number of similar products could have the same batch number. Batch numbers consist of a combination of numerical digits which are assigned to product groupings determined by the organiser. Companies might assign batch numbers based on location, manufacturing or expiration date.

What Are the Benefits of Batch Numbers?

1. Inventory Oversight

Batch numbers provide you with inventory tracking information on how the goods move in and out of your company.

2. Assist in Manufacture

Batch numbers allow for the categorisation of materials which helps with the manufacture of products. They also allow companies to classify finished goods for distributors or suppliers.

3. Spot Trends

Batch numbers allow you to note trends within specific groups that show if and why you’re generating a profit or a loss. You’ll also notice patterns such as repeat returns or defects from one batch.

4. Quality Assurance and Recall

Batch numbers allow for random batch testing as well as identifying defective items. In the event of a product recall, batch numbers mean you can easily track the products rather than recalling all manufactured items.

5. Compliance

Government organisations may require batch and tracking numbers for particular products, so it’s best to check you’re remaining compliant.

Which Products Use Batch Numbers?

Batch codes are especially helpful when you have batches of products or if you manufacture and receive items in large quantities. Batch numbers allow for ease of location as the products are stored together. Some of the products most suited to batch numbers include:

– Fabrics

Dye batch numbers are used to classify various types of fabric or clothing according to the colouration during the process. The reason being that, when mixing a new batch of dye, the colour will never be absolutely exact because factors such as dyeing time and temperature impact the shade of the colours.

– Fireworks

Most national regulators require manufacturers to keep records of all fireworks imported for distribution, which means batch tracking numbers will be of assistance.

– Food and Beverage

Food and beverage manufacturers require batch tracking numbers such as best-by dates. This gives retail outlets an idea of when they should stop selling items. It’s also important for any product recalls as it shows when batches were produced together.

– Medical, Chemical and Pharmaceuticals

Likewise, all pharmaceuticals, medicines and chemicals will require batch tracking numbers to indicate when they should be used by. This was evident with Covid-19 vaccinations which had to be urgently administered before expiring.

What Is the Difference Between Batch and Serial Numbers?

The main difference between batch and serial numbers is that batch numbers are used for a group of products manufactured at the same time. Serial numbers are unique numbers assigned to specific items. Software systems are available to help you monitor these codes for better inventory management and forecasting. Contact Omni Accounts today to find out more about the latest tracking software.

• Bill of Materials (BOM): A Guide for Manufacturers | Omni Accounts



Bill of Materials (BOM): A Guide for Manufacturers | Omni Accounts

Ever wonder how a Bill of Materials (BOM) impacts the manufacturing process?

A BOM is one of the most important documents for any product development and production team. This article will go over what it means to have a BOM and why they’re so crucial for the whole process.

What is a Bill of Materials in Manufacturing?

A Bill of Materials is a list that tells us what the raw material, sub-assemblies, and parts are for building something. It can be used to track inventory or as a guide in manufacturing. A Bill of Materials (BOM) is not just limited to small businesses either; it’s common practice among larger companies too.

Having a blueprint that lists all the parts and components required to produce your product, and one that each stakeholder can access at any given time is an essential foundation for any project.

An effective BOM includes different dimensions, raw material specifications, costs, quality levels, work-in-progress information, and forecasted lead times for each component.

Benefits and Drawbacks Using Bill of Materials

When used correctly, an accurate bill of materials is a great way to help companies manage their inventory and avoid costly mistakes. One of the biggest benefits is that it allows you to see all components and processes in one place. The blueprint for a product should be available to all team players and kept updated as changes and amendments inevitably arise.

The primary drawback is that it can take a significant amount of time to create and maintain. This is especially true when a company has multiple products and parts to manage.

However, it’s clear that the pros outweigh the cons in this instance, and a well-thought-out mBOM will streamline the entire process.

Common Mistakes When Creating A Bill of Materials

While many people believe they have created a complete list of items for making an accurate BOM, there are some common mistakes to avoid.

Mistake # One: Missing Parts from the Bill of Materials

If a part needs to be replaced or is out of stock, it can create problems. If you miss an important item on the list, there will not be enough material for production, and orders could take longer than expected. This may also lead to other unwanted consequences and could hold up the entire production.

Mistake # Two: Forgetting Consumables

Consumable costs can slip through the cracks but are still an essential part of the production process. These items include things like tools, lubricants, and adhesives. If a needed item is missing from this often-forgotten list, then production could come to a halt.

Mistake # Three: Forgetting Assembly Processes

If you forget an assembly process or process task, you may end up with an incomplete product. This is why assembling a BOM and breaking down each process step by step can help avoid costly mistakes like this one.

Mistake # Four: Shipping and Packaging

Shipping and packaging are a necessary part of the process. A solid BOM in manufacturing will include the production and assembly of a product right up to shipping. If you forget to account for these costs, then this could lead to lost profits.

Mistake # Five: Wrong Component Quantity/Inaccurate Inventory

Inaccurate inventory or miscommunication on the quantity of a component can have a massive knock-on effect on production lead times and assembly time. This can also impact the quality of the final product.

Looking at these common mistakes, it makes sense to use the incredibly useful technology available to solve these exact problems when creating a BOM in manufacturing. More about that in a moment.

How do you Structure a Bill of Materials?

The goal of a Bill of Materials is to make sure that you have the right components in place for seamless production. There are several ways this can be done, and it all depends on your needs.

Some people prefer an assembly-based Bill of Materials where they list out each component required from step one (assembly) to the end result.

Others prefer to list each component required for the end-product. The advantage of this method is that it gives you an accurate and comprehensive idea of what’s needed to produce your product while also providing a checklist with all necessary components listed in sequential order.

An excellent course of action is to create a Bill of Materials through collaboration with your manufacturing partners. Two heads are better than one, don’t you agree?

Competing on a Global Stage

The right data is essential to an organisation’s success in the global market. Without access to or understanding of their product, it would be difficult for companies to compete globally.

In a world where Manufacturing and Computer-Aided Design models are insufficient alone, Product Lifestyle Management (PLM) becomes more important than ever before. By managing BOMs across functional areas such as mechanical content, electrical content, embedded software, or engineering calculations, businesses have access to rich definitions of products that fulfill requirements for international competition.

As technology advances and products become more complex, manufacturers are finding it increasingly necessary to have a central repository of all the different forms of data for their products.

This single “source of truth” offers smart manufacturers a leg up in a competitive market. If you’ve been struggling with compiling and managing a Bill of Material for your manufacturing business, we’d like to invite you to chat with one of our team.

We have the solution you’ve been looking for.

• ERP Software for the Aluminium Industry



ERP Software for the Aluminium Industry

A good ERP software application for the aluminium industry will provide a comprehensive inventory management system to carefully track and manage materials.

ERP Management Software

ERP (Enterprise Resource Planning) is a software application that allows companies, from a range of industries, to integrate and manage all manner of processes. Applications that can be integrated into this single system include planning, sales, marketing, finance, human resources, and inventory management, among others.

ERP for Aluminium Extrusion

The non-corrosive, sturdy, lightweight, malleable qualities of aluminium – as well as the fact that it’s 100% recyclable – have seen it spike in demand. Extruded aluminium is a heavily-consumed metal required in industries including (among others):

• Manufacturing
• Packaging
• Aviation
• Architectural
• Electronics
• Automotive
• Aerospace
• Energy

The Extrusion Process Explained

Basically, aluminium extrusion is the process whereby aluminium alloy is forced through a specifically designed die using a powerful ram. When the aluminium emerges from the other side onto the runout table, it has been moulded into the required shape. These include:

• Solid – There no enclosed voids or openings such as for a rod, beam, or angle.
• Hollow – There are one or more voids, such as a square or rectangular tube.
• Semi-hollow – This has a partially enclosed void, such a ‘C’ channel with a narrow gap.

What Are the Steps of Aluminium Extrusion?

Before understanding where ERP software fits into aluminium extrusion, it helps to have a quick overview of what this complex process entails.

1st Step

Preparation of extrusion die including pre-heating before its loaded onto the press.

2nd Step

The aluminium alloy (known as a billet) is pre-heated to make it malleable.

3rd Step

The billet is loaded into the extrusion press and lubricated.

4th Step

The hydraulic ram pushes the billet into the extrusion press.

5th Step

The pressure pushes the alloy through the die opening.

6th Step

The fully-formed extrusion is guided along with the runout table and cooled.

7th Step

The extrusion is cut using a hot saw.

8th Step

The extrusion moves to the cooling table to reach room temperature.

9th Step

The extrusion is moved to the stretcher and brought to specification.

10th Step

The hardened extrusion moves to the saw table where it is cut.

Features of ERP for the Aluminium Industry

There is a lot that goes into the aluminium extrusion process, as well as the follow-up sales and distribution, which is why an industry-specific ERP software is ideal. Here are some of the ERP features for this particular industry.

1. Inventory Management

This involves the ordering, storage and shipping of the aluminium product. Through the implementation of ERP software, inventory is monitored and the system is able to re-order or re-stock product quickly, thereby minimising holding costs and reducing overheads related to inventory challenges. Within the metals industry, inventory management is often a lot more complex than with other manufacturing processes. This makes implementing and adopting a comprehensive ERP system much more crucial. With an item-centric ERP system, fabricators can be established to accurately track inventory with a focus on details.

Challenges of poor inventory management

A lack of inventory oversight can be detrimental to the operations of an aluminium manufacturer. With valuable ERP software, you’re able to prevent the following:

• Inventory shortages (running out of stock)
  In a competitive industry like aluminium manufacture, inventory shortages mean that your profit margin is high and a stock shortage – especially during peak periods – can drastically impact the business. Through effective ERP software, you’ll ensure you’re always attaining ‘par levels’ and, if the inventory drops below, an alert will send out an order for replenishment.
• Sitting with ‘deadstock’
  On the other side of the spectrum is the ‘deadstock’ which is stock that is unused, unsold or expired. This is a massive waste for anyone in the aluminium industry as you’re losing out on both the cost of the goods sold, as well as the storage costs involved. By implementing an ERP system, you’re able to track all ordered products from day one by tracking the purchase, manufacture and expiry dates, alerting you when the product is about to become ‘deadstock’.
• Manual calculations for inventory management are not only prone to error but are also extremely time-consuming, which is a drain on company resources. Automation through ERP software saves you time and money.

2. Material Requirement Planning (MRP)

Connected to inventory management is MRP and scheduling – both incredibly challenging as they require getting the right material to the right place at the right time, or threaten to disrupt the entire supply chain process. ERP software will identify the source of demand for material and, based on previous demand and purchase trends, will trigger a purchase order.

3. Estimation and Quoting

In an extremely competitive market like aluminium manufacture, estimation and quoting times are critical to securing an order. An ERP system will automate the entire process which previously relied on personnel and manual calculations. It also provides real-time data on Bill of Materials (BOM) from vendors, material costs and inventory levels for an accurate estimate and profit margin.

4. Warehouse Management

The ERP warehouse management functionality allows for the monitoring of complex warehouse operations within the metals industry. Some of the latest functions included in ERP software are radio frequency technology, batch and serial number management, work-in-progress tracking, and integrated shipping. Through real-time stock control, you’re able to monitor inventory at multiple warehouses through a single system.

5. Barcoding

ERP systems can be integrated with barcode scanning for better inventory tracking, as real-time data is updated at every step of the process, translating to increased accuracy as data collection is performed with minimal error.

6. Production Management

Through ERP, the multiple steps of production are integrated into one place, which allows for the management of aspects like production costing, die issue planning, die management and maintenance, as well as breakdown reporting.

7. Integration With CAD

Many aluminium fabricators work with CAD (Computer-Aided Design) software for designs which then have to be translated for production. Within the metals industry, you’re often working with the customer’s designs that need to be integrated into CAD software – and ERP has this capability. The various functionalities such as BOM, inventory management and production can be integrated with CAD for immediate updates, accurate quotes and scheduling.

8. Logistics

All facets of the aluminium logistics’ process can be automated and integrated with ERP. In addition to inventory monitoring and MRP, this includes delivery tracking, bulk order management and composite material management.

9. Quality Control

Because of the technical uses of aluminium, such as used in the automobile, aerospace and machine manufacture industries, the end-product has to be of an extremely high quality that meets industry standards. Fortunately, ERP software can assure quality control through its comprehensive compliance system that measures quality parameters at each step of manufacture. Alongside barcoding technology, any defective items can be quickly identified and recalled.

What Are the Benefits of ERP Software?

With so many features, ERP is hugely beneficial to any organisation. Here’s a quick overview of what you can look forward to:

• Access to real-time data
• Streamlining of business operations
• Improved collaboration internally and externally
• Increased productivity
• Massive time and cost savings
• Visibility and complete business oversight
• Seamless integration
• Enhanced data security
• Improved customer relations

Common Mistakes to Avoid When Choosing ERP

The undeniable benefits of ERP within aluminium extrusion processes are evident, but the very specialised nature of this industry means that the ERP chosen has to be carefully considered. When deciding on software, there are some common mistakes that can be easily avoided. These include:

• Insufficient research: The ERP will impact all departments and operations which is why you need to research the software required and get your ERP implementation team together.
• Lack of needs’ evaluation: Discuss the business weaknesses and areas of improvement with the ERP team so that you can narrow down exactly what you want out of your ERP software, and identify the necessary features.
• Underestimating resources: Implementing a new ERP system requires time and resources, but once done, you’ll immediately begin to see the value.
• Poor communication: Although ERP will streamline your business operations, there will be some disruption while it’s being implemented. Ensure everyone is on board with the new changes so that you don’t rock the boat unnecessarily.
• Taking on too much: ERP implementation needs to be done step-by-step, starting with the most important features first.
• Overlooking training: Staff will need to be trained in the ERP system before implementation, with ongoing training sessions to refresh staff and introduce any new features.
• Forgetting maintenance: This will impact the functionality of ERP and a valuable supplier will ensure you’re keeping up-to-date on your software maintenance.
• Dropping redundant software: ERP will replace many current software applications. By keeping these running, you’re slowing down the system and wasting money.
• Overlooking key features: Make sure you’re getting the full use out of your ERP software by utilising all key features.

By partnering with a reputable industry supplier, you’ll be able to avoid the mistakes related to ERP selection and implementation, allowing your operation to benefit fully from all the industry-changing benefits of this innovative software.

• ERP for the Paint Manufacturing Industry

 



ERP for the Paint Manufacturing Industry

The development of the South African construction industry has had a direct impact on the growth of the paint manufacturing industry. This has prompted the need for improved IT (information technology) and the incorporation of ERP (enterprise resource planning) within paint manufacture. Here’s a look at the benefits for business.

What is ERP?

ERP is essentially the integration, as well as the automation, of core business functions through the use of innovative software. This business software will be designed to record and manage the enterprise data, improving day-to-day operations across industries. ERP systems will provide a paint manufacture industry with improved:

• Business intelligence
• Visibility
• Analytics
• Efficiency

ERP features for the paint manufacturing industry

There are many exciting ERP features that benefit those in paint manufacture, allowing the business to integrate and streamline operations. Some of the features include:

– Inventory management

There’s no interruption to your production process with ERP as the inventory management feature will automatically generate a purchase requisition, thereby preventing any material shortages. More than this, the inventory management feature allows you to integrate operations across various warehouses and plants from a single system. This incredible centralisation of data means constant inventory replenishment.

– Procurement

This feature will allow you to manage the purchase of various ingredients, ensuring the correct level as well as values at all times. An added benefit of this feature is the pending purchase order report which gives the purchaser an expected arrival date, ensuring availability at all times.

– Planning

The planning feature allows you to schedule all daily activities, as well as the expected completion date for projects. You are able to schedule delivery to customers, create job cards, and track the production costing, among other things.

– Finance

The ERP software has a range of valuable financial features such as accounts payable and accounts receivable, all of which are integrated with the operational features. This means every financial transaction is tracked, fulfilling all tax and accounting requirements.

– Intelligence reporting

All ERP software allows industries to accumulate valuable, real-time data that allows for business predictions and improved operations. You can assess what areas of the business are working, and what areas actually need to be tweaked to improve performance.

Benefits of ERP for paint manufacture industry

The many features of ERP software make this a must for those in the paint manufacturing industry, but if you aren’t convinced, here’s a look at the many benefits of this innovative software.

1. Increased agility

The emergence of the Covid-19 pandemic showcased the fundamental need for agility in business. The constantly evolving economic and business environments mean that businesses have to adapt to survive. How a business responds to change will determine the ultimate success or failure. Fortunately, ERP systems are incredibly flexible, allowing for businesses to scale up or down, and customise and integrate applications as the business changes.

2. Enhance productivity

By streamlining business operations through an ERP system, you are allowing for more oversight, more accurate reporting, and the accumulation of valuable business data. Implemented correctly, ERP software will improve overall productivity.

3. Better security

Cyber threats are becoming an increasing risk to businesses across industries, and it’s vital that cybersecurity is prioritised. With modern ERP solutions, you are able to store all valuable data securely.

4. Continued business growth

One of the biggest setbacks to business is waste. Whether it’s wasted time or wasted resources, this will drain a business and prevent it from reaching its potential. ERP systems will eliminate all inefficiencies, constantly improving business performance and growth.

5. Cut down on business costs

By cutting down on wasted time and resources, an ERP system is also cutting down on unnecessary business costs, as well as mitigating the need for additional IT staff. This means more funds can be directed elsewhere, enhancing business performance and profitability.

6. Enhanced customer experience

The customer-product profiles and flexible price change management on ERP software, as well as the consumer-driven data available, means your team is able to improve the customer experience. Through ERP, you’re able to create brand loyalty and secure repeat customers.

7. A valuable partnership

When investing in an ERP solution for the paint manufacturing industry, one of the biggest decisions to be made is which implementation provider to work with. An experienced provider will ensure the ERP software features are specific to your industry needs so that you’re not paying unnecessarily for features you won’t use.

• ERP Systems and the Food and Beverage Industry

 



ERP Systems and the Food and Beverage Industry

The Food and Beverage industry (also known as the F&B industry) is generally defined as all companies that are involved in processing raw food materials, packaging, and or distributing them.  This includes any fresh, prepared foods as well as pre-packaged foods. It includes alcoholic and non-alcoholic beverages. In essence, any product meant for human consumption, aside from pharmaceuticals, falls into the F&B industry. ERP systems (Enterprise Resource Planning Systems) can play a major positive role in this varied industry chain.

The Food and beverage industry is complex. There are many different product lines and manufacturing processes, but all producers face similar challenges. Constant adjustments to product, packaging, and pricing and a lack of uniformity in the supply chain (fresh ingredients and basic ingredients varying) mean food and beverage manufacturers must excel at inventory and Supply Chain Management. Expiry dates and stock spoiling are key issues. At the same time, the F&B industry must comply with ever-evolving environmental and safety regulations. ERP software and solutions help companies to achieve critical control and efficiencies- and an automated process assists in adapting to ever-changing formulations and seasonality. Exactly how can an ERP system help the F&B industry?

Product and Raw Material Traceability

As consumers become increasingly more aware of food and its origins, and more aware of their choices over genetically modified organisms (GMO), non-GMO, organic, free-range, feedlot, frozen or fresh- it becomes critical for F&B businesses to track and monitor the sources of their raw material and manufacturing process to ensure they can correctly label and sell products. Furthermore, as food regulations (and labelling laws) become stricter and tighter, it is critical that companies can prove that their labelling and claims are correct. In order to do this, they need to be able to track and trace exactly what products and raw materials go into their products to ensure that they are compliant at any point in time. ERP systems use batch numbers (supplied to you from the supplier, or created yourself) and allocate these to any ingredients being used in a current production run- such that when the finished goods batch is ready (with its own specific batch number) you are able to call up the necessary information to know exactly which set of ingredients (Bill of Materials), from where and when went into that batch of the finished product. This allows for full traceability from farm to fork.

Food Safety Regulations

E.Coli, salmonella, mad cow disease, and listeria are just some of the fear-inducing food bacteria that are not only dangerous but create panic in the market and in consumers. One of the cornerstones of food safety is the ability to efficiently and timeously execute a  food recall should the need arise. An ERP system plays an invaluable role in this. Should a specific finished goods batch (also known as a ‘lot’) be shown to be contaminated or dangerous, it is essential to know exactly where that finished product batch has been distributed and sold. The batch numbers and distribution points are stored in the ERP system and are quickly accessible. This allows the manufacturer to contact the retailer or customers quickly and set about a food recall. In the case of a contaminated ingredient batch, your ERP system accurately tracks any and all cases where that batch of ingredients was used, again enabling a company to recall the affected products and batches quickly and efficiently.

Forecasting and Planning

The disconnect between sales, production, and distribution on what should be produced, when, and where it is needed, is a common challenge for the food and beverage industry. Besides the fact that holding stock is expensive, high stock holding levels are also often not possible because of the expiry date issue on F&B products- making supply even more tricky in F&B. It is key to make each aspect of the business as efficient and as interconnected as possible. This is where a good ERP system is essential. The very interconnected nature of an ERP system allows each department to be notified immediately on sales forecasts, production schedules, out of stocks, raw material cost changes- and then plan accordingly.

Managing Inventory

‘Last in First out’ (LIFO) is a critical motto in the F&B industry.  Given that the products are for human consumption and nutrition- the raw ingredients and end products are not everlasting and naturally have expiry dates that need to be accurately managed- from both a safety aspect and a write-off cost aspect. A powerful ERP system’s ability to actively and effectively manage a company’s inventory is even more important in the perishable world of the F&B industry. Ensuring that batches have expiry dates that are actively monitored by the ERP system and that management are timeously alerted to any stock in danger of expiring, means that contingency plans can be made in good time. A good ERP system’s distribution module will also ensure that the oldest stock is allocated to orders first, and ‘younger’ stock after that.

Process Control

Food and beverage manufacturing is a repetitive and uniform production process- but often very complex. The manufacturing process is subject to strict quality control and is done at high volumes. Each end product must be exactly the same as batches before that and so a strict process and bill of materials must be followed- much like the recipe for a good cake must be followed to the letter to ensure a good outcome each time! An ERP’s Bill of Materials (BOM or product structure or recipe) is paramount to the quality and accuracy of F&B production.

The Food and Beverage is a challenging environment with seasonality, food control, stock management, and raw material sourcing all being factors that make it essential to have a strong ERP system. It helps companies juggle all the balls, and ensure that safe and high-quality product reaches the consumer.

• ERP for the Food Manufacturing Industry

 



ERP for the Food Manufacturing Industry

Achieving the desired results with Enterprise Resources Planning (ERP)

To simplify and illustrate the purpose of Enterprise Resources Planning (ERP) in the food manufacturing industry, let us look at an example of baking a cake.

To make a cake, we need to start with the recipe. The recipe contains the list of ingredients needed to put into the cake. The instructions of the recipe define the method on how to combine the ingredients and how to bake the cake.

There is more involved, however. The demand for making the cake comes from the request or desire from the family or friends. The cost of the cake is determined by the cost of all the combined ingredients, time spent as well as the equipment and electricity that was used. The assembly and manufacturing are determined by the skills. The return on the final product is the satisfaction derived from the gratitude and enjoyment of the people that ate the cake.

So how does this relate to a business and ERP on a larger scale, and in business terms?

• The product is the cake
• The base cost of the product is the cost of the ingredients.
• Manufacturing Costs comprise of the labour or time taken to produce the cake.
• Examples of additional expenses are
  o    Electricity
  o    Initial equipment costs
  o    Premises rental
• The return is the money received when the product is sold.

Terms used in business would then be:

• Marketing
• Sales Orders
• Procurement
• Bill of Materials
• Manufacturing
• Sales
• Delivery

Bill of Materials (BOM)

The Bill of Materials is the list of all the ingredients (raw materials) which are needed in order to manufacture the product.  This is a vital component in the manufacturing process where it links to various steps:-

• Sales Orders. Once a Sales Order is captured for a product, the quantity of raw materials needed to fulfil the sales order can be calculated by using the Bill of Materials.  This feeds into Material Requirement Planning (MRP) where production schedules can be organised depending on the capacity and availability of raw materials.
• Procurement. By taking the quantities of raw materials available and calculating shortages, the system can suggest the necessary Purchase Orders needed in order to facilitate the fulfilment of sales orders. By using minimum and optimum stock levels, purchase orders can be streamlined to avoid out of stock situations.
• Manufacturing. During the actual manufacturing process, picking lists can control the stock issues from the warehouse. Problems in the manufacturing process can be identified by discrepancies in normal stock usage and the actual. Furthermorecosts of raw materials can be monitored, flagging any excessive costs increases.

The Importance of Batch Number Tracking

Batch number tracking is a method used to track raw materials and finished products that are used or manufactured. The purpose of this is to keep track of the raw materials and finished products so in the case of some sort of quality issue, the actual products or, in the case of raw materials, the products that were manufactured using those materials, can be identified and their location can be established.

Another important factor in the food manufacturing industry is the expiry date or shelf life of products. These are managed and controlled by means of batch numbers. A batch of products (raw or finished) will be allocated a unique batch number and an expiry date will be allocated to this batch. It is then easy to monitor and control when products have passed their expiry date or shelf life.

Batch numbers allow products to be traced through the whole process, from procurement from a supplier, all through the manufacturing process to sales invoice and delivery to the customer.

With this information that can be retrieved from the ERP system, all products that are within the affected batch may be easily identified and if necessary allowing for the recall and replacement of the affected products.

This goes a long way in providing product quality control and customer satisfaction. Customer satisfaction and care are extremely important for future sales.

What is all that to do with Enterprise Resources Planning (ERP system)?

An ERP software system is an extremely valuable tool for the company in the food manufacturing industry. It ensures the whole business process is efficient and streamlined and as a result, profitable.

Because, with an ERP system, all the data is integrated, then all the different areas of the business processes are linked and information is available from a single source point across all areas of the business. Different areas of a business do not operate in isolation from each other. They are interdependent. The more seamlessly information is shared across all these various areas, the more efficient the whole business will perform.

Below is a brief outline:

1. Marketing

• Customer Relation Management (CRM)

2. Sales Orders

• Financial (Pending Cash flow and Sales)
• Material Requirement Planning (MRP)

3. Procurement

• Purchase Orders (According to demand based on sales orders)
• Financial (Accounts Payable, Banking, Financial Statements)

4. Bill of Materials

• Individual Product Requirements relates back to Purchase Orders

5. Manufacturing

• Production
• Time Sheets
• Work in progress
• Batch Number Tracking.

6. Sales

• Financial (Invoicing, Product Demand, Profitability, Accounts Receivable, Banking)

7. Delivery

• Vehicle Loading, Logistics

An ERP system integrates all these areas (and more) of the business.

Areas of control and feedback in the business using ERP

Closed-loop systems require that functions and processes need to be checked against tolerance levels setup for the correct functioning of a System. A business is an ever-changing entity that needs consistent feedback and checking against either a business plan or planned growth.

Feedback and who gets the feedback is important. Each area of a business should able to provide feedback to the various heads of departments

The heads of each of these departments can then view the feedback results from the ERP system and then take the action required to maintain the goals set for each department.

• ERP For The Engineering Industry

 



ERP For the Engineering Industry

Enterprise Resource Planning (ERP) in the engineering industry poses its own unique challenges.  More so if your environment is an Engineer To Order (ETO) as opposed to a Made to Order (MTO) one. It is important to have a good grasp of what is the difference between the two environments to understand the underlying complexities.

ETO vs MTO

ETO is a methodology employed to boost sales and improve margins for those companies with customers who need solutions made to fit their own unique environment. It begins with selling product concepts that don’t have fixed designs and are expected to result in a new, unique end product. This could be any product, from enterprise software applications to special aircraft/vehicles to a pair of shoes. Engineers will often not know the final requirements, materials or design until other primary ideas are agreed upon.  The final product is conceptualised in broad brushstrokes and, for want of a better phrase, reverse engineered down to how (and with which materials) it is actually going to be made. It is a process that requires a greater degree of creativity on behalf of the manufacturer and a close relationship with clients is necessary to ensure a product that is unique.MTO environments, on the other hand, normally have a selection of fixed designs and specifications already.  Although there may be some variation in design or materials, the bulk of the concept is already materially in existence.

ERP and the ETO Workflow

Most manufacturing design processes are fairly iterative, ETO even more so.  So whichever ERP system you choose to implement, ensure that it supports an iterative process rather than a pure linear one.

A good ERP system should be able to support most of the following steps in the ETO workflow

Initial Conceptualisation

The basic conceptual ideas and requirements are gathered from the customer and documented.

Sales

A sales order is agreed upon between the client and the manufacturer. This will include quoted costs, estimated delivery dates, and other basic information like an initial work breakdown structure (WBS) document. A WBS document defines and assists to track the project outcome and all components needed to create it. Costing is usually based on actual costs related to past similar projects with a contingency amount catered for. This generally includes consideration of reworks and scrap which may be written off.

Detail out

This involves the further definition of the project team and management assignments, departmental labour/fabrication, re-scheduling, anticipated resources, acceptance and release of the WBS to establish and coordinate project activities. This should be done with due consideration to other current and anticipated projects.

Design begins

Research and development begin work on product realization, usually initiated by an advance payment as part of the payment structure as agreed with the customer. Integration between the CAD (computer-aided design) and ERP (enterprise resource planning) software should be as seamless as possible to facilitate the flow between the design and manufacture phases.

Procurement

A basic bill of material (BOMs) covering all elements is created to satisfy initial requirements. Work orders (or sub-recipes/BOMs) for each component are planned in sequence. It is important to note that many customers will require product tracking; that is, the origin, specification, and batch number of every lot of materials used, in order to ensure future reproduction or identify the source of material flaws or an unacceptable quality of finished components. Other important aspects of product tracking are for an end product warranty or product recall purposes.

Milestones

Project milestones are firmed up and the client billing plan finalised. A deposit or down payment should be received to launch project development but may be adjusted in final invoicing.

Confirmation

Receipt of payment and approval for the go-ahead of lead-time components as each milestone is realized.  It is imperative to have the progress acknowledged by the customer and signed off.  It is not enough to accept progress payments as proof of acceptance.

Material Requirements Planning (MRP)

Planned orders (or sub-recipes) for all required materials and elements are detailed and implemented across the complete revised BOM.

Assembly

A preliminary assembly of components and confirmation of production approval. Typically another advance payment is made.

Delivery

Delivering of components and final assembly/installation, usually at client premises.

Trial period

An agreed snag list may have to be actioned. After the customer has tested and accepted the product, final payment and contract settlement are made and documented.

Review

The manufacturer conducts an analysis of cost, delivery progress, and profit through documentation and reports related to the project.

The Omni Accounts Job Costing module together with BOM and product tracking functionality within Omni ERP Accounting software fulfil many of the ETO workflow requirements.

Protect Your Intellectual Property

Lastly, a reminder about an area that is often forgotten or where controls are very slack. Often in any manufacturing environment, cutting edge designs, ingredients and/or unique processes are used.  Due consideration to the documentation and protection of this intellectual information must be given and safeguards put in place to protect it.  Not only must the information be protected from outside access but controls must be put in place internally so that a disgruntled employee cannot make off with the information and sell it to a competitor thus destroying the company’s competitive edge.

Ensure that the ERP system chosen takes this into consideration.

With Omni ERP Accounting Software functionality, selectively tailored for you, you can add powerful tools for managing your business effectively.

• What is a Manufacturing Business?



Manufacturing Business Definition

A simple definition of a manufacturing business is one where the company buys stock, commonly referred to as Raw Materials, and combines these stock items in order to make different items which are then sold, commonly referred to as Finished Goods.

A manufacturing business has various components which need to be taken into account when deciding on the selling price of their Finished Goods items. Essentially, these components are the cost of the Raw Materials, the cost of the labour, the cost of the overheads of the business and the cost of any outwork that may need to happen in the manufacturing process.

The cost of the Raw Materials, Outwork and Labour are what make up the Cost of Sale value, which in turn gives the Gross Profit figures. The overhead expenses are generally then deducted to arrive at the Nett Profit figure.

In a manufacturing business, it is extremely important to have good control over the costs and management of the stock which makes up the Raw Materials. Ensuring that Raw Materials are purchased at the best possible price is obviously important. However, factors such as stock shortages and overstocking are equally as important. Stock shortages impact the efficacy of the manufacturing process and the ability to supply the Finished Goods stock.  Overstocking impacts cash flow and ties up monetary resources. Stock shrinkage is also a factor that reduces profitability and often results in stock shortages.  So for the manufacturing business, careful monitoring of these factors is essential to ensure that the cost of the end product being sold is kept as constant as possible so that the expected profit margins are achieved. Care needs to be taken that this attention to the cost of manufacture is not taken to extreme measures which can result in an inordinate amount of time and effort being spent on monitoring low-value cost items.

The software which manages Stock or Inventory Control will assist enormously in monitoring costs. Depending on the complexity of the manufacturing process, Bills of Materials (BOMs) can be created which make tracking the impact of changing Raw Material costs much easier. These BOMs can often incorporate a labour factor which increases the actual cost price accuracy.

MRP (Material Requirement Planning)

MRP (Material Requirement Planning) is also an important factor for a manufacturing business. This is a process where the Raw Material stock levels are monitored, to ensure stock availability for the required Finished Goods to be manufactured. This entails looking at what needs to be manufactured and by what date, ensuring that there the Raw Materials levels are sufficient to achieve this and providing suggested reorder quantities. This is often managed by using minimum and optimum levels for each stock item.

The trigger to manufacture Finished Goods stock will depend on the business type. Some businesses will manufacture only on receiving sales orders from customers, some will manufacture to replenish stock holdings in dispatch areas or on the shop floor. Often there might be a mix of these. Some businesses may manufacture a range of standard Finished Goods items, others may manufacture mostly custom made items. Each of these will require different management. For example manufacturing mostly custom made items will benefit from Job Costing software functionality, which tracks the costing on each job being manufactured. Manufacturing to replenish stock holdings requires software that can handle costing and control of manufacturing batches. In this type of environment, it is also important to take into account possible seasonal changes in demand as this must be taken into account when managing Raw Material stock levels. It is vital for a business to have enough Raw Materials to be able to manufacture for high sales demand but also not to carry excess Raw Material stock in times of low sales.

Enterprise Resource Planning (ERP) software

Manufacturing control is part of many ERP software applications. There are stand-alone software applications but having a fully integrated solution is far more advantageous as there is less duplication of effort in capturing information and far greater accuracy. Implementing a Manufacturing system in your business takes time and planning. Having a software solution that is scalable is extremely useful as then the system can be implemented in stages.

Omni Accounts offers a powerful, extremely scalable Manufacturing solution which is part of its ERP functionality.