In recent years, increasing costs and the continued threat from manufacturers in developing countries, particularly China, have driven manufacturers to maintain an ongoing focus on reducing costs and increasing efficiency. At the same time, customers have continued to demand better quality products, with more variety, and at a lower price.
To address these ongoing market demands, manufacturers have increasingly turned to "lean manufacturing." Developed by Toyota Motor Company in the 1950s, and adopted by global car manufacturers in the 1980s and 1990s, lean manufacturing embodies the concept that customer demand should drive production. Whereas historically, manufacturers created products in anticipation of having a market for them, lean manufacturing uses each sale of finished goods to trigger a signal for replenishment that cascades back through the manufacturing process.
Over time, the term "lean manufacturing" has come to describe any process improvements that eliminate waste and redundant activities anywhere within a manufacturing organisation.
In the 1990s, manufacturers sought to improve business process efficiencies in order to create a sustainable competitive advantage through investments in ERP software, such as Oracle, PeopleSoft, and SAP. More recently, manufacturers have shifted their focus to cost savings, searching for ways to use existing solutions more effectively.
One area that historically most ERP solutions have not managed effectively has been paper documents, which remain integral to processes such as shipping, distribution, financial accounting, and communication with the supply chain.
Managing Financial Documents
Today, many manufacturing companies are integrating document delivery and storage software into their ERP systems to enable them to share and store custom business documents across paper and electronic formats.
One such manufacturer is Advanced Composites (ACG), which designs and manufactures composite materials for products that range from Formula One race cars to aircraft aerofoils, for customers that include Boeing, British Aerospace, Jaguar, Jordan, and Maclaren International.
For ACG, it was critical to create invoices that complied with stringent customs regulations by including tariff codes, weights, measurements, and so on. Accuracy was essential since each invoice was worth several thousand pounds and should customers refuse to pay an incorrect invoice, Days Sales Outstanding and hence cash flow would suffer.
Working with systems integrator Pericom, ACG replaced previously separate order and accounting systems with IBS from K3, a new ERP suite that supported XML. This created a straight-through, automated order-to-invoice process. Intelligent forms management solution, FormScape V3 linked in to the new ERP system to enable ACG to design, produce, deliver, and manage branded orders, purchase requests, delivery notes and invoices.
Streamlining Shipping and Distribution Processes
As well as financial imperatives such as minimising DSO, manufacturers are also using document process automation solutions integrated with their ERP systems to meet international regulatory requirements and streamline their distribution processes.
For example, complex labels are often required to address US Food and Drug Administration and other international regulations. One of the largest manufacturers of lifesaving medical devices uses an integrated document solution as part of its production line to dynamically generate product documentation, packaging, and labeling for its devices. The company manufactures its devices in a wide range of configurations, each of which must ship with a large amount of detailed documentation as well as with very small and precise labels in multiple languages to ensure proper implantation. Additionally, the documentation must address FDA and international regulations that require devices to ship with information about the source and details of its manufacture. A document solution integrated with the ERP software enables the company to create content that supports all of these design, language, and format requirements and, at the same time, ensures consistent control and quality, regardless of system, printer, or location.
Using an integrated ERP/document solution also enables manufacturers to produce shipping labels that are customised to the needs of the customer or carrier. Integrator Litco Systems has implemented several such solutions. Company president, Luca Loria, gives this example: "One of our customers reproduces artwork on an industrial scale, for example, for large hotels. It sells this artwork through various channels. Each of these channels has different labelling and bar coding requirements. We helped them to bridge the gap between the manufacturing process and the delivery requirements by cross referencing the work order with the customer profile for each channel to create the label and bar code, specify to each customer and print them on specialised printers."
At a major health sciences manufacturing company, Litco implemented a FormScape application to deliver shipping documentation to 20+ couriers (FedEx, UPS, DHL, and so on) directly from the manufacturing application. Previously, the company filled the appropriate waybills manually. FormScape V3 now automatically processes a single XML data file that correctly identifies the appropriate courier company required for a specific shipment and populates the waybills directly from the sales order in the manufacturing system. Says Loria, "This provides a significant improvement in productivity and accuracy in the business cycle."
Improving Shop Floor Processes
Manufacturing companies are also using integrated document solutions to streamline processes on the shop floor itself.
When August Technology, a leading manufacturer of automated visual inspection solutions for the microelectronics industry, gets ready to build a product, it creates a work order in MAPICS, its ERP system, which lists all the required steps and parts. It then sends this output to FormScape, which uses sorting capabilities to create three outputs: a work order, pick lists, and strings of labels for parts.
Says Doug Larsen, database administrator for August Technology, "Sorting capabilities allow us to output pick lists and strings of labels in the order that the actual parts appear in the stock room so workers can pick the order or put labels on parts without backtracking. Using these labels means we don't misidentify parts so we're less likely to lose them. The sorted pick list gives us a more efficient work process."
In discrete manufacturing, the manufacture of a product is controlled by a work order, which is passed from one step to the next through the manufacturing process. To automate this process, manufacturers often include a bar code on the work order to make it easier for the ERP system to track job progress. The bar codes eliminate error-prone manual keying of data and enable faster data capture, improving shop floor efficiency. FormScape makes it fast and easy to create work order documents containing the correct bar codes.
Work orders are often accompanied by packets of related documents, such as certifications for raw materials, design documents, specifications, and so on. When manufacturing is distributed geographically or when portions of the manufacturing are performed by subcontractors, it can be easy to lose the documentation or to include the wrong documentation. An integrated solution makes copies of all necessary documents available online over the Web to authorised users, where and when they need them.
Litco, for example, has a large manufacturing client that uses FormScape to generate work orders from its purchase orders. FormScape then attaches related documents to the work order, such as blueprints, PDFs, technical drawings, and so on, and distributes them to the proper location via email, fax, or in printed format.
Automating Documents to Improve Efficiency
Lean manufacturing is about streamlining every aspect of manufacturing operations, both on the shop floor and off. While manufacturing organisations have used ERP solutions to simplify many processes, documents have remained manual. For a growing number of customers, integrated ERP and document solutions are now automating documents to improve formerly manual document processes in accounting, distribution, and on the shop floor and thereby further enhance the efficiency of their overall operation.
Paul Savage has been recently promoted to the position of Director of Channel Sales. His reponsibilities include overseeing the strategic direction and execution of FormScape's worldwide channel programs and initiatives including EMEA, PacRim, and NASA Channel.