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Growth and profitability — the ultimate combination of manufacturing goals. What will the second half of 2013 hold for discrete manufacturers? Just how big of a part can technology play?

Working with LNS Research and Microsoft Corporation, Fullscope is pleased to sponsor this informative webcast, one designed to highlight global manufacturing trends; how these trends can impact the US manufacturing sector; and the role technology can play in returning to growth mode sooner versus later.

Speakers for this event include: Matthew Littlefield, LNS Research, President and Principal Analyst; Melissa Cook, Microsoft, Senior Director and Global Manufacturing Industries Lead for Microsoft Dynamics; and Gil Garcia, Microsoft, Director Manufacturing Industries US Dynamics.

Planned topics:

•    What current global manufacturing trends indicate about the future of US manufacturing

•    How social media and mobile technologies influence demand and impact manufacturing production

•    Why manufacturers must focus on growth versus cost reductions, and ideas to get started using technology

•    How agility, innovation and empowerment of employees are the most important change agents within a manufacturing enterprise today

•    Why end-to-end process orchestration is key for achieving operational excellence efficiency

•    How discrete manufacturers can turn big data to actionable intelligence for improved growth

•   And much more …

For more information, speaker bios and to register, visit our website now

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The fascination with data continues to proliferate, just like data itself. “Big data” used to be considered a collection of data sets so large and complex that it was difficult to process using on-hand database management tools or traditional data processing . Now it is seen less as something to grapple with and more as a source of tremendous power that can maximize value, identify new revenue streams, and ensure advantages in an increasingly competitive global marketplace. While this may be true, and the growing concern with big data understandable, there’s a more manageable and often underutilized source right in the heart of most enterprises: ERP data.

According to Aberdeen, Enterprise Resource Planning (ERP) solutions are an integrated suite of modules that form the operational and transactional system of record upon which any business is based. “As such, ERP systems contain large amounts of data that can be used to gain visibility into business operations and underpin informed management decisions,” says the introduction to a recent study by the analyst. “Often there is difficulty in finding the data needed and analyzing it to gain insight. Data may be siloed or inaccessible to business users, preventing these organizations from gaining the full return on investment (ROI) from their ERP implementations.”1

One of the major reasons many ERP implementations have not lived up to expectations is that they were employed as a software project per se, rather than as a business improvement tool.2 Failure to fully understand the value of ERP data may be a part of this misapplication. “Information is the lifeblood of the organization, and the primary goal of ERP is to provide decision makers with the information that they need in order to make properly informed decisions; to provide a solid foundation of truth,” notes Sean Culey, a member of the Supply Chain Council’s European Leadership Team. “Accurate and timely data can enable rapid, incisive decision making, whilst poor and inaccurate data slows down everything, [creating] excess management, duplication, and indecision. Many businesses use tools like ERP as transactional recording devices to capture what they have done, rather than pour their intelligence into the system so it can plan what they should do.”3 As a result, many users say that ERP presents information they disagree with, constraining the flexibility of their supply chains.

In contrast, those who are leveraging their ERP data, integrating it with other enterprise systems, and delivering it in a timely and understandable manner to decision makers are seeing significant benefits in operations. “It comes down to getting the data stream right, and that data stream comes from our ERP, CRM, and other enterprise systems,” says Doug Sheffield, vice president of information technology for Dallas, Texas-based Heritage Bag Company, the largest manufacturer of industrial trash bags in the United States. “We’re able to take that data stream, whether it’s customer, sales, production or manufacturing data, and make it available throughout our organization. By consolidating the data, we get a holistic view of where we are as a company; then we can see the different areas in which we can work, improve, and become more efficient.”

According to Sheffield, ERP provides a single trustworthy data source. Without that, companies struggle to:

  • Close out the month properly.
  • Meet compliance requirements.
  • Plan production accurately and effectively.
  • Understand what has shipped versus what has been billed.
  • Communicate across multiple facilities, be they plants or corporate offices.
  • Establish communications for visibility into all areas of the business from all areas of the business.
  • Make well-informed decisions.

To facilitate these essential activities, ERP solutions have evolved different ways of delivering data. Analysts note ERP’s expanding footprint, indicating its value will grow as long it continues to evolve to meet customer needs, and that those customers realize the value of this data.  These goals can get lost when these users become fixated on what they run day-to-day.4

Up Next: ERP Data Part 2:  Four Manufacturers Who Get It:   Or Download the Entire White Paper Now:  http://bit.ly/fs_erpdata

  1. “ERP Plus BI: Maximizing the Return on Your ERP Investment,” Aberdeen, 2012.
  2. Cutley, Sean, “Ensuring the ROI from ERP Has a Bigger ‘R’ than ‘I,’” The European Business Review, October 2012.
  3. Ibid.
  4. Goulart, Karen, “Other IT Systems May Get the Buzz, But the Value of ERP Remains,” TechTarget.com,  February 29, 2012.

http://bit.ly/reilyaxvideo

Fullscope customer/food and beverage manufacturer Reily Foods Company uses Microsoft Dynamics AX ERP software, for usability, flexibility and support for unique food manufacturing needs. With Microsoft Dynamics AX, Reily is able to have real-time access to data, plus the information it needs to support food safety and sustainability practices, including traceability for product recalls. Watch this short video and learn more …

For food and beverage manufacturers, by-products are the unfortunate leftovers of producing valuable products and co-products. By definition, by-products are the manufacturing outputs that can’t be resold, repurposed or reused. They’re refuse.  By-products don’t add anything to production except effort and cost. It’s tempting to just ignore them and simply write them off as the cost of doing business.

But we all know by-products don’t just go away, and in most cases food and beverage manufacturers understand they ignore by-products and their costs at their own peril. There’s a price to pay. In some cases, the costs of not dealing with by-products properly are regulatory, environmental or safety problems and penalties. In other cases, the costs are less onerous, usually not knowing the true costs of production or misstating your real margins on products and co-products. Most food and beverage manufacturers must deal with both the internal and external impacts of producing by-products.

Fortunately, Microsoft Dynamics AX 2012 for the food and beverage industry makes identifying, tracking and accounting for by-products a straightforward, well — by-product, of planning and managing production. With a little preparation and forethought, Dynamics AX will help you capture critical by-products information during manufacturing and use that information to calculate the costs of by-products and handle any required regulatory reporting.

To effectively manage by-products in Microsoft Dynamics AX, you need to follow a three-stage process:

  1. Identify by-products resulting from the manufacture of a product, gather the data that describes them and define these by-products in Dynamics AX;
  2. Systematically capture production data as you manufacture products and co-products and produce the by-products; and
  3. Pass the collected data to the appropriate Dynamics AX functions, evaluate it and incorporate it into internal analyses and external reporting.

While these steps over-simplify things a bit, it’s basically the same process you follow in defining and using any set of data within Dynamics AX. Each of these steps includes a number of subsidiary tasks and involves decisions and potential mistakes that could affect the quality of the resulting information and external reports. Fortunately, none of the tasks or decisions is very difficult once you understand your data, your requirements and the steps you need to follow. Read the rest of this entry »

When industrial equipment manufacturers evaluate ERP software, one of the key categories on the checklist is quality management. There seems to be a consensus that any Enterprise Resource Planning (ERP) system worth its salt ought to include the ability to plan and manage quality. While the quality management capabilities of Microsoft Dynamics AX compare favorably with those of competitive systems, taking a hard look at why quality really matters in Industrial Equipment Manufacturing demonstrates some of the major reasons why Dynamics AX is the ERP system of choice for mid-market IEM companies.

Quality is been a common theme in most manufacturing segments since the rise of Japanese automakers and the introduction of the Toyoda Production System in the 1980s. Japanese automakers dominated the American market first on price and then on the reliability of their cars. When Ford Motor Company declared “Quality is Job 1,” it reflected the realization of many American manufacturers that quality was mechanism that drove the Japanese competitive engine. Since that time the concept and the imperative of quality has evolved considerably. Whether it’s called Total Quality Management or Six Sigma or something else, the focus on quality has become ingrained in American manufacturing management doctrine and methodology. As a result, we include a quality management evaluation category on our ERP checklists and believe the ERP system we select will somehow help us do a better job of producing quality product.

Customer success stories demonstrate that IEM companies selecting Microsoft Dynamics AX often improve in managing quality and producing quality product. It’s possible to learn a great deal from the successes of others, but it’s also important to understand how to translate that learning into success for your company. As we said, taking a comprehensive look at why quality matters in IEM can help you evaluate how you can improve the quality performance of your company and understand why Microsoft Dynamics AX ERP software for industrial equipment manufacturing is a key tool in helping your achieve your quality goals.  Read the rest of this entry »

Microsoft Dynamics AX 2012 Is Coming on September 8 … Be the First to See It.

The world is risky enough—if your company is considering a new ERP system, consider the safest bet on the market: Microsoft Dynamics AX 2012.

Join us live on September 8 and see the new safe and powerful ERP system for discrete and process manufacturing and distribution companies in one of these cities:  Minneapolis, Dallas, Irvine, Portland, Charlotte, Grand Rapids or Cincinnati.  We’ll also hold launch events in Atlanta on September 29 and Boston on October 4.

Each launch event will be held at the local Microsoft office in each city, and will feature Dynamics AX 2012 highlights from Microsoft CEO Steve Ballmer, insights from Gartner Group ERP Analyst Nigel Montgomery, plus the opportunity to see AX 2012 in action from both a high level and industry-specific perspective.

All attendees will be able to take advantage of special Dynamics AX 2012 offers from event sponsors Sunrise Consulting and Edgewater Fullscope. Each attendee will also be registered to win free Xbox Kinect system.

If you have any business manufacturing processes that are causing you enough pain to consider looking a new enterprise resource planning system within the next two years, come see what is in Microsoft Dynamics AX 2012 and how it may be able to help make your job easier and your company more profitable.

Visit http://bit.ly/axlaunch to learn more or register.

Fullsope’s new series of Process Accelerators makes it easy for manufacturers to employ potency pricing procedures.

With potency pricing, a manufacturer sets purchase pricing and inventory value based on the received material’s active concentration (i.e., potency) or some other quality-controlled values (fat content, protein content, etc). This is a key requirement for process industries where low margins require costing and margin analysis at the lot level. It’s required in industries such as dairy and feed which measure and pay based on butterfat content or protein content, and is standard business practice for pricing precious metals. This is equally applicable to any process industries company that manufactures or distributes high valued, active ingredient based products.

Common enterprise resource planning (ERP) solutions price materials according to linear pricing schedules, but in process industries, multiple factors come into play in determining compensation for a supplier. The Fullscope Process Accelerators:

  • Provide a flexible formula that allows companies to pay suppliers based on actual quality results for potency.
  • Assign actual inventory value for each inventory lot that is potency-controlled.
  • Help record more accurate margins based on the actual potent value of materials sold or consumed.

Using milk again as an example, a typical dairy producer will send a tanker with paperwork specifying that this tanker of milk has a certain stated butterfat and protein content. But the manufacturer, the buyer of the milk, wants to run their own tests because the agreement is that payment will be made based on the manufacturer’s quality analysis result. Or, payment could be based on the average of the milk vendor’s value and the manufacturer’s value: the buyer and supplier can meet halfway.

A typical ERP solution pricing scheme won’t address that scenario.

Fullscope Process Accelerators use an advanced pricing formula that gives the manufacturer the ability to define which characteristics are going to drive the price. It can be the concentration alone or multiple characteristics of an incoming shipment. The formula applies equally well to chemicals, food, or metals. The system will calculate a price and hence the inventory value based on those user‑defined characteristics.

A large part of our Process Accelerators’ elegance and utility comes from flexibility: even though the metals industry will use a different formula than those used by the dairy or chemical industries, each can build their own formulas easily.

Lot Genealogy and Traceability

Lot genealogy is the ability to automatically transfer properties of a raw material lot to a manufactured item’s lot. An effective lot genealogy system must transfer key lot characteristics. For example, a manufacturer may use a metal coil that has a certain alloy content and mechanical strength. If this coil is cut into a smaller one, those properties need to follow the smaller coil as well. Sometimes this is referred to as parent-child inheritance. A manufacturer wants the characteristics from the original coil to carry over into the product that ultimately contains the small coil. They also want to be able to transfer shelf life information. There are rules about combining materials with different shelf lives into one package. One should take the earliest individual material shelf life and make that the expiration date for the overall product.

Genealogy applies to two things: first, the attributes or characteristics, and second, the shelf life. Both need to be carried over. In a formula where the raw material defines the shelf life or the characteristics, the finished good, which will consume the raw materials, needs to inherit the properties of its raw materials.

Here’s a bit of terminology: an end item is a typical formula where something is consumed and made into a finished good. A co‑product occurs when an end item is produced, but there is also a co‑product that can be used for some other purpose—either to resell or to use in another production process. Take, for example, a jumbo roll of paper 60 inches wide. A manufacturer may cut five 11-inch rolls out of it, leaving 5 inches of trim. That trim is a co-product. It’s still good and can be reused or re-blended to make more paper.

Fullscope Process Accelerators set lot genealogy at the formula level and allows inheritance for both end items and co-products.

Product Sequencing

The Process Accelerators also add key capabilities to Dynamics AX in this arena. It adds functionality that considers demand for a product having a certain characteristic such as color, flavor, or package size that can prove problematic if produced out of sequence; or, conversely, it may prove more cost effective if sequenced properly.

Consider paint production. Sequencing from light to dark (white-yellow-green-blue-red-black) can minimize cleanup and setup during changeover. The Fullscope Process Accelerators allow manufacturers to define an optimum sequence based on prioritization of simple or complex characteristics of the product.

So What’s the Takeaway?

Process manufacturers focus their business activities around the development, manufacturing, assembling, and selling of products and the delivery of related services. The defining characteristic of process manufacturing—namely, that once a process manufacturer produces a product, that product cannot be reduced back to its constituent parts—makes control of the manufacturing process critical and risk-intense.

By providing more powerful functionality to Microsoft Dynamics AX ERP, Fullscope Process Accelerators help strengthen the already strong position of Dynamics AX among mid- to large-sized process manufacturers in the chemical, pharmaceutical, food processing, pulp and paper, metals, and cosmetics/health and beauty segments. It does so by leveraging three key areas—potency, lot genealogy, and product sequencing—to mitigate risk, provide more efficient and effective control of the manufacturing process, and improve both asset valuation and margins to better compete in a demanding global marketplace.