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ROI

Using Enterprise Resource Planning in Your Machine Shop

June 20, 2014 / , , , , , , ,


According to research quoted in a recent article from MetalForming Magazine, 45% of manufacturers list “improving business execution” as a primary goal for 2014. In today’s uncertain marketplace, this isn’t much of a surprise. In short, agility is key.

However, manufacturers are finding that achieving this goal is a lot harder than it sounds. As the MetalForming article states, companies need to start by clearing “some common hurdles, most notably delays in decision-making due to a lack of timely information, and an inability to quickly react to change.”

This is why more and more companies are focused on data-driven manufacturing. As stated in the 2014 Industrial Metal-Cutting Outlook from the LENOX Institute of Technology (LIT), best-in-class machine shops are forming strategies, making decisions, and optimizing their operations using hard, quantifiable information. Anything else is just guessing.

The challenge is finding an efficient way to not only gather “timely data” but also store it, interpret it, manage it, and share it across your entire organization. Odds are you don’t have a fully staffed IT department waiting in the wings.

This is where business management software like Enterprise Resource Planning (ERP) can be helpful. ERP software is typically a suite of integrated applications that allows an organization to efficiently manage their business and automate back office functions. It combines all facets of an operation, including product planning, development, manufacturing, sales and marketing. It can be managed in-house, or as is the case with many machine shops, purchased as software as a service (SaaS).

Why ERP?
Top-tier manufacturers and large enterprises have been touting the benefits of ERP systems for years. They can improve productivity, enhance cross-functional communication, and speed the “quote to cash” cycle. Even so, smaller shops often shy away from these systems because they can also be expensive, complex, and far too often, fail to provide bottom-line results.

That’s not to say you should write off ERP systems all together. It just means a little research is in order. Below are a few resources we gathered to help you dig a little deeper into the benefits ERP can offer your machine shop, along with a few pointers to ensure success.

ROI

Building Strategic Supplier Relationships that Benefit Your Industrial Metal Cutting Organization

June 15, 2014 / , , , , , , , , , ,


Most manufacturers understand that they are only as good as their supply chain. Quality starts well before a product enters the doors of a production facility.

Industry leaders, however, are finding that with a little strategy, the supply chain can add a lot more than a quality service or product. When positioned correctly, they can add value.

A recent report from Tompkins Supply Chain Consortium confirms this philosophy. After polling 172 supply chain professionals, a strong 80% of respondents reported that they felt that the supply chain is an enabler of business strategy. A majority of companies also felt that supply chain is a source of business value and a competitive advantage. This, along with the report’s other findings, led the Consortium to conclude that the importance of an integrated supply chain and overall business strategy cannot be ignored. “The better the level of alignment is, the more likely it is that companies are achieving their objectives for cost reduction, customer service, and other metrics,” the report stated.

What’s interesting, however, is the report revealed that a fairly high 35% consider the supply chain a standalone function. This indicates there still is some work to be done. Positioning and treating your supply chain as trusted partners—not just as independent service providers—can be an effective strategy in helping you achieve company goals. For instance, if your goal is to increase productivity, perhaps your suppliers can offer troubleshooting expertise and even training in specific areas of your operation. Or, as was the case with leading metal service center Aerodyne, they may even be able to provide useful, practical tools like free software to help your operators work smarter.

As this Forbes article states, long-term, worthwhile suppliers should treat manufacturers as more than just clients. They, too, should treat you like a partner, which means they should be willing to offer more than one-dimensional service. If that isn’t the case for your organization, it may be time to reevaluate your supply chain or, even more so, reevaluate how you are utilizing your supply chain.

How do you position your supplier relationships to bring value to your company? A recent white paper from the LENOX Institute of Technology offers the following strategies:

In the end, today’s competitive marketplace requires manufacturers to focus more on value than on cost if the objective is long-term success. While cost-effective products provide short-term benefits, aligning the right suppliers with your business strategies—and then leveraging their services to achieve company goals—will likely offer a greater ROI than any product ever could.

ROI

Rethinking Customer Service in Your Industrial Metal Cutting Organization

May 28, 2014 / , , , , , , , , ,


What does it take to keep your customers satisfied? In today’s demanding market, most industrial metal-cutting companies would say high quality, competitive costs, and on-time delivery. However, those have always been the hallmarks of any good manufacturer, and some might argue that the last few years weeded out any companies that even remotely lagged in these key areas.

So, what does it really take to keep your customers satisfied? Or, as this Inc. article points out, perhaps the better question is whether or not customer satisfaction is what you should be trying to achieve. According to the Inc. author, customer satisfaction is “tepid and minimal”, has “no bearing on future buying decisions,” and can be “safely ignored.”

Instead, manufacturers should be spending their efforts building some level of customer loyalty, the article argues, as well as what the Inc. author calls “product evangelism.” In short, the author maintains that companies need to focus less on simply satisfying customers and, instead, focus more on: 1. bringing value that goes above and beyond, and 2. a strong brand message that is unique and relevant. As the article title suggests, that is how you develop a customer relationship that “trumps all the rest.”

The Inc. author isn’t the only one buying into this mentality. In recent years, many leading companies have endeavored to take their customer service to the next level, creating what consultant Lisa Anderson refers to as the “Amazon Effect.” From no-hassle refunds to 24-hour availability, Anderson believes that manufacturers and distributors have something to learn from the exceptional service standards set by Amazon. “It has become apparent that those businesses that leverage the Amazon Effect will thrive while the rest are left in the dust,” Anderson said in a recent article from Industrial Distribution.

How you “amp up” your customer service game will largely depend on what you already have in place, but the following are a few strategies to get you thinking:

ROI

Should Your Machine Shop Undergo ISO 9001 Certification?

May 20, 2014 / , , , , , , , , , ,


As the industrial metal-cutting industry becomes more competitive, a growing number of machine shops are looking for ways to differentiate their operations, whether that means offering value-added services or implementing the latest lean techniques.

One best practice that many of today’s leading shops tout is ISO 9001 certification. The standard, described in detail here, is based on a number of quality management principles, including a strong customer focus, the motivation and implication of top management, and continuous improvement. The basic goal of the standard is to help companies provide customers with consistent, good quality products and services, which, in turn, often brings business benefits like improved financial performance.

Metal Cutting Service, a specialty shop based in City of Industry, CA, has reaped the rewards of ISO certification, including improved productivity and quality. The company, featured in a series of LIT case studies, estimates that quality has improved 20 to 30% since it became ISO certified more than 12 years ago.

However, ISO certification isn’t a quick fix nor should it be taken lightly. Like any company-wide initiative, it requires time, money, and strategic planning. Here are a few points to consider before undergoing ISO certification:

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