In order to compete in today’s market, manufacturers need to be able to optimize and maximize the use of the resources they have available. Older methods and tools to accomplish this won’t allow them to be competitive.
To be successful, many manufacturers are investing in ERP solutions like Microsoft Dynamics AX and focus on improving their business in the following areas:
1. Better Machine Utilization
Effective utilization of manufacturing assets is an essential step towards increased profitability. Microsoft Dynamics AX allows you to see in both data and graphical views to see all of the components of machine and resource utilization. The graphical tools also allow the planner to manipulate the schedule in a drag and drop environment.
2. Higher Labor Productivity
Having the ability to view all of your machine and labor resources and the load variable that apply to them, based on the current production schedule, allows you to re-purpose resources that may not be as busy as others. By using the resource capability functionality within Microsoft Dynamics AX, you are able to see where you have available resources to match the current business requirements. It can also be used as the basis to create a cross-training matrix to ensure that your production staff is continually gaining additional skills that are relevant to your production environment.
3. Reduced Inventory
By maintaining a properly balanced production schedule, you are able to gain tighter controls over your inventory levels. The days of driving a separate materials and production schedule are gone. With Microsoft Dynamics AX you are able to have greater trusted visibility into the true build schedule for your products. This will allow you to work on postponement strategies with your supply base to minimize inventory levels while still maintaining acceptable service levels.
4. Improved Responsiveness to Demand Changes
All of these capabilities help to make your organization more proactive and responsive. As your team acquires the skills to maintain a truly optimized production schedule, they will be empowered to manage a level of flexibility within the schedule. As everyone is able to trust the planning and scheduling information they receive, you will find that the collaboration between order management and production will improve. The ability to make trade-off decisions will be moved down into the organization, minimizing the need for management involvement for the majority of demand change decisions.
All companies need to have the ability to make the best use of the resources available. In order to do this, you need to be able to assign the correct criteria to resources so you can properly assess the capability of your production plan. The starting point for all of this is the concept of theoretical capacity. The APICS definition of theoretical capacity is, “the maximum output capability, allowing no adjustments for preventive maintenance, unplanned downtime, shutdown, and so forth.” This feeds the more valuable measurement in the daily operation of the manufacturing floor, the rated capacity. The APICS definition for rated capacity is, “the expected output capability of a resource or system. Capacity is traditionally calculated from such data as planned hours, efficiency, and utilization.”
Microsoft Dynamics AX provides the tools required to help make this determination at the resource level. By defining the work centers, machines, people and corresponding capabilities that make up your production process, you are able to get a true picture of your production capacity and capability.
By Norman Carmichael, Manufacturing Practice Director at Columbus. Columbus is an award-winning Microsoft Dynamics ERP Partner, serving companies around the globe in the food, retail and manufacturing sectors.