1. You haven’t performed a review of your mfg operations in over a year, if ever
Your shop consists of hundreds, if not thousands of processes. These processes can be done more effectively by surveying the many methods that are available, and then selecting the most effective method. Most processes are setup in the heat of battle, throwing resources and processes together in a quick hurry. Now is the time to refine those processes with the latest in technology and methods, such as lean, Kanban, RB-ERP, 5s, Kaizen, mobile data collection, MES and the like. Your ERP vendor can help you to analyze your environment, and to structure processes that will maximize your results.
2. You haven’t mapped your processes for over a year, haven’t updated the value stream map
Things change. Every day, your customers request new things, and the shop is continually evolving with new people, machinery, and processes. If you don’t continuously map the value stream of your processes, the seven wastes begin to creep in. And, before you know it, your shop is inefficient, sloppy, and performing poorly. Your queue times lengthen, buffers increase, and safety stock soars. Beginning and maintaining a Kaizen initiative is the answer to keeping up with the continual changes in your shop. Your ERP vendor can provide the fresh insights to define your problems and recommend the appropriate solutions to keep you ahead.
3. You are struggling to keep up with your competition
Now, this is more symptomatic than prescriptive, but is the true indicator of deep problems. Customers choose vendors for very pragmatic reasons. You need to react to this situation quickly, as the root problems are apparent to your prospects, causing them to turn to your competition. Your ERP vendor can you help to identify those problems that are causing your performance to slip, no matter where that is in your organization.
4. You have lost customers in the last six months (Delivery, quality, price or…)
This problem deals more with losing customers due to your performance, rather than your comparison to your competition. You may well be meeting competition on a general level, but losing customers due to spot problems in delivery, quality, or other details of fulfilling their orders. The solution to this problem lies in the establishment of a good performance management system, along with an alert system that brings to your attention any deviations from normal performance.
5. Your margins have been slipping
In this situation, you are retaining your customers, but see your margins slowly slipping away. You see a few glitches in performance, but can’t understand the underlying dynamics that are causing the problem. Generally, this situation occurs in operations where the performance management is not tied to overall company performance. The root cause is buried in a dearth of individual reports, with nothing to consolidate them into an understandable conceptualization. Your ERP vendor can help you to set up a dynamic performance management system that keeps you in touch with activities from shop floor to top floor, and how they impact your results.
6. Your inventories turns are declining, and your obsolescence is growing
There are numerous causes of this problem, including customer demands, supplier policy changes and the like. The most dangerous, however, is ERP creep; the scourge of the shop. With this problem, the customer and supplier have no contribution. The problem is created internally and caused entirely by the well intentioned people in your shop, and the management mandates that have been issued. It works like this. Management demands a 98% fill rate. In the shop, however, the equipment maintenance budget has been cut to meet a management cost cutting program. The equipment begins to break down more frequently, and the shop needs to find a way to meet the fill rate goal. The answer? Pre-build more inventory to cover when the equipment fails. The fill rate stays high, the cost cutting of maintenance is no longer a problem, and everyone is happy. You, however, are saddled with high inventory levels, low cash, and low profitability. These hidden costs can occur in many ways though out the shop. Your ERP vendor can help to identify and solve these problems.
7. Your customer fill-rates are slipping
We all know this one. The customers are continuously on the phone, and threatening that if you can’t get this problem under control, you will be fired. Unfortunately, they are dead serious and your business hangs in the balance. Fill-rate problems can have many causes. Some of these include supplier problems, equipment problems, quality problems, and bottleneck problems. Fortunately, your ERP vendor can help you to find the true source of your problem and work with you on the solution.
8. You don’t know day to day if you are on-track to accomplishing your business goals/plans
This is similar to the profit margin problem listed above. However, it pertains to a much broader perspective. You need a defined system that advises you how you are performing to your goals, plans and expectations. Performance needs to flow from the shop performance to the financial results, to the business plans, and on into the business strategy. At a moment’s notice, you need to know what, where and who are not performing. Your ERP vendor can help you to setup a structured system to keep you in touch with daily activities and how they are meeting or missing your targets.
9. You don’t typically know about problems until it is too late
Another problem of a fragmented system is the lack of awareness with problems occurring as they are happening. In this environment, it is not uncommon for quality problems to be found at the customer (instead of in your shop), for delivery problems to surface on the day of shipment, and for cost overages to appear at the end of the month (instead of when you could still fix them). Your ERP vendor can show you how to setup your systems to provide your alerts at the time of the initial problem.
10. Your managers have become firefighters instead of managers
In the end, you need to ask whether your managers are making contributions to your financial and operational health, or whether they are too busy fighting desperate problems to keep the doors open. A good ERP system along with some deep knowledge to implement it can go a long way to an executional success, rather than a chaotic fire fight.