The Problem with Managing Tools, Parts, and Materials in your ERP – and What You Can Do About It

Not long ago, we worked with a manufacturer struggling with a serious scrap problem.

They were a make-to-order composite manufacturer building an expensive product with several critical components. The problem was – operators often used the wrong component. Components were similar and the specifics precise, so every mistake generated scrap, delayed the shipment, and left the sales team scrambling for new excuses.

It didn’t take long for the CIMx Application Specialist to discover the problem… the shop floor was trying to manage production with a bill of material in their ERP.

The ERP Doesn’t Understand Your Bill of Materials

The bill of materials is a critical part of the production process, but if it’s being managed in an enterprise system like an ERP, the system and the shop floor sees it more like a shopping list than a specification, and that’s a problem costing your business productivity and profit.

For manufacturing, especially discrete manufacturing, assets are more than just a list – they are critical specifications required in accurate and error-free manufacturing. But if a shopping list is all the shop floor gets from the ERP, you have lost production conformance. There’s no validation or control in how parts and materials are used in production – just a list that may or may not be referenced later in the production process.

The Struggle Is Real on the Shop Floor

We’ve seen it happen before – operators find costly workarounds for the gaps and problems the ERP is causing. For example:

• The shop floor hides tools they know they will need because the ERP isn’t tracking production or the assets used. It’s better for them to hide tools now than search for them later.
• Operators grab materials during kitting without even consulting the bill of materials. They’ve done it before and know what they’re doing.
• Tools and machines on the shop floor are out of calibration because the static bill of materials doesn’t track the shop floor or assets.
• Experienced operators work from memory anyway, and never even look at the plans or bill of materials because there’s no validation, no process conformance, and no control of work.
• There’s no way to specify tools and materials anyway, so mistakes aren’t caught till the end, and then it’s a problem for somebody else.

Many shop floors operate like this. Work is done and products ship, but it’s often in spite of production processes and planning. The ERP can’t support the conformance and control required for make-to-order manufacturing.

Process Control for Make-to-Order Manufacturing

The problem is the reliance on their ERP. The ERP can store information, but it’s not driving the conformance and control this manufacturer needs. The hands-off manufacturing approach of the system is fertile ground for mistakes and increased production costs. The shop floor tries to eliminate the errors, but they’re getting no support from the ERP.

The first step to solving the scrap problem for this customer is moving the bill of materials out of the ERP during production and into a production control system - Quantum.

During kitting, Quantum validates critical materials against the specifications on the bill of material. If the shop floor picks or tries to use the wrong materials, a simple barcode scan will flag the mistake and corrective action can be taken immediately. The problem ends there, minimizing the cost and impact on the schedule.

If necessary, conformance can be driven throughout the production process using pass/fail data collection and automated validation checks against the parts and materials specifications on the bill of material. The manufacturer can control the process and add necessary safeguards.

Problems are eliminated. The shop floor gets the support they need at every phase of production. The bill of material becomes a tool for error-free manufacturing and the foundation of conformance rather than a shopping list.

Contact CIMx today to learn more about Quantum and how you can turn a bill of material into a production tool that drives profit, and eliminates errors and scrap.