Unless you’re a cash-heavy manufacturer with a sugar-daddy parent company, the latest and greatest technology has to pay for itself or it’ll never get past the CFO. But ebusiness can hold its own in the real world, and high tech doesn’t mean eliminating human intervention. Just try sending your materials planner on vacation and see how well the system runs itself.
Today’s return on investment equates to integrating systems that demonstrate value to your customers and in return, gives you a competitive edge. It also means incorporating lean manufacturing processes – a cultural revolution that analyzes processes and removes non-value added steps from your system.
“The philosophy isn’t new,” says Mike Smerdel, manager of eBusiness Solutions at CAMP. “But it’s gaining a greater degree of momentum in the manufacturing sector.”
Lean processes are just one of the tools that allows companies to raise the bar, set the expectations and see the value created by removing sludge from systems.
Smerdel says today’s leaders are looking for ways to better service customers and drive down the cost of doing business.
“If you do that well through your electronic interface issue, that’s where you’re really going to gain some traction,” he says.
The biggest bang-for-the-buck comes from giving customers what they couldn’t get through traditional systems, not just a Web site. People may browse your Web site once, but if it doesn’t give back something for their investment in time, it’s a one shot deal.
So consider the possibilities on, for example, custom orders and specialized products. What is your turn around time on quotes? Could that process be systematized? Would your West Coast customers appreciate real time quotes after 5 p.m. EST? Or think about a rush international shipment sitting in Customs on, say, Thanksgiving Day.
Would it be beneficial to have export documents on an extranet site that customers can access?
Information exchanges also add value. A heavily engineered product can be put on an extranet, allowing multiple people around the world to work on the same set of diagrams. Companies can save modifications through a conversation thread until the design is complete. Dollars are driven out of the process with fewer face-to-face meetings, a paper trail follows the development, conception to reality is quicker and the customer is in the loop along the way.
“Speed to market is always going to be an issue,” says Smerdel. “To trade information…to make the product better and faster, that’s clearly an advantage.”
Tru-Cut, a contract manufacturer in Sebring, drove costs out of its process by analyzing its value stream with a CAMP consultant. Its batch and queue system resulted in excessive work-in-progress and 30-day advance raw material purchases. Last year, more than $250,000 was saved by moving raw material purchases to a seven-day cycle, decreasing lead time and freeing up cash and floor space. The resulting impact was more than $250 million in savings.
Smerdel says CAMP is seeing tangible results with its own redesigned Web site with click-through links that put customers into informational sites or registration forms for upcoming events.
Aside from programs and seminars, CAMP’s 125 engineers and consultants have assisted more than 1,400 regional companies in implementing manufacturing improvement projects.
Having cutting edge technology carries clout but getting a return on your investment that keeps your doors open for business, that carries respect.
How to reach:CAMP, www.camp.org