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Ron Fallert

Distribution Cash Flow

Distribution: How to control cash flow alongside product flow

By | Distribution / Supply Chain, ERP | No Comments
Distribution Cash Flow

Recent advancements in technology have empowered businesses to do more, leveraging tools that allow them to reshape and realign the accounts receivable (AR) and accounts payable (AP) functions and shared service center business processes.

Your job as a wholesale distribution business is to ensure product gets from your suppliers to your warehouses to your customers. An industry known for tight margins and high expectations from both customers and suppliers, everything in your business needs to flow.

While inventory is one part of this, something we discussed in our article on inventory control and fulfillment, it’s not the only element of your business that requires tracking and management, because with the movement of product comes the movement of money.

One of the oldest and most fundamental requirements for any business

Controlling the way that money flows into and out of your organization is a constant challenge, one that impacts your relationships with suppliers, reputation to customers, and ultimately your ability to generate profits now and in the future.

A process left largely unchanged for decades, recent advancements in technology have empowered businesses to do more, leveraging tools that allow them to reshape and realign the accounts receivable (AR) and accounts payable (AP) functions and shared service center business processes.

Three goals for improving money flow at the distribution business

For the distribution business, this means that there is a continued push to break down silos, embrace data analytics and business intelligence to improve decisions, and ultimately connect adjacent business functions to increase speed and decrease back-office costs. With the right processes and technologies in place, you can deliver the following benefits:

Break down silos

One of the biggest challenges for any company’s cash flow is siloed data. Not only do you have to combine the way money flows into and out of your organization, you need to align this information with adjacent functions as well. Treasury management, procurement, tax management, and so much more—if people have to spend hours or days just making sure the bills are paid using spreadsheets to connect data, your finance team is operating without the visibility they need.

With each additional location, currency, supplier, or even SKU you add, the time it takes to do even the bare minimum increases.

Connect systems

While there are many reasons silos exist, one of the most common symptoms is lack of integration. Too often, an organization’s back-office infrastructure resembles a “hair ball” of point solutions that talk to each other sporadically, if at all. “How much does my company owe to its suppliers?” “How much do my customers owe?”

The right technology not only allows you the ability to connect workflows to break down silos, it also provides you the right information when and where you need it by providing additional control over information flow and workflows.

Automate business processes

Whether it’s quote-to-cash, revenue recognition, or paying invoices, your distribution needs to make speed and accuracy a priority. Sadly, there are still thousands of companies of all sizes with manually driven workflows for some aspects of AR and AP. Held back by manual processes and emails, too many businesses lose sight of the big picture.

Paired with improved workflows and technologies, distribution businesses face an automation imperative that can only come when you can identify and rectify areas for improvement.

Curing your distribution firm’s cash flow woes with Enterprise Resource Planning

In order to bring together their operations, many businesses have looked to embrace modern technologies that can break down silos, provide a hub for connecting data, and automate traditionally manual processes in AP, AR, and more. As AR and AP are changing from serial processes and exception management to workflows with continuous audit and compliance, addressing the challenges will be a top priority for distribution firms in 2020 and beyond.

Enterprise Resource Planning applications have grown to deliver more and more certainty for distribution firms, who now leverage the cloud to connect various applications and create workflows that work. A recent IDC Marketscape report looked to address the role of ERP in AP and AR operations, noting the challenges your distribution firm may experience in connecting processes into a shared service center and comparing vendors on their ability to deliver. We invite you to read this informative report for free here.

Delivering on the cloud ERP benefits: NexTec and Acumatica Cloud ERP

For the growing distribution firm, you have many options—not only for the solution you choose, but the partner who takes you there. At NexTec Group, we understand the challenges your distribution firm faces and know how to help.

With more than a dozen locations and nearly a quarter of a century of experience in the distribution industry, you will be in good hands. No matter how large you are or complex your needs, we would love to help. Let’s get in touch.

Worker with orange hard hat taking inventory by hand.

Enhance inventory control & speed up order fulfillment

By | ERP, Inventory control, Manufacturing | No Comments
Worker with orange hard hat taking inventory.

Digital tools can reduce the need for manual counting and tracking of inventory.

Inventory control is dynamic and complex, requiring tools that allow for accurate, real-time management of raw materials, products, sources, and supply chain partners. Fortunately, the recent advancements in enterprise resource planning (ERP) technologies have improved the management and impact of inventory control.

How can your manufacturing ERP software enhance inventory control & speed up order fulfillment? By giving your employees access to real-time data that allows for better decisions, improved quality, and better customer outcomes.

While there are standalone inventory control and management software products, those that are integrated with your ERP solution are able to leverage the many benefits of having data collected and accessible in the same platform. As seen in the recent post, Strategic Guide to Planning Manufacturing Production Cycles, ERP solutions offer considerable upside to inventory management and many other areas of your manufacturing company.

Here are a few of the ways your ERP solution helps inventory control.

Replenishment management

ERP inventory management helps you plan for replenishment ordering. By tracking parts and part categories, your ordering can be triggered by indicated or projected demand parameters. Other triggers can include price levels or other factors built into your system. ERP systems help reduce the quantity of orders and project the right timing for when orders should be placed.

Surplus inventory management

Inventory surplus can cause significant issues, from wastage to improper usage to cost considerations. With ERP inventory controls, surplus inventory issues can signal alerts and warnings requiring action. And with ERP integrating information from finance, sales, and operations areas, the decisions about what to do about surplus can be made with better information and collaboration as necessary.

Woman worker with a white hard hat taking inventory.

Inventory management tools connected to your ERP help make better decisions about products and parts.

Better order fulfillment

Market demands are pushing order fulfillment needs every day, as customers and consumers expect rapid turnarounds, low- to no-cost shipping costs, and transparency in the tracking of shipments throughout the transportation process.

ERP tools allow companies to build materials and complete kitting work, track serial numbers, print barcodes and labels, and manage SKUs. Other tools allow companies to value inventory on hand.

When companies have large amounts of inventory on hand, ERP tools also allow manage spend levels and manage cash flow.

Inventory analytics and management

Turnover is crucial for inventory management and profits. Does your company know all it should about what products and parts are moving? Are parts for just a few customers sitting on shelves longer than is financially prudent?

Understanding inventory dynamics helps manufacturers consider whether products should be purchased in smaller or larger quantities, improve shelf life conditions for products and ingredients, and determine optimal levels of items. You’ll reduce carrying costs, warehousing fees, and product maintenance.

ERP solutions can also provide better information about where products are using tracking and mapping tools that reduce the amount of time and expense in locating items in your inventory.

Better customer relations

Better inventory management results in fewer backorders, lost sales, and unhappy customers. Orders will ship more accurately, faster, with less processing time necessary.

At NexTec Group, we help companies identify the ERP solutions that meet their unique manufacturing needs. Contact us to see how NexTec Group can help in finding the vendor, product, and features that will drive improved operations.

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How manufacturing ERP software can improve data collection, BI, and regulatory compliance

By | BI, ERP, Manufacturing | No Comments
Man in a business suit looking at graphic icons.

ERP solutions are powerful tools to collect data that can be leveraged by other components to create better business intelligence capabilities and ensure regulatory compliance.

Enterprise resource planning (ERP) platforms provide powerful solutions for manufacturers. As seen in the recent post, Strategic guide to planning manufacturing production cycles, technology is transforming the way companies operate, allowing for faster and deeper insights that drive innovation and efficiency.

From the collection and use of data to the importance of business intelligence (BI) to the ability to comply with regulatory requirements, your ERP solution provides better information access that can establish new markets, improve processes, and create more efficient operations.

Knowing how manufacturing ERP software can improve data collection, BI, and regulatory compliance can help companies make smart decisions about their buying and implementation decisions.

Data collection

Data is at the heart of manufacturing ERP software. Platforms provide tools that improve help to collect information, store it, and, most importantly, use it in ways that drive better decisions.

Data collection with ERP solutions allows companies to automate the collection of data from throughout the enterprise. Automated collection leverages the connectedness of devices equipped with sensors, storage, and wireless capabilities.

When deployed, the collection and transmission of data can happen in many directions – collected from intermediate and finished products along with the users of those products for reporting and analysis within the ERP itself; transmitted among manufacturing, distribution, and accounting functions; and shared with supply chain partners to improve decision-making and outcomes.

For example, with inventory control purposes, data collection via ERP solutions allows for tracking of production picking, receiving, cycle counting, picking, transfers, and receipts. These tools provide real-time insights on inventory levels, fewer data entry keying errors, and improved warehouse management.

Man in business suit with his hands together palms up.

With the right ERP solution, manufacturers can collect and use data internally and throughout the supply chain.

Business intelligence

BI draws deeply on the data collected within your ERP. BI tools embedded within your ERP or integrated with it allow for the extraction, reporting, and analysis of data to drive business decisions.

Data mining applications can do a deep dive into the collected data to draw out patterns, opportunities, and connections. Most BI systems provide multiple tools that allow the data to be used effectively, both internally and throughout the supply chain.

These tools include Intuitive operational dashboards, integrated scorecards, ad hoc queries that allow for specific deeper dives, and interactive features that allow for variable inputs and extractions.

BI tools allow for better forecasting to drive growth decisions, faster identification of threats and risks, and deeper insights into how products are being used by and inquiries from customers and consumers.

Your ERP solution needs to include or interact with BI tools seamlessly to allow for the greatest impact on the massive amounts of data being collected.

Compliance

Enterprise manufactures today face a wide scope of potential compliance requirements from federal, industrial, and international agencies. With ERP compliance modules, you can be sure that the requirements are accurately recorded and updated within the system.

With automation tools improving rapidly today, manufacturers can ensure that they remain in full compliance. ERP tools can collect the necessary data, record it, and generate the reports necessary to meet with compliance standards, either self-reported or in the case of an inspection r audit.

In the case of a recall, the ERP compliance tools can also help to pinpoint the source issues, determine the scope of the incident, and prepare communication and coordination documentation.

The power of ERP solutions is significant. At NexTec Group, we help companies determine the right manufacturing ERP solution that meets their unique business needs. Contact us to learn how NexTec Group can help you determine your ERP business needs and identify the right solution to leverage data, gain deeper insights, and remain compliant.

ERP solution

Streamline supply chain management with a ERP solution

By | Distribution / Supply Chain, ERP | No Comments
Woman looking at a tablet and using a calculator.

Enterprise resource planning solutions allow for integrated supply chain management, with access to data and insights across devices and platforms.

Imagine a production environment where your supply chain partners can see data, trends, and patterns. Imagine those same partners being able to recommend solutions and improve sourcing, procurement, and transportation. Imagine standardized processes that optimize workflows and allow for more efficiency and profit margin.

With the right enterprise resource planning (ERP) solution, the imaginary can become the reality. As seen in the recent post, Strategic Guide to Planning Manufacturing Production CyclesERP platforms offer the chance to integrate new technologies, collaborate internally and externally, and drive productivity.

Enterprise resource planning software brings together myriad systems and data sets in one space. By combining operational functions with those involving supply chain management, warehousing, procurement, and transportation, operations become dramatically more efficient. When combined with back-office functions such as human resources, finance, sales, and marketing functions, the transformation of the business takes on new dimensions.

It’s evident that to streamline supply chain management with a ERP solution makes sense. But what are the specifics when it comes to supply chain transformation and ERP platforms?

Response to Customization

Today, manufacturers face the challenge of customers expecting customization of products and a broad assortment of options. Customers also expect these customizations to come with short cycle times and rapid delivery.

On the consumer side, tastes and preferences are evolving rapidly, with global perspectives, cultures, preferences, and tastes influencing shopping and consumption worldwide.

A manufacturing ERP software solution provides the large amounts of product data that can be displayed in matrices, dashboards, and reports that provide deeper analysis and understanding that can be shared across the supply chain. The ERP system can provide the tools for accurate and rapid assortment and distribution of various products.

Process Standardization

ERP tools can consolidate and display data taken from different sources, locations, and systems. The integration of this data breaks down internal silos by democratizing the display, access, and use of that information among employees and partners. Standardized data allows for standardized processes that ensure that information, materials, intermediate products and final products through production quickly and accurately. Standardization reduces and eliminates the amount of manual work needed between systems, reducing production schedule times and creating more accurate outcomes.

Standardization of data and processes also allows for more consistency, reducing errors, wastage, and rework. Products are completed at higher grades and quality considerations.

person using a tablet with the words supply chain management displayed.

Supply chain management reporting and insights can be shared across internal and external partners with the use of ERP solutions.

Integrating IT Systems

Different IT systems among supply chain partners and internal departments can slow down operations dramatically. ERP solutions are designed to pull data from different sources and integrate that data with outside information.

Automation for Efficiency

ERP solutions provide for far better operational efficiency. Mix rates, recipe management, production scheduling, maintenance management, inventory control, and scheduling can be rapidly developed and executed using automation tools that keep the supply chain moving. The mundane manual work can often be streamlined and done more efficiently.

Measurement and Assessment

ERP solutions allow for accurate measurement and reporting on supply chain processes, efficiency, and execution, from procurement to warehouse to transportation functions. ERP tools allow for reporting and display of performance in real time, allowing for immediate adjustments to improve performance.

Role Definition

An ERP system can assign access roles and responsibilities to allow for employees to act on information and insights throughout the supply chain. Management of the supply chain can also become more transparent with an ERP solution that allows for clear delineation of responsibilities.

At NexTec, we help companies select and implement an ERP solution that fits their supply chain and operational needs. Contact us to see how NexTec can provide insights into the vendors, products, and features that will transform your supply chain management.

Man in a business suit pointing to an icon with the word standards next to it.

Meet quality control goals with an ERP solution

By | ERP, Manufacturing | No Comments
Man in a business suit pointing to an icon with the word standards next to it.

Quality control standards are fully integrated in manufacturing ERP solutions that ensure products are safe and consistent.

Enterprise resource planning (ERP) tools are powerful ways to manage the complexities of modern manufacturing. AS seen in the recent post, Strategic guide to planning manufacturing production cycles, the right ERP solution can optimize operations, centralize data, encourage collaboration, and drive revenue growth.

With better management of data and systems, the need for quality control may seem like less of a priority. However, in an era of increased regulatory demands, quality control is essential for successful manufacturing ERP software.

Here is a closer look at how to meet quality control goals with an ERP solution.

Your quality control program is designed to ensure order accuracy and consistency while maintaining regulatory compliance. So how does an ERP help?

It Starts With Data

Your quality control starts and ends with quality data. For QC professionals, a lack of good data is problematic and requires a great deal of guesswork. However, a recent survey showed that only 3 percent of company executives believe their data meet basic quality control standards.

The right ERP solution helps you in the collection and organization of data, much of which is done automatically and in real time. An integrated ERP solution allows companies to collect information from various parts of the manufacturing enterprise, as well as from suppliers, partners, and customers. By automating this collection, there is much time spent in the collection and data entry tasks.

Accessing that information is also far easier with an ERP solution that allows for multiple users to input, see, and use data.

Standardization Bearers

Your QC strategy needs to ensure that the output is accurate and meets the standards you’re organization puts in play. Having the real-time data accessible allows for that analysis to happen faster and more consistently.

An ERP helps ensure that the materials, products, and procedures are visible to all, monitored, and applied or created properly. ERP solutions can automate the inspection of incoming raw materials to ensure that they are appropriate and meet the agreed-upon standards.

Your ERP solution can ensure that the entire supply chain works from the same performance indicators and procedures, with the transparency of data providing documentation, identifying issues, and allowing for multiple players to work on developing solutions together.

Man in a business suit pointing to the words quality assurance.

With the right tracking and reporting, your ERP solution can help maintain standards and respond quickly to recalls.

Track and Trace

In the unfortunate case of a recall, ERP solutions help manufacturers respond quickly and minimize impact. Recall management tools can easily identify affected lots and shipments, the type of recall and reasons. In minutes, you can have a clear indication of the affected products and quantities, supplier details, remaining affected stock, and call lists for CRM and sales teams to do outreach.

Your recall management module can manage and track customer responses and generate notification letters, while assigning appropriate response tasks.

When used correctly, your QC and recall management ERP functions will minimize the impact of a recall event, protect your customers and the public, and minimize reputational affects.

Centralized Inventory Control

Inventory control is about ensuring accuracy, appropriate reordering, and proper and timely usage. With QC modules, a manufacturing ERP allows for the creation of inspection plans and checklists; embedding of measures of accepted values; and mobile recording of statuses and test results.

Your ERP will allow for the analysis of real-time inventory data and the development of historical QC results to identify patterns. Your organization will have less waste and fewer customer chargebacks.

Regulatory Compliance

You want to ensure that federal and international regulatory issues are in full compliance to avoid costly fines and penalties. ERP tools allow you to comply with multiple sets of regulatory guidelines, creating the audit trails and reports that are necessary to document processes and risk mitigation.

ERP solutions, in short, ensure that your QC function is an integrated part of management functions and operations. At NexTec Group, we help companies identify their ERP needs and find the right solution to drive productivity and profit. Contact us to see how NexTec Group can help your organization focus on quality manufacturing.

Man pointing to several icons with the words digital manufacturing above them.

Strategic guide to planning manufacturing production cycles

By | ERP, Manufacturing | No Comments
Businessman pointing to a graphic with several icons and the words digital manufacturing.

Enterprise resource planning software allows for better system integration and more efficient production cycles.

Enterprise resource planning (ERP) software can be a game-changer for your manufacturing operation. ERP solutions allow organizations to harness the power of data generated by processes, tools, and customers while dramatically improving operational efficiency.

In this strategic guide to planning manufacturing production cycles, you will see the ways that manufacturing ERP software can transform the way you think about myriad operational processes.

The challenges and opportunities in manufacturing today

Manufacturers today face several key issues that can create challenges for growth. According to a recent Berntson Porter & Company survey, two-thirds of manufacturers are expecting revenue growth this year, but face several challenges, including:

  • A lack of alignment between revenue strategies and operations
  • Growing competition from traditional and nontraditional players
  • Government regulation
  • Technological barriers

Technology is a critical part of most manufacturers’ strategic planning going forward. Digital transformation is changing the way companies approach their work. In addition, manufacturers have to be aware of not just traditional players, but disruptive new players who are embracing new technologies to gain market share.

Technological innovation will continue to influence production in 2018. Robotics, which have played a role in manufacturing for decades, continues to get smarter. Artificial intelligence, edge computing, and blockchain technology are likely to continue to shape the future of manufacturing across all sectors.

The role of ERP

ERP solutions at their most basic provide integrated data collection, storage, analysis, and access. An ERP solution provides the ability to integrate functional areas, including operations, research and development, sales, marketing, finance, human resources, distribution, logistics, and audit capabilities in one place. Data, often in disparate formats and systems, is housed, accessed, integrated, and used by multiple players within the enterprise.

For key decision makers, C-suite leaders, and other employers, the advantages of an integrated approach to data and systems allows for new approaches to solving problems. Data reporting and displays allow for a better understanding of systems, performance, patterns, and opportunities.

As a comprehensive software approach, ERP solutions allow for business processes to be integrated in a holistic view of the business, the work, and the needs.

Today, businesses can choose from on-premises ERP solutions or, increasingly, cloud-based products that allow for rapid scalability, cost control, and reduction or elimination of maintenance and security costs.

For the operations areas of your business, an ERP solution can have a dramatic impact on the work and how the work is done. Here is a closer look at several operational areas that can reap considerable benefits from an ERP approach.

Streamlining supply chain management

Today, your manufacturing is only as effective as your supply chain. As more companies have a global approach to manufacturing, the need for transparency and collaboration is critical. An ERP solution allows you to collect and share data, and to see the correlations between key supply chain components, from material sourcing to distribution.

An ERP allows you to integrate the information throughout the supply chain, from suppliers to customers. By bringing together disparate players and allowing for remote access to information, companies can more rapidly solve problems, control cost, and boost productivity.

Perfect inventory control

Manufacturers face near-constant challenges related to inventory management. Overstocked materials are costly and wasteful. Market fluctuations create uncertainty regarding demand and need for materials and supplies.

Inventory control features in the right ERP solution allow for more accurate management, with trace functionality that reaches the lot, sub-lot, and serial number level. With a full, real-time understanding of inventory levels, enterprise organizations can gain better control of materials on hand, needs, valuation and revaluation.

Making order fulfillment more productive

By integrating the finance, production, shipping, enterprise labeling, customer service, and transportation functions in one centralized location, companies are better able to fulfill orders quickly and accurately. Documentation necessary for order fulfillment, picking, packing, labeling, and shipping can be integrated, shared, and accessible to all employees and functional areas.

Picking will be more accurate and orders will be shipped on time, improving customer satisfaction and repeat business. Compliance issues related to exploring, materials shipment requirements, and safety will be integrated and documented clearly to ensure adherence to federal and international regulations.

Robotic arm being controlled by a man with a tablet app.

With automation and inventory access controls, manufacturing is safer and more accurate.

Putting quality back in quality control

Real-time access to information is a significant benefit for your quality control teams. With access to data, processes, mixing, ingredients and recipes, intermediary products, and grading data, these teams can better value, label, assess, and monitor products throughout production and while in inventory.

An ERP system allows for customized assignments of quality assurance criteria to be used for expiration dates, inspections, upstream and downstream traceability assessments, and record-keeping. When faced with an inspection or audit, documentation can be provided quickly.

Strategizing production schedules

Manufacturing ERP software allows for better scheduling of production to time it to customer demand, orders placed, and anticipated needs. Production cycle planning will be transformed by better capacity planning, bill of materials planning, and shop floor control management.

When your ERP solution ties in performance management tracking and financial reporting, your planning can be even more anticipatory by factoring in lead times, material needs and supply delivery scheduling.

It becomes clear quickly that the impact of ERP solutions on manufacturing can be profound and powerful. At its core, ERP solutions are about leveraging data.

Today, there are terabytes of data available to every manufacturer. The smart factory floor has equipped machines with sensors that can collect and transmit information about operational efficiency, needed maintenance, temperature, and performance indicators. Products themselves can generate information either as finished goods or as raw materials. Finally, customers generate information on how products are used and consumed.

What data is needed varies from manufacturer to manufacturer and department to department. Without ERP solutions, the challenge is knowing what data is available in other areas of the enterprise. And when there is a belief that sharing and integrating data will improve operations, the enterprise is often hampered by system incompatibility or challenges in integrating and reporting on the collective data.

With an ERP solution, you’re better able to collect and reconcile this information, often using automation tools and connected devices that will share and store information in the right format and in the right place.

Business intelligence tools help to make sense of the information collected. BI tools, integrated with or a part of your ERP software suite, can help pinpoint trends and opportunities that otherwise may not manifest themselves.

BI tools and your ERP can also reduce the number of redundancies in the collection and reporting of your data coming from disparate sources or in different formats. Data will be presented in real time in an actionable format that allows for better and more accurate decision-making.

With the growth of globalized demand and production, companies face increasing domestic and international compliance issues. An ERP helps to maintain compliance with different agencies and regulators, using automated tools to track and record lots, generate audit trails, create reports and automate the data needed to comply with legal and fiscal requirements across different jurisdictions.

In the case of a recall event, your ERP solution also provides powerful tools to identify issues faster and resolve them. Powerful track-and-trace tools allow for rapid identification of sources and destinations of affected product. Streamlined processes allow for the identification, notification, and tracking required to ensure public safety and reduce the risk to brand, bottom line, and reputation alike.

With geopolitical instability an ever-present threat to manufacturers large and small, the need for more efficient operations is more critical than ever. ERPs can provide more certainty in the projections and assumptions that are used to plan and predict, and they can provide manufacturers not just with operational efficiency, but also more flexibility and confidence in decision making.

The ERP system is also critical for manufacturers looking to become more customer-centric and responsive to evolving customer needs and demands. Customers expect to interact more with brands and for those brands to know them and how they use products. With ERP tools, especially integrated with customer service functions, companies can be more responsive to customer expectations and needs.

Some manufacturers are even adopting manufacturing-as-a-service, providing on-demand access to desired products, customizations, and flexibility. With an ERP solution, manufacturers can be more responsive to the way customers want to access product.

Why the Cloud

Cloud ERP solutions offer considerable advantages to the manufacturer. Among the top benefits:

  • Lower upfront costs that are shifted from capital expenditures to operating costs
  • Lower operating costs as cloud solutions reduce or eliminate the need for onsite storage, maintenance, security, and cooling costs
  • Fast implementation and scalability. Cloud solutions allow for companies to adopt quickly and gradually migrate data and systems to the ERP over time. Most cloud solutions allow you to pay for what you use, meaning that demand and usage can grow as needs present themselves.
  • Updating capacity that is rapid and responsive, allowing for the newest versions of software and the newest technologies to be adopted and used quickly.

The need for powerful ERP solutions is clear. Knowing how to choose the right system is often not. NexTec Group helps enterprise organizations to determine selection criteria, evaluate vendors, and choose a solution. Contact us to see how NexTec can help your company choose the right ERP solution for your manufacturing needs.

Distribution management software

Rise of the Smart Factory: Implications for Distribution and Logistics

By | Distribution / Supply Chain, ERP | No Comments
Distribution management software

With integrated information systems, companies can use the digital supply chain to improve logistics and inventory management.

Linear supply chains, long the traditional way that manufacturers managed production, are being replaced by dynamic, interconnected systems that are integrated and collaborative. The smart factory today can use these dynamic tools to improve efficiency, reduce operational costs, and boost revenues by working more closely with supply chain partners.

As noted in the recent post, Rise of the Smart Factory: Evolving at the Speed of Business, smart factories are using new technologies to collect, analyze, report on, and use data that create enterprise-wide opportunities to improve operations. This post considers the role the digital supply chain plays in transforming organizations.

The traditional supply chain used a linear progression: Design, Plan, Source, Make, and Deliver. Today’s digital supply chain is far more interconnected, with share and connect information from multiple locations and sources.

The difference in supply chain types is the continuous flow of information that can be used by multiple areas within the organization. These data allow for more automation, better workflow and analytics, and more insights. A digital supply network has the following traits:

  • ‘Always-on’ flexibility. Traditional and new data sets that include information collected from sensors and locations enable rapid responses to changing conditions within the network.
  • Connected partners. Seamless, real-time communication and collaboration with suppliers, partners, and customers means companies can now see and use network-wide insights from data that is centralized, synchronized, and standardized.
  • Intelligent learning. Learning is promoted throughout the enterprise for workers and machines, allowing for on-the-spot decisions informed by analytics and predictive insights.
  • Transparency. There is improved visibility throughout the supply network using sensors and location-based services. The benefits include better material flow tracking, scheduling, supply and demand balancing, and improved financial performance.
  • Better decisions. Contextually relevant information enables more transparency and the reduction of internal silos. With multiple units providing and using data, improved decision-making optimizes performance, helps meet financial objectives, and factors in multiple trade-offs.
Distribution management software

Automated tools and connected objects provide information in real time for better decision-making in smart factories with digital supply chains.

Planning for the digital supply chain

Companies looking to adopt digital supply chain technology need to assess how to capture information from the physical world and record it as digital information, the physical-to-digital transformation. That information then needs to be presented and integrated with information from other supply chain partners (digital-to-digital).

The information gleaned from multiple digital channels needs to be stored, displayed, and actualized. The results need to be translated from digital insights to actions that are applied within the smart factory.

Using the right tools is critical. The NexTec Group helps companies identify the right distribution management software tools that will drive innovation and efficiency. NexTec consultants identify the needs and facilitate the selection of the right vendors that drive smart factory development.

Acumatica Cloud ERP provides an enterprise solution that helps create the right ecosystem to create the digital supply chain. With Acumatica distribution management software, companies can fully integrate sales orders, inventory tracking, order fulfillment, purchasing, and customer support.

Download the NexTec Corporate Brochure to learn more how NexTec Group can help your company strengthen the impact of its supply chain.

ERP solution

Rise of the smart factory: Evolving at the speed of business

By | ERP, Manufacturing | No Comments
ERP solutions

The smart factory drives efficiency, accuracy, and better decision-making through automation and connected objects.

As new technologies dramatically shift the landscape of manufacturing the world over, industry is seeing rapid change in how things are made.

“Rise of the Smart Factory: Evolving at the Speed of Business” explores these changes and the many impacts on the way business is done.

What is a smart factory?

What makes a factory “smart”? What does it mean?

Smart factories represent a leap in recent innovations, such as automation, that presented major innovations and efficiency drives during the 20th century. The smart factory is deeply interconnected, with data streams from throughout the enterprise impacting how work is done.

Data-informed factories take inputs from systems, manufacturing components, human assets, and operational areas to drive better manufacturing output, productivity, maintenance, inventory tracking, supply chain management, and job scheduling and management. The smart factory allows for those staff who work off the production floor — such as accountants, sales and marketing staff, and c-suite leaders — to have shared information to drive decision-making and collaboration.

Impact of the fourth revolution

Industry 4.0 refers to the revolutionary impact of core technologies. The Internet of Things (IoT) creates dramatic new ways for objects outfitted with sensors, storage, and wireless capabilities to track, measure, and communicate. Massive analytics programs capture data from IoT objects and machines. Powerful analytics programs provide for the collection, reporting, and display of data that helps foster better decisions and information about performance and needs.

The growth of cloud computing also plays a key role, as companies can bring disparate systems together under enterprise resource planning, business intelligence, and customer relationship management functions that sit virtually, giving employees access to data and the ability to manage the business in a cohesive and collaborative way. New technologies are emerging — from 3D printing to virtual reality tools — that provide new opportunities to create parts, conduct maintenance, and assist customers and consumers.

Defining a smart factory

The smart factory has several nuanced components. First and foremost, it expands on the notion of automation, which has often been the mechanized completion of a singular task.

The smart factory takes that functionality to a far more sophisticated level. Artificial intelligence and sensor-enabled items allow for business processes and physical machines to be integrated in new ways. These new tools allow for machine learning to optimize performance and efficacy, in many cases faster and more efficiently than humans can.

Smart factories also can tie in production through the supply chain, developing deeper relationships with suppliers and enabling better performance and sourcing.

What’s so smart about smart factories? It’s the ability to insert more flexibility into production through self-optimization (where self refers to the factory itself). These factories learn in real time and can self-adapt and self-adjust, operating with autonomy through complete production cycles.

Manufacturers today face mounting pressures, not only from competitors but also changing and more demanding expectations from customers and the public. They face the near-constant threat of digital disruption from new players, many of whom were not previously in the manufacturing space, that can erode market share. Companies need to continue to innovate new products, improve existing ones, and identify new opportunities for products or services related to those products that can be commoditized.

ERP solutions

The smart factory collects, stores, and displays data that allows for better decisions in real time.

Five features

Here is a look at five fundamental features of today’s smart factories.

  1. Connectedness. The connected nature of smart factories is the most obvious, and most important, feature.  Connectedness begins with a reliance on existing data sets that can be integrated with “new data” generated from assets connected with sensors and communication tools. This new data can provide information on performance, temperature, maintenance needs, accuracy, and usage. Fusing together the new data and traditional data in real time allows for better decisions. Collectively, these data provide a holistic view of performance and operations.
  2. Optimization. The smart factory helps maximize performance and reduce waste. These efficiencies are the result of operations that can now be accomplished reliably with little to no manual work. Among the functions that benefit in a smart factory are the tracking and scheduling of jobs, automation of workflows, asset synchronization, and efficient energy consumption.
  3. Transparency. With real-time data flowing seamlessly into sensors and databases, operations and evaluation of those operations are transparent. Information is no longer inaccessible or unrelatable to other information. Instead, the entire organization can see and understand the data, taking that information and using it to develop insights and adjust procedures, policies, and even entire business models. With that transparency comes the availability of tools that protect that data, with role-based access, real-time alerts, and active tracking and monitoring.
  4. Proactivity. Anticipation is often a challenge in the factory setting. Inventory calculations can be off. Wastage can throw off production schedules and availability of materials or delay deliveries. Anomalies that can disrupt operations, require repairs, or throw off quality control are hard to detect. Safety and maintenance issues may go unnoticed. The smart factory allows for more predictability, with intelligent systems using historical data, real-time measures, and learned insights to improve productivity, yield, uptime, and safety.
  5. Agility. Change does not always come easily to the factory floor. Production issues, inventory gaps, or mechanical problems can cause major quandaries. The smart factory can adapt to those changes, often reconfiguring machines or material flows to adjust rapidly with minimal disruption. As schedules change, the smart factory can minimize downtime and speed up changeovers.

Smart factory benefits

Here is a closer look at the key benefits a smart factory provides:

  • Asset visibility. Workers and corporate leaders know in real time how assets are performing, helping inform decisions about usage challenges and productivity.
  • Asset efficiency. The smart factory generates massive amounts of data that inform operations, improve uptime, maximize capacity, optimize scheduling, and lower changeover time.
  • Cost reduction. Smart factories help reduce wastage, drive efficiency, and manage inventory acquisition and storage. Data can help inform decisions about hiring and purchasing. Better supply chain communication pushes organizations to better sourcing outcomes and relationships.
  • Quality. Products are made with precision, fewer flaws, less scrap, shorter lead times, and better yields. Improved quality also leads to fewer warranty and repair costs and fewer recalls as products have fewer defects and higher degrees of functionality.
  • Sustainability. Less waste, scrap, and inefficiency provides for a deeper commitment to sustainable manufacturing, and a smaller manufacturing footprint, which can be leveraged in community relations, public relations, and marketing efforts.
  • Safety. Smart factories help boost wellness as tasks are completed and monitored by machines, freeing up workers for safer and more critical work. There is less potential for human error, leading to not only safer manufacturing but also safer products.

For your consideration

For companies looking to move to smart factories, there are several factors that merit significant conversation and analysis. While not all of these areas are pertinent to every organization, they provide a framework for the work ahead.

  • Data management. Data are the lifeblood of the smart factory. Without the right systems to collect, store, interpret, and use data, the smart factory will never reach its full potential. Data storage and usage needs will inevitably expand over time, requiring dynamic, scalable systems that can grow as necessary.
  • Technology. For a factory’s components to “talk” with each other, with humans, and with databases, the right valves, sensors, machines, tools, and material handling components need to be in place. The technology needs are myriad and complex, which is one reason many companies use integrated platforms to address the many requirements for a robust smart factory. These platforms provide for enterprise resource planning, business intelligence, customer relationship management, analytics, and storage, and are adaptable to account for past, emerging, and future technologies.
  • Governance. Companies may be dazzled by the potential for integration and automation, but those tools need to be deployed and used with an underpinning of planning and processes. Decision-making, oversight, and processes may need to be radically overhauled to meet the complexities of the smart factory.
  • Personnel. People will still be needed, though some roles may be eliminated or rethought. Change management will be critical to help employees adapt to new tools, new roles, and new thinking about their work.
  • Security. While physical security has long been a consideration for factory leadership, the smart factory requires a significant investment in cybersecurity. As systems, objects, tools, and products become more connected and outfitted with data and tools, those items become susceptible to outside attack.

Having the right partner

The potential of the smart factory is evident, but having the right tools and partners available to help plan, implement, train, and use these new functions is important. At NexTec Group, we provide manufacturers with the insights and implementation needs that allow for rapid selection and implementation.

We work closely with top providers of the systems necessary to make the smart factory an effective, dynamic entity. Enterprise resource planning (ERP) platforms help bring the factory operations, back-office functions, and other systems, together in an integrated tool to allow for the collection, sharing, and use of data. We work with top ERP providers like SageX3 to deliver the right solutions to companies looking to improve efficiency.

Download the NexTec Corporate Brochure to learn more about how NexTec Group can help your manufacturing company find the ERP solution that supports today’s smart factories.

Manufacturing ERP

What Will Manufacturing Look Like in 2018?

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Manufacturing ERP

Manufacturing employees use new technologies to glean insights and make decisions faster using real-time data driven by manufacturing ERP platforms.

Technological evolution will drive much of manufacturing innovation and growth in 2018. As seen in the recent article, Top Trends in ERP in 2018, technologies are major drivers of change throughout the manufacturing sector and throughout manufacturing processes.

What will manufacturing look like in 2018? In short, digital technologies like automation and increased reliance on connected objects will drive a new approach to the way things are made.

Here is a closer look at some of the technologies and trends behind the innovation.

Automation. Automation comes in many forms in today’s manufacturing space. There is artificial intelligence that helps improve customer interactions, predicts needed maintenance and repairs, and helps spot trends. Robotics, while not new, continue to makes strides, driving efficiency and taking on ever-more complex tasks. 3D printing allows for parts to be made and shipped quickly or created and installed onsite, driving down costs and downtime. Virtual reality changes the way in which field technicians approach and solve problems.

According to IDC, by 2020 60 percent of floor workers will be working alongside at least one of these automated technologies. This has significant implications for manufacturers, whose workers may see these innovations as a threat to their jobs at the same time companies need those workers to learn, use, and innovate with these tech tools.

Going Global. Location matters less than ever before as global manufacturers, armed with powerful collaboration tools driven by complex enterprise resource planning (ERP) systems, can build powerful global supply networks. Information, data, and parts or products can be moved from one location to another faster and cheaper than ever before possible.

These global supply networks, bolstered by real-time sharing of logistics and data, let companies ship and source products from and to virtually anywhere in the world.

Manufacturers can leverage these tools to forge new global partnerships. Manufacturing ERP platforms help drive these partnerships by integrating business processes and data, allowing for better coordination and management of operations among far-flung partners.

Manufacturing ERP

Robotics is one area that is poised to see growth in manufacturing, enhanced by other new technologies like artificial intelligence and virtual reality.

Digital Drive. Digital transformation is seemingly boundless today. Traditional digital transformation opportunities will continue to manifest in 2018, including the ability to reduce costs, improve efficiency, and drive innovation.

Today, the abundance and potential of digital technologies are beginning to shift manufacturing to an “as a service” sector. This change is driven in large part by the growth of the industrial Internet of Things (IIOT), which is putting connected objects in the manufacturing plant and in finished goods.

The IIOT allows companies to develop, create, and sell products in a rich market-informed context, drawing on data and interactions from customers to spur innovation. In addition, manufacturers are entering new markets as they unlock the potential of the collected data to provide new products and services that provide new valuable offerings to customers.

These information-based products and services are creating new business models for manufacturers who embrace the new technologies to the core. Manufacturers can become the disruptors when they act quickly, as opposed to losing market share to other disruptive players.

At NexTec, we work closely with manufacturers to identify their needs and the systems that will allow for maximum leverage of the digital technologies available now and in the near future. We help companies select and install the manufacturing ERP systems that meet their needs and can adapt as manufacturers expand and pivot. Download the NexTec Corporate Brochure to learn more about our work that drives growth in manufacturing.

ERP manufacturing

Industry 4.0: What it means for the manufacturing industry

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Manufacturing ERP software

In Industry 4.0, manufacturers can leverage digital tools, augmented realities, and expanded computer storage and analytics to transform business models and improve efficiency.

Industry 4.0 has arrived and is changing the way people live and work. For manufacturing companies, this newest industrial revolution forces organizations to take a new approach to every facet of their businesses.

This article takes a close look at the ways that digital tools and hypercomputing are primed to change the way manufacturers approach everything from R&D to customer service. It also looks at how these technologies can change entire business models, identify new markets, and alter the way work is done.

Defining Industry 4.0

The first industrial revolution arrived in the 1780s, with the advent of steam and water power to mechanize production facilities. The introduction of the assembly line and electrification allowed for the growth of mass production in the 1870s, marking the second revolution.

It was in the 1960s, when the use of computing technologies and automation began to accelerate, that the third industrial revolution gained strength.

The latest industrial revolution is generally defined as the era we live in today, with further growth in automation and data transfer driving the extraordinary changes in the way work is done. While definitions vary, Industry 4.0 generally consists of the following:

  • The increasing use of cyber-physical systems that connect production systems with smart production systems.
  • Reliance on the Internet of Things, the vast network of billions of connected objects that are equipped with sensors, storage, software, and wireless capacity to sense, record, and send information about usage, maintenance, and performance.
  • Cloud computing that allows for the storage and reporting of massive data sets, which can be collected and used in real time.
  • Supercomputing systems that provide the tools that can analyze those collected massive data sets. With supercomputing, manufacturers can collect, analyze, report on, and represent data in ways that can instantaneously leverage information.
  • Smart technologies, including robotics, artificial intelligence, and 3D printing, all of which are creating new opportunities, more efficient manufacturing processes, and interconnectedness.
  • Cybersecurity elements that require the careful protection of proprietary information, especially consumer, customer, and employee data.

Industry 4.0 creates an experience where manufacturing systems and their output are connected to one another like never before. They can communicate, analyze, interpret, recommend, alert, and share information. By doing so, objects and machines share intelligence and drive enhancements.

New models, new work

With the advent of Industry 4.0, manufacturers are forced to reexamine broad swaths of their enterprises. Here are a few ways that the manufacturing world is changing the lens it uses for perspectives on work and work products.

The Segment of one. While manufacturing continues to be, in many cases, a volume industry, there is room for growth and niche production never before possible. The “segment of one” mindset reflects the growing expectations of customers, who increasingly insist on different relationships with the products and brands they use.

Manufacturers need to understand where there are opportunities, and the technologies necessary, to create segments of one in their marketing, experiences, outputs, and customer service. Connected devices can be used to create unique products and services that are customized to smaller segments or even individuals.

The Role of IoT. The Internet of Things provides the capability for manufacturers to use digital information in the physical realm. Manufacturing begins with information about a product, a market, a drawing, or an output from design software. This information is communicated to machines to make the design and transform it from conceptual to physical.

With the IoT, sensors, networks, software applications, and other cognitive technologies provide invaluable inputs and outputs, allowing manufacturers to determine the scope, scale, and frequency of production. They allow manufacturers to better understand the risks related to security, reliability, and accuracy that can rapidly help improve processes and products. They can help address issues of latency and the timing of when manufacturing is optimal.

It is here that IoT can make a deep change to manufacturing. Instead of linear conceptual-to-physical and physical-to-digital processes, IoT allows for continual loops. Ideas and information can now flow seamlessly and multi-directionally, creating a physical-to-digital-to-physical-to-digital loop of information, feedback, enhancement, and innovation that is rapid and highly impactful to consumers.

Focus on outcomes. Customers today are no longer just interested in products. They are instead keenly interested in the outcomes afforded by those products. What does that mean for manufacturers?

It could mean, for example, that manufacturers are selling not just the wearable devices that provide information on vital signs and fitness levels. Instead, it means providing customers with customized information about, say, ingredients in their food products that could result in a lowering of cholesterol or blood glucose levels.

A look at new technologies driving Industry 4.0

To truly innovate, manufacturers need to understand the array of potentialities driven by new technologies at the heart of Industry 4.0. Here are capsule looks at some of these technologies:

  • Big Data. Refers to the collection of data, both internally and externally, that can be used as an ongoing source of information for analysis and discovery. It is often generated by objects within the Internet of Things.
  • Autonomous robotics. Factories of the near future will have the capability to use equipment and processes that improve via self-optimization, which will automatically adjust outputs, traffic, and processes in response to observed and reported data.
  • Augmented reality. AR allows for manufacturers to access and manipulate information with virtual representations of real-world scenarios. These tools can be used to identify maintenance issues, test solutions, create applications, and solve customer issues.
  • Point-of-use delivery. With connected objects playing a more important role than ever, it is possible to use POU delivery models to reduce wait times for customers, improve reliability, and anticipate production demand better than ever before.
  • Cognitive computing. As manufacturers and the products they make are becoming more wired and interconnected, more data are generated. Bringing function and use to that data requires powerful analytics programs that can display that data and identify patterns and needs. With cognitive computing, manufacturers can parlay all that data in three key ways:
    • Intelligent assets that use the data and analytics to sense, self-diagnose, and communicate in order to lower downtime and optimize performance
    • Enterprise cognition that takes information from workflows, products, contexts, and the environment to improve quality and decision-making
    • Resource optimization that combines data from disparate systems, locations, and usage levels to maximize the use of worker, energy, and equipment
  • Additive manufacturingThe more formal name for 3D printing, additive manufacturing includes some technologies that have been around for years as well as newer tools. This realm of manufacturing output also includes rapid prototyping, direct digital manufacturing, and layered output.
  • Advanced materialsWhether it is nanotechnologies, biomaterials, computing storage developments, or building materials, there is always a need to consider advanced materials in manufacturing.
Manufacturing ERP software

Intelligent robotics that can detect issues, report needed maintenance, and adjust manufacturing autonomously are key factors in the fourth industrial revolution.

Why paying attention matters

As Industry 4.0 becomes the norm, manufacturers should act today to determine the directions to take in adopting and adapting technologies that will impact business both in the short and long term.

Here are a few of the main reasons why manufacturers need to tackle Industry 4.0 now.

Operational ImprovementDeploying new technologies will provide a competitive advantage by maximizing the use of assets, minimizing downtime for equipment and workers, improving direct and indirect labor efficiency, and maximizing scheduling planning and accuracy.

Partnership opportunities. With 4.0 technologies, companies can improve existing relationships by providing more supply chain transparency and identifying new partnerships that can lead to new markets or products. Better transparency leads to risk reduction through clearer availability of raw materials, ingredients, and products. Warranty and recall procedures can be smoother and aided by improved track-and-trace functionality, too.

Supply planningWith deeper, integrated relationships with suppliers, manufacturers can create and respond to demand patterns and track the movement of goods throughout the supply chain. In turn, manufacturers can become proactive with customers, suggesting replenishment cycles and anticipating demand. Better transparency also gives manufacturers a deeper understanding of supplier capacity and lead times, leading to more informed supplier selection.

Revenue potentialWith Industry 4.0, companies can rapidly identify, pursue, develop, and deploy new products and services. Aftermarket opportunities can become significant, especially those that rely on the massive data sets being collected and analyzed.

Stronger customer relationshipsCustomers are demanding different relationships with manufacturers and Industry 4.0 allows those companies to respond. Collected data and feedback can deepen customer relationships, create a better understanding of customer needs and wants, and unearth insights that heretofore were not feasible. Customers can be better integrated into the discovery, testing, feedback, and innovation processes.

Market expansion. New products and services alone will generate new market possibilities. Industry 4.0 allows manufacturers to expand into emerging markets and international markets more quickly and to more readily gain insights into regional differences and preferences among customer bases. These new tools also offer a chance for companies to identify and pursue mergers and acquisitions more easily.

Accelerated planning cyclesNew tools allow for companies to identify potential new offerings, develop and test them, and bring them to market in weeks, not months or years. Automation and cloud computing provide the infrastructure to scale vertically or shift horizontally in support of newly emergent opportunities. In addition, companies can consider ways to make existing products smarter by equipping them with the tools that enhance the physical-digital-physical loop.

Better labor usageGood manufacturers understand the value of a well-informed, well-deployed labor force. With more information available, workers can make better decisions faster. They can be trained and deployed in smarter ways. Labor efficiency and productivity can be monitored, analyzed, and reported. Safety in the workplace can be monitored in real time, reducing accidents and lost work time.

Tying it together

At NexTec, we help companies leverage the growing technological revolution with solutions that integrate disparate corporate systems. Enterprise resource planning (ERP) systems provide companies with the platforms that allow for smart manufacturing for the 21st century.

We help companies identify their integration needs and identify, select, and install the right manufacturing ERP software systems that meet their unique needs. Our consultants have deep information and insights on the vendors, products, and features of leading ERP systems and will be trusted partners throughout the selection and installation processes.

Download the NexTec Corporate Brochure to learn more about how NexTec can help your organization thrive in Industry 4.0.