Put Your Data Where Your Work Is

The business case for extending ERP and linking the plant floor to the top floor


By Matthew Bather

Faced with tighter margins and increasing competition, manufacturers today are embracing innovative new ways to take plant floor automation and business management to the next level. Intelligent numerical controls are being implemented to drive efficiency on the plant floor. These tools monitor and measure the output of production data, such as job starts, machine hours and part counts, without manual intervention, pulling data directly from the machines on the plant floor. With all this data, however, the question arises: How should manufacturers use this information to drive productivity and profitability to greater heights?

Making the Data Work for You

First, businesses must move beyond the "silo" approach of the past and share this shop floor information across the organization. While enterprise resource planning (ERP) has helped to automate individual departments, it hasn't extended its back office benefits into the front office where there are tremendous opportunities to better manage people, workloads and supply chain issues. In fact, ERP implementations typically only penetrate 15-20 percent of an organization. Today's business leaders need real-time insight into their entire business, without being bogged down with added time to consolidate data and generate reports. They need to view current metrics on a continual basis to monitor the health of their business. Organizations that continue with traditional ERP deployments without the benefit of full operational integration will struggle.

Realizing this limitation, many companies have embraced the concept of extended ERP — incorporating capabilities such as customer relationship management (CRM), human resources management (HRM), knowledge management and workflow management along with the traditional materials planning, distribution and order entry functionality. This enables the free flow of information to appropriate parties for more informed decision-making.

Extending ERP requires adopting a new mindset whereby all facets of the value chain are interconnected. This means breaking free of the old methodology of preserving data in individual fiefdoms and learning to share information within a rules- and role-based system. For example, production data coming directly off machines can be integrated with an ERP system so that job shops always have the most current data, enabling them to better control headcount and costs.

Access to this production data along with employee information and other operational data should be in a single system in order to more effectively manage production. Such integration provides a more holistic view of the organization from the plant floor to the top floor, ensuring that business runs smoothly and customer expectations are met. Imagine the possibilities of always knowing exactly which jobs are in process, how much inventory is in stock, which products are most in demand and how much staff you'll need at any given time. By linking traditional ERP with advanced tools that help run a business, organizations gain a unique ability to see where processes intersect and how they impact one another, identifying levers of change that will garner the best result. This clearer picture of the business can lead to tremendous cost savings and operational efficiencies.

Extended ERP also requires a powerful workflow component. This doesn't mean a crude "send"-only model such as e-mail, but a business rules-driven system that automates the flow of communication and tasks. This comprehensive approach ensures that assigned tasks are completed or elevated automatically to the next level should a problem arise. Workflow functionality can be used in conjunction with advanced alert management technology to make certain that any potential issues in the production chain do not become a crisis.

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