Excessive manual handling also increases the chance of mistakes and delays, and fragmented, incomplete information about products, parts and service causes sales and customer service personnel to miss out on up-selling and cross-selling opportunities, increasing aftermarket erosion. The result is increased inefficiency, cycle times and expenses.
Too Many Tools
In an attempt to solve front-end inefficiencies, many manufacturers have deployed a multitude of point solutions, including price books, CD-ROMs, Web sites, custom-built product selectors, configurators, pricing and quoting systems, electronic data interchange (EDI) and computer-aided design (CAD) links, enterprise resource planning (ERP)-based order entry, and customer relationship management (CRM). While these tools may allow companies to achieve localized gains, they can exacerbate the "batch-and-queue" problem by not extending benefits across the entire front-end and by creating new requirements and bottlenecks.
Additionally, mergers compound problems when companies fail to assimilate the many systems, products, processes and channels of the newly acquired company into their existing processes. By implementing "too many" front-end tools, manufacturers often add to the very challenges they are trying to solve.
"Making steps flow means working on each design, order and product continuously from beginning to end so that there is no waiting, downtime or scrap within or between steps," wrote Womak and Jones in their article. "This usually requires introducing new types of organizations or technologies."
Too Many Products
The eagerness to satisfy a myriad of customer requests has led many industrial manufacturers to develop highly complex, often overlapping product lines that are "engineered-to-order" by knowledgeable and experienced engineers. While this approach allows companies to satisfy individual clients, it also creates a number of problems, such as the lack of standardization in product development, which drives up costs.
In addition, extensive product proliferation forces many manufacturers to carry large inventories of products and parts that are functionally redundant, in low demand and expensive to maintain.
More than ever, manufacturers need a front-end solution that can resolve these "too many/too much" challenges in a rapid, cost-effective manner.
A comprehensive, integrated solution that increases efficiency and cuts costs across all components of the front-end can deliver the results today's manufacturers need to surpass competitors and realize bottom-line savings.
First, it can often reduce operating costs by 2 to 5 percent of revenue and boost operating profit by 30 to 60 percent.
Second, a lean front-end also offers improved efficiency for legacy back-end systems and solutions by cutting cycle times and delivering cleaner data. Those considering back-end solutions will benefit from implementing a lean front-end solution first ensuring the integrity of information going to the shop floor.
Finally, a lean front-end solution creates a global platform that integrates and automates all of a manufacturer's knowledge, information and tools, transforming the slow and cumbersome assembly-line approach used by most companies to a streamlined, simultaneous flow process. By establishing a single interface for sales channels and customers that encompasses the full range of a manufacturer's products and businesses, a lean front-end solution enables sales teams and distributors to improve customer service and response times.
The characteristics of a lean front-end solution include:
* Automation of rules, processes and approvals By automating the rules, processes and approvals required throughout the inquiry-to-order cycle, a lean front-end solution eliminates the need for hand-offs and queue delays at crucial decision points. This provides greater control when employees get the right information and tools at the right time, and ensures accuracy by eliminating inconsistencies in data.
* Single-point access to knowledge from engineering, customer service, and aftermarket Because requirements, specifications, CAD drawings and other essential information are combined in a single, cohesive system, companies can create accurate proposals in a fraction of the time formerly required, leading to improved quote conversion rates. Also, instant access to aftermarket service and part data allows personnel to sell across the complete product portfolio, maximizing cross- and up-selling opportunities to win larger orders.