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Myths and Realities of “Top to Shop” in Manufacturing – a Two Part Series

  • 6 March 2013
  • cre8
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Categories: ERP

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For nearly two decades analysts, journalists, and industry experts have warned manufacturers about the consequences of a disconnect between the shop floor (the production line) and the top floor (senior management up to C-suite).  With all that has been written on the subject, it’s surprising that few manufacturers have even tried to connect the shop floor to the top floor to enhance the extended supply chain.

Those that have taken action without success failed to address the fundamental requirements of connecting the top floor with the shop floor in a manufacturing business:

  • Use one set of data—a single, real-time version of the truth;
  • Make the corporate strategic plan actionable for everyone in the organization;
  • Deliver production and operations insight into the hands of the people who define the strategy;
  • Close the loop on the extended supply chain; and,
  • Use enterprise resource planning (ERP) software, a manufacturing execution system (MES) and enterprise manufacturing intelligence (EMI) software in harmony to facilitate a flow of accurate information throughout the organization.

 

Making the connection from top floor to shop floor, and back again, can seem overwhelming.  Like any strategic goal, it requires senior management commitment, together with motivating and mobilizing everyone and everything throughout the organization in the same direction.  Without this level of commitment, information silos flourish and the disconnect becomes a chasm, placing business goals in jeopardy.

Part One – The Myths of “Top to Shop” in Manufacturing

Myth: “My company is too small/big for effective top-to-shop”

Establishing a connection between line workers and decision makers to improve the supply chain (outbound as well as inbound) is important whether you’re a small produce business, a medium-sized specialty coatings company, or a multi- billion-dollar cosmetics empire.

Manufacturing giants require and can afford top-tier ERP and MES systems, but small and mid-size businesses derive greater value from ERP that is designed specifically for the kinds of goods they produce. For example, food and beverage companies have concerns around traceability and compliance, while packaging businesses often struggle with quality and scrap. To avoid the high cost of customization, services, and bolt-on applications, high achievers use systems that align with their specific production and business concerns. The systems that best meet their needs are industry-specific yet flexible and provide a user-friendly configuration interface to adapt to business needs today and tomorrow.

IT system agnostic ERP, MES, and EMI solutions deliver the greatest value all around—for small producers to manufacturing giants. After making the decision to purchase a system, this is typically a topic of much debate. If a company already has one of these systems, that doesn’t mean it will survive indefinitely. Acquiring a system-agnostic EMI or MES solution ensures continuity of performance gains and protects the investment, regardless of business changes into the future.

Myth: “We don’t have disconnects, the problem is worker commitment”

While C-level executives typically focus on financial considerations, plant management and line supervisors worry about throughput and quality. Everyone is pushing a vision and agenda, and as a result line workers receive conflicting messages. Few have any idea how to translate the financial and operational directives into specific, meaningful action. Those on the front lines often pick and choose which priorities will receive their attention, and resist or ignore the rest.

While management understands that enterprise strategies must evolve with market and economic conditions, production teams persistently strive toward one goal: produce quality goods on time. These perspectives often collide and create a disconnect. However, for businesses that recognize the opportunity, it’s where production tactics align with corporate strategies to drive success.

Manufacturers who take steps to overcome the communication disconnect find common ground by connecting the shop floor to the top floor with ERP, MES and manufacturing intelligence.

Myth: “Top to shop is just a lot of fancy charts and graphs”

Meaningful connections and a single set of facts isn’t something we “see”. Instead it’s the heartbeat of a business organized with ERP, MES and EMI working in harmony to provide a flow of accurate information throughout the organization. The result is a unified ecosystem that eliminates complexity in business processes, despite complexity of manufacturing.

The focal point of “top-to-shop” is ERP. It connects everything, vertically within the business (from shop to top), and horizontally so that there are seamless connections from supplier to production, to the customer. Manufacturing execution (also called production management) and manufacturing intelligence complete the connections, so that data and insight flows to and from ERP. These are the connections that provide entirely new insights on how to react, how to improve the business, and how to make timely proactive decisions based on fact.

In practice, it’s a closed-loop control system. The ERP still creates a plan—but then that plan moves electronically to the shop floor via the MES. The system creates work orders, and as production happens, it monitors exactly what takes place and what is produced. Information flows back into the system directly from assets on the line, via PLCs, purpose-specific devices, or an OPC standard. The MES feeds data to the EMI system as well as back to the ERP, and everyone throughout the business knows what’s really going on at all times. It’s a single, real-time version of the truth—and there’s no margin for interpretation or misunderstanding.

Next week Part Two – The Realities of “Top to Shop” in Manufacturing

From an Epicor White Paper

About Epicor

Epicor Software Corporation is a global leader delivering business software solutions to the manufacturing, distribution, retail, and service industries. With more than 40 years of experience, Epicor has more than 20,000 customers in over 150 countries. Epicor solutions enable companies to drive increased efficiency and improve profitability. With a history of innovation, industry expertise, and passion for excellence, Epicor inspires customers to build lasting competitive advantage. Epicor provides the single point of accountability that local, regional, and global businesses demand. For more information, visit www.epicor.com.

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