Supply chains are critical to profitability and one of the biggest challenges small to midsize business (SMB) manufacturers face today. They require maintaining the proper amount of raw materials, subassemblies and finished product in order to eliminate waste, establish cost efficiencies and avoid unnecessary rework.
The hardest part is managing all the moving pieces between customer demand and supply of finished products to maintain the most efficient flow. For example, when timely, accurate information isn’t updated in material requirements planning (MRP) and finite scheduling is weak, you can’t meet customer requirements and maintain an optimal inventory. Too little inventory results in stockouts, and too much brings excessive carrying costs. When demand planning and forecasting are overlooked or point-of-sale (POS) information is limited, managing the precarious balance between customer demand and supply of products erodes profitability fast.
A comprehensive enterprise resource planning (ERP) and warehouse management system (WMS) that balances and optimizes your supply chain doesn’t have to be complicated or require huge capital investment. The right system can replace existing systems, including manual processes, without reinventing the wheel. With today’s open APIs and extensible systems, the right system can live in harmony, fully integrated, with sustainable point solutions to meet your specific requirements.
Here are a couple of real-life examples from SMB manufacturers:
Old-World Craftsmanship Goes Omnichannel With Modern ERP
Danforth Pewter in Middlebury, Vermont, a maker of handcrafted pewter items and retailer, had an opportunity to move up to an integrated ERP system. The company’s aging hardware could no longer support a needed upgrade in its legacy financial-focused enterprise software, which wasn’t integrated with its stand-alone retail POS system. The company sells about 2,100 SKUs across nine company-owned stores, in addition to website sales and phone orders.
Under the old system, just to maintain business as usual, employees manually performed quarterly inventories and regularly input data into two separate systems, only to later reconcile information across them, among other cumbersome manual processes. Phone orders stacked up. Sales reporting was a tedious, manual process.
Requirements for a new ERP system included managing AP, AR, inventory control and manufacturing. The system needed to integrate with its website and POS system, while providing better shipping.
Danforth Pewter found a flexible, affordable solution in Acumatica’s ERP for manufacturing. Since doing away with the two legacy systems and implementing Acumatica, integrated with Fusion POS, staff time was freed up to focus on more productive tasks with an eye for growth.
The company quickly increased orders shipped per day and improved productivity, boosting the bottom line. With clear insights into the production pipeline, inventory and POS data for what’s selling, it’s easy to determine which products to retire or what to promote in stores, thanks to Acumatica’s robust functionality, such as instant sales reporting and customer relationship management capabilities to generate marketing and sales promotions.
Shedding Light on an Integrated ERP
Although FSC Lighting Inc., of Rancho Cucamonga, California, had transitioned from making fluorescent lighting to LED lighting and controls, it was operating in the dark, unable to keep up with orders because of mostly manual processes for MRP, inventory and warehouse management, across two manufacturing locations.
FSC Lighting’s complex supply chain called for an innovative ERP, away from its siloed systems, primarily an antiquated accounting software. With the heart of its manufacturing and shipping running primarily on manual-based paper processes and tribal knowledge, materials and parts were tracked by hand. Orders risked errors and delays. The company had great potential to improve supply chain efficiencies while better positioning itself for growth.
The company turned to the Acumatica ERP for manufacturing, integrated with Scanco Warehouse for Acumatica, which supports automated inventory and shipping. For example, functionality such as location-based picking — enabled by barcoding — facilitates a tighter, more accurate supply chain across the shop and warehouse floors, where information flows in real time, even on mobile devices.
The responsiveness and one-version-of-the-truth in the Acumatica ERP contain all the details of critical documents, such as for POS, supporting on-the-fly approvals for both inbound materials and outbound orders. FSC Lighting has also cut invoicing time from as long as five days to same day, or within minutes, improving cash flow. The company gained the accuracy and visibility it needed to manage its supply chain and conveniently share information with trading partners, such as its joint venture partner in Asia.
Danforth Pewter and FSC Lighting illustrate how an integrated, comprehensive ERP like Acumatica supports SMB manufacturers to manage both the day-to-day and strategic challenges of balancing supply and demand.