4 Metrics Your Discrete Manufacturing ERP Should Be Monitoring

1. Cycle Time

As a discrete manufacturer you tend to manufacture one product at a time, yet, over time, you will manufacture many different products for many different customers. Cycle time is a manufacturing metric that shows how quickly a product can be made and delivered to a customer from receipt of an order. Your customer might not have any urgent requirement for your product, but by measuring cycle time and developing your skills in reducing that time, you will develop production agility.

Satisfying customers is always an important goal. ERP has the scheduling tools to help optimize the overall schedule and the business intelligence analytical tools to make sense of it all.

2. Schedule Attainment

Schedule attainment is a measure of our efficiency. What percentage of our production is attained on schedule? We can produce Gantt charts and model production using all the best ERP optimization tools, but if we cannot follow schedules we lose the benefits.

Measuring at least one manufacturing efficiency metric shows we care about developing lean manufacturing process.

Efficiency is contagious. Measuring at least one manufacturing efficiency metric shows we care about developing lean manufacturing process. Our employees will recognize this and aim for their own efficiencies. Discrete manufacturing ERP gives your business a focal point for these efficiency efforts, whether driven by management or the shop floor.

3. WIP Inventory Turns

Divide the cost of goods sold by the average work in process inventory required to produce those goods. Discrete manufacturers need to be lean, and excess inventory is one of the seven wastes.

Measure turns for all inventories as well as overall inventory. WIP turns are important because once you start production, you must get it done and ship it as quickly as possible to avoid wastage. The Theory of Constraints views throughput as one of the most critical metrics, so ensure you discrete manufacturing ERP is equipped to monitor and report on WIP turns.

4. ECO Cycle Time

We all know engineering changes come from many different directions and they never stop coming. Some come from customer requests. Other engineering change orders (ECOs) come from changes in the supply chain or improvements in components. Still others are internally generated to improve production.

Recommended Reading: Manufacturing ERP - 10 Steps to Success

Every discrete manufacturer has engineering changes and few measure the time to complete the ECO within their discrete manufacturing ERP. The complete cycle begins when the change is requested. The cycle doesn’t end when the ECO is signed off – it ends when the entire surplus inventory generated by the change is disposed. The engineering change should be a set of transactions within your ERP that lead to a clear, reportable metric. Developing and tracking this discrete manufacturing metric in your ERP will mean orders will be completed faster and surplus inventory will diminish at the same time.

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Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle. Contact Tom at customerteam@erpfocus.com.

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Tom Miller