Just like when preparing a meal from a recipe, there are certain measurements (such as tablespoon, cup, or fluid ounces) for your ingredients along with steps to undergo (such as baking or sautéing) to successfully have a finished dish.  The same concept exists for process manufacturing.  Formulas in manufacturing specifically state the ingredients and amounts that are necessary for the successful completion of a product.  With both instances, the recipes must be followed and measurements must correspond otherwise there will not be a successful conclusion.   In other words if a cake recipe calls for your cake to bake at 300º for 45 minutes and to speed up the process you choose to bake at 450º for 30 minutes, the outcome will be an overcooked cake!  The same goes for process manufacturing, if the measurements and recipe are not followed, the customer will not be satisfied with an unfinished product or the deadline not being met.   

In process manufacturing, there is not only a recipe or formula for the preparation of the product, but also for the packaging of the product specific to customer orders.    This portion of the formula or recipe contains steps for filling the product to meet a finished goods order, such as 16 oz bottle with a cap and label.   The label could be branded to the customers’ private branding.   Although in process manufacturing, the products are usually created in bulk, the manufacturer may not deliver the product to the customer in the same way.  This bulk is usually kept in a tank or tote as an intermediate and then a fill ticket can be generated from the demand of a sales order.  The fill ticket is like a recipe or formula or even a bill of material to tell the picker how to package and ship the finished good.  If anything were to change in this process, there are ways to keep track of the recipes and formulas for future (long term) efficiency and effectiveness.   With process manufacturing, an important component to consider and keep in mind is that the formulas used must be organized, controlled and input in the computer.  A prominent question for the manufacturer to ask would be is the inventory being controlled as it should be?  Do I know how much raw material or finished goods I lost in processing or filling?  Inventory control and costing is a key component for process manufacturers to truly understand profitability by finished good. 

Needing to see the physical properties, inventory costs, labor costs, containerization, quality of the raw materials and finished goods is critical to product development process all the way through to the final production management.  Process manufacturers should also maintain the aim to meet the requirements for customer satisfaction.  All these things would be factors of an ERP (Enterprise Resource Planning) system which would consolidate all business operations into a uniform and enterprise-wide system environment.  In other words, with ERP, a manufacturer can successfully in one system control and manage the customer relationship management , manufacturing, supply chain management, financials, project management, human resources, data services and access control.  A cost effective way to implement the ERP software would be to hire outside consultants (solution suppliers) who are professionally and adequately trained to implement these systems which are at times considered to be too complex for someone to handle in-house such as the developer on site.  Let’s say there may be a question on the implementation or the ERP system or software in general that someone without the proper credentials within the company couldn’t answer; having a solution provider to rely on would prevent any potential unanswered questions or concerns to cause future problems.  Another option would be to implement your ERP in phases.  A good consulting firm with experience in your industry can advise you on the best options and priorities for your company.   

I have listed a few of our product lines that are tried and true for the process manufacturer that use the Microsoft Dynamics GP Financials and Supply Chain. 

• BatchMaster Manufacturing
• Horizon’s Manufacturing
• Vicinity Manufacturing

Here at Custom Information Services, we are a Microsoft Dynamics GP reseller in North Texas and have specialized in selling and implementing network services, manufacturing and accounting software to mid-sized companies for over 20 years. 

For more information on process manufacturing and the solutions available for ERP, contact Brittany Meeks with Custom Information Services at (817) 640-0016 x 124 or email at bmeeks@customis.com.

by Custom Information Services

What is Process Manufacturing? is a post from: ERP Software Blog

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My husband is in sales and project management for a company that works with manufacturers building conveyors, blenders, grinders, etc. for primarily the food and cosmetics industry.    We often joke that he gets the deals before I do because even though the software I represent takes the order and prints the invoice, software does not mix the raw materials and make the finished good.  Owners invest in what is going to give them the most immediate return on investment (ROI).    I do think companies often miss the ROI that they can get from having accurate inventory quantities and increasing their inventory turns by having the right raw materials on hand.   Having a purchasing agent that is buying too much or too little can cost companies lots of money.    I am not blaming the purchasing agent.  If they don’t have the right tools in place to notify them when materials need to be purchased based on lead times, min/max,  demand, or a forecast then they don’t know when or what to purchase.   There is nothing worse than having a large order that needs to go out the door by the end of the week and not having the resources such as, capacity, raw material or containers in stock to complete the order.  You can end up paying extra for freight costs to get the material delivered or you have to pay a premium since your cheaper vendor is out of stock or too far away to ship in time. 

If you overbuy then you also have several risks: costs for  inventory sitting on the shelf; perhaps it has a shelf life.  I went to a CCAI (Chemical Coaters Association International) meeting in January and the presenter Roger Talbert, talked about a coatings company buying three 55 gallon containers of water based paint that they only used about a gallon of a month.  Of course the paint went bad and could not be reformulated.   The explanation was that they got a better price on buying 55 gallon containers, three at a time.   However in this case they actually paid for more material than they needed and nearly all of it had to be scrapped.   How much did that cost this coatings company? 

I have also been to companies that print out their work orders or batch tickets then walk the warehouse looking for the raw materials needed.  Then they purchase what is missing since they do not have a good ERP system in place.  Often times their production is at a standstill or they are producing products for customers that are not a priority or making for stock.   

Writing this article made me wonder what the exact statistics are for technology and how it affects manufacturing.  I perused the Internet and found this article on the http://www.manufacturing.gov/report/index.asp?dName=report  website: Competing and Winning in a Global Economy.     This article is the first of 3 chapters of a comprehensive study that is the result of President George W. Bush’s Manufacturing Agenda during National Manufacturing Week in Chicago on March 5, 2003.

Here is an expert from page 22 and 23:

In 1987, in a review of the book Manufacturing Matters, Nobel Prize-winning economist Robert Solow famously observed, “You can see the computer everywhere but in the productivity statistics.” In the latter part of the 1990s, however, the evidence of the computer’s effect on productivity finally surfaced. Compared with the relatively slow rates of productivity growth experienced between 1973 and 1995, labor productivity grew “roughly 1.2 percentage points [faster] a year from 1995 through 2000, a rise of more than 80 percent” above the previous trend line.  Investments in information technology are estimated to account for 60 percent of that increase in productivity.

Computers have also made possible most of the revolutions in business processes as well. In the absence of the computing power available today, concepts such as “just-in-time” production and “demand-pull” manufacturing processes could not exist in their current forms.1  The dramatic increase in computing power has created an ever more powerful tool for developing new products, lowering production costs, raising quality, measuring performance, and managing business.

Computer software and technology in general should be an investment that manufacturers should include in their budgets as well as plant equipment and maintenance.    Most technology partners such as CIS try to make these expenditures affordable through the use of financing, software as a service,  and most importantly by improving productivity and reducing inventory costs.   The Section 179 Deduction can also be used for computer software.  Please also see my article on the Section 179 expensing computer software in 2011.

Custom Information Services or CIS is a Microsoft Dynamics GP reseller in North Texas.   If you would like more information on our product and service offerings for manufacturers, please contact me through email at nphillippi@customis.com or by phone at 817-640-0016 x 109.

by Custom Information Services

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If you are a manufacturer you are probably already aware of what the FDA does regulate: 

• foods, except for most meat and poultry products, which are regulated by the U.S. Department of Agriculture
• food additives
• infant formulas
• dietary supplements
• human drugs
• vaccines, blood products, and other biologics
• medical devices, from simple items like tongue depressors, to complex technologies such as heart pacemakers
• electronic products that give off radiation, such as microwave ovens and X-ray equipment
• cosmetics
• feed, drugs, and devices used in pets, farm animals, and other animals
• tobacco products

Small and mid-sized companies have the same FDA requirements as large companies but with significantly fewer resources.  Luckily there are software packages for the small to mid-sized manufacture that can help with compliance such as Dynamics GP and Vicinity Manufacturing. 

When reviewing software for your manufacturing company keep the following in mind:

• Does it have cradle to grave lot tracking?  Keep in mind that garbage into your system will get you garbage out.  Lot tracking within a computer system is difficult even for the most disciplined companies.  Perhaps you could start tracking a couple of your highest volume raw materials and finished goods, and then add more as you get your processes worked out.  Of course, keep another record of your lot numbers during this process.  See my article on Serial, Lot Tracking and Traceability for Manufacturers.    
• Can the software run a lot recall report in a matter of seconds?
• Will the software handle bar-coding for receiving, shipping and production?  Your company may not be ready for the handheld expense of bar-coding and a wireless network, however you may want to add this in the future.  Make sure your system can handle this feature along with RFID. 
• Does the software have a strong quality control module?  Can you record QC results throughout the manufacturing process including receiving the raw materials?
• Can you print nutrition labels, certificate of analysis (COA), or Material Data Safety Sheets (MSDS) that are data driven by your recipe or formula manufacturing?
• Can the software store and track results by batch for our HACCP guidelines and compliance? 
• Are the formulas and recipes secured to make sure production manufactures only approved products?
• Is there electronic audit tracking available and electronic signatures?

These items are just a few compliance requirements that I can think of for food and cosmetic manufacturers.  

Custom Information Services is a Microsoft Dynamics GP reseller in North Texas and has specialized in selling and implementing recipe / formula based software to mid-sized companies for about 20 years.  We recommend Dynamics GP and Vicinity Manufacturing to meet all the objectives listed above. 

If you care to comment on the information above or have any questions please feel free to contact me at nphillippi@customis.com.

by Custom Information Services, North Texas Microsoft Dynamics GP Partner

Is Food, Cosmetic, and Drug Manufacturing Software FDA Approved? is a post from: ERP Software Blog

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The proper definition of Manufacturing is the use of machines, tools, and labor to produce goods for use or sale.  It is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale.  Whether process (the branch of manufacturing associated with formulas and recipes) or discrete (concerned with bill of materials and routing), ERP (Enterprise Resource Planning) systems typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and accounting for a company.  However, just like the products they produce, discrete and process manufacturing software address different business issues and solve different problems.   

All manufacturers need sales and invoicing tools, financial modules such as accounts payable, general ledger, and a very strong financial reporting package.   The differences are usually within inventory tracking and costing, units of measure, batch and fill tickets for the process manufacturer, bill of materials for the discrete manufacturer.   These are just a few of the operational differences and I could probably bore any reader with the details…  

Understanding these differences would lead to the conclusion that different manufacturing software for different types of manufacturers should be in place depending on what is produced.  However, often times that is not the case.  Manufacturer business owners often do not realize that they are creating extra work completing ‘work arounds’ and that their inventory is probably not valued correctly if they are running a discrete manufacturing package but are in fact a process manufacturer. 

Over the years I have encountered many process manufacturers that were indeed running their operations on a discrete software package that did not convert pounds to gallons to eaches correctly or even consider the density or other physical properties to make the conversion.    In fact, once upon a time we proved to a company that they had been calculating their inventory costs incorrectly due to conversion factors for years.   Of course they were using a software package that was designed for eaches only.  It is true that in some cases a discrete software solution can accommodate a simple process manufacture.  Overall that is not the case.  Chemical, cosmetics, pharmaceutical, and most food companies need a true process manufacturing solution.     

If you are a process manufacturer or even mixed-mode and your company is on a discrete manufacturing package, when it is time to change or upgrade your system please look at a true process manufacturing software package.  If you aren’t sure what your software package is designed for, then just go to the software’s home page and if it does not have a statement or link to your industry then odds are it is not the right operational package for your business. 

Good examples of process manufacturing packages for small to mid-sized companies are as follows:

• BatchMaster for Dynamics GP
• Vicinity for Dynamics GP
• Horizon’s for Dynamics GP

All three of these packages provide the process manufacturer with the operational solutions needed along with strong financial and distribution solutions for the process manufacturer.  

A couple of great discrete manufacturing software packages are:

• Dynamics GP Advanced Management Suite
• Horizon’s Manufacturing

At Custom Information Services (CIS) we understand that each business has unique requirements and how to use software technology to meet these challenges.  CIS has been working with manufacturers since 1989.  For more information, contact Nancy Phillippi at (817) 640-0016 x 109  or email nphillippi@customis.com

What Kind of Manufacturer is Your Company: Process or Discrete? is a post from: ERP Software Blog

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There could be many reasons why inventory control is such a pervasive problem:

1.  The use of separate accounting/financial systems for the inventory and manufacturing systems. Raw materials are ordered on one system and manually updated in another system.
2. The purchase receipts are not completed in a timely and correct manner.  Raw material is received at the wrong cost or wrong quantity.  Human error.  By the time the vendor invoice arrives the raw material has been consumed. 
3. Raw material quantities are purchased on one unit of measure but consumed in another unit of measure with incorrect conversion methods.
4. Quality control is not tracked therefore inferior materials are hitting production causing production to use more than the formula or batch ticket calls for.  Production is not recording actual. 
5. Not inputting quantities used for production or staging in a timely manner to relieve raw material inventory.   Not having a work in process (wip) of the manufacturing process takes several steps and time. 
6. Cycle counting is not in place.  Physical inventories occur once a year.   Once a year is pretty extreme!  Some companies complete this task once a month due to poor inventory controls. 

The majority of the companies I encounter with these problems are using two or more systems to manage their business.   Sometimes one or more of the business tools is a spreadsheet.  I have nothing against spreadsheets as long as they actually tie back to a database that is driven by real transactions.  One system for accounting and one system for manufacturing  makes no business sense to me.  This use of disparate systems can cause many problems; one being inventory control.    If you are selling out of one system and manufacturing in another how do you know what your demand is for production?  Is someone taking the sales orders and then filling out a production schedule?   Then someone is updating one system with the finished goods to ship and invoice… I have to enter vendor invoices into the accounting system to cut checks, but I am purchasing in another system…  Confusing?  This scenario demands a lot of manpower just to function on a day to day basis. 

These problems of course point to operational and personnel issues, but they also point out to the need for an integrated financial and manufacturing system that is inherently designed to track items 1 – 6 and more.    A  production and material planner should not be spending his days looking for raw material in your warehouse;  he should be on the phone getting you the best price available for the items. He should be able to feel confident that your system data is accurate and so should you.

Custom Information Services is a Microsoft Dynamics GP reseller in North Texas and has specialized in selling and implementing formula based software to mid-sized companies for about 20 years.

If you care to comment on the information above or have any questions please feel free to contact me at 817-640-0016 x 109 or by emailing me at nphillippi@customis.com.

Custom Information Services is a Texas Microsoft Dynamics GP Partner

Formula Manufacturers: Inventory Control Issues A Recipe For Disaster is a post from: ERP Software Blog

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The lack of a good scheduling tool is costing manufacturers money due to poor staff scheduling, missed production time, delivery time promises wrong,  the time just to come up with the schedule, and what if it changes?  What if your number one customer calls in and request you move up a delivery date?  The question is this; what is all this time worth to you?  I know the term Return on Investment can get eyes rolling, but this ROI is hard to pass up…

Many ERP packages do have a schedule that is inherent to the software but it may be limited to constraints such as finite capacity planning (no limit to my plant resources).  This has been an issue for some of our clients and the workaround has been to size all batches to the maximum allowed for the equipment being used.  For example I have demand for 1,000 gallons, I have a 200 gallon mixer that is used for this formula, so I ensure all formulas that need this mixer don’t exceed 200 gallons.  I may have to split 5 work orders up to get to my 1,000 gallon demand.   Regardless I do have to make 1,000 gallons to fill an order or forecast for stock.  Maybe I have clean-up after each batch or worst case; the mixer goes down.  Perhaps your company manufactures products with allergens.  You know how difficult it can be to schedule.  These are scenarios that could occur every day in the life of a manufacturer. 

I am very pleased that there is an affordable graphical scheduling system from PlanetTogether for Dynamics GP, Vicinity Manufacturing (formula/recipe) and Horizons (mixed mode) that can address these real day to day issues.   Affordable is a key word!  In the past only the big boys could implement such a time and resource saving tool. 

I am listing just a few of the PlanetTogether features:

• Product Specific Resource Assignment
• Physical Properties Constraints (could be allergens)
• Quantity, Quality or Other Assignment Limitations (perhaps packaging size or quantities like the 1,000 gallon example I gave above)
• Schedule by Inventory Constraints
• Customer Priorities – Ranking
• Clean-up/Sanitation or Maintenance Time
• Batch Processes (time varies by equipment size)
• Create and Share Information in Real Time

I am also listing a few ROI benefits!

Revenue Increases

• More orders due to increased on-time, reliable delivery and higher resource utilizations
• Win rush orders by quoting shorter dynamic (not fixed) lead times
• Sell planned idle capacity before it’s lost

Cost Reductions

• Cut labor costs by increasing resource utilization and tracking
• Cut expediting costs by increasing predictability
• Cut material carrying costs by synchronizing purchasing & production
• Cut finished goods carrying costs by producing more just-in-time
• Cut overtime costs by level-loading resources
• Cut capacity expansion costs due to reduction in setup frequency
• Cut production costs by optimizing product changeovers.

As you can see from this information a production scheduling tool would be of great benefit to your manufacturing planning.  If you are using a spreadsheet or a scheduling tool that does not integrate to your production software, then I would recommend that you and your team take a peek at PlanetTogether. 

If you care to comment on the information above or have any questions please feel free to contact me at 817-640-0016 x 109 or by emailing me at nphillippi@customis.com. 

Custom Information Services is a Dynamics reseller in North Texas.

Warning Graphical Material: Where is My Production Schedule? is a post from: ERP Software Blog

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Chemical and paint companies have more choices now in choosing the right software for their business.  Custom Information Services (CIS) started helping our area paint and chemical companies in the mid-nineties by selling BatchMaster with the Platinum interface for accounting.  We have seen software companies try to meet this industry by releasing packages to meet this niche marketplace.  Some good packages and some very bad packages.    Keep in mind that these companies are process manufacturers, not discrete.  Paint and chemical companies  need formula management, formula security, multiple units of measure, physical property information, material data safety sheets, controls and documentation for hazardous materials, etc.  that are easy to manage and give you accurate inventory costs.  Margins are slim in this industry and inventory costs along with good customer service are a critical part of doing business. 

Based on our years of working with these types of companies CIS understands these business issues and our sales (me!) and consulting team have years of experience with this industry as well.   A few years ago CIS made the business decision to add another software package to our product offering for several reasons.  One being that I lost a couple of software deals to Dynamics GP!  My take on this is if you can’t beat ‘em then join them!  When asked why they purchased GP over our other package the response was the same; more functionality for the bucks and the technology based on Microsoft SQL made all the difference.  I am very glad that we made this decision since I am not seeing any development and declined support from the other package we represent…which by the way is very disappointing. 

The good news is that Dynamics GP along with Vicinity Manufacturing is the perfect solution for paint, chemical, and any process manufacturer.  Refer to my past article; Process, Discrete and Mixed Mode Manufacturing; 3 Business Issues – 3 Dynamic Solutions!

With our solution offering customers can get rid of MSDS Word documents; if their MSDS is dynamic and they have the need.  Vicinity notifies the end user if a new MSDS needs to be sent based on changes to the formula.    Of course input for raw material physical properties has to be accurate!  And of course that feature is available in Vicinity. 

Formulas can be secured and not accessible if they are still in R&D or other statuses.  If a customer calls and wants to know what you shipped them last year, the software can tell you exactly what formula based on the batch ticket was made for that order.  Formulas are called a bill of materials in discrete packages.  Batch Tickets is often the terminology used by process manufacturers that the discrete manufacturer calls a work order. 

The great thing about this solution is that a proven system such as Dynamics GP includes superior accounting and distribution with a total integration to Vicinity Manufacturing.  Vicinity addresses the formula manufacturing team from the product developer and product planner to the production manager and quality control tech. 

There are many other items I could discuss such as commission structures (I think most process or formula manufactures change commissions on a daily basis!), lot traceability, complex pricing, etc., however the point I want to make is this;  if you are a paint and chemical company please take the time to look at several software packages including Dynamics GP and Vicinity Manufacturing. 

If you care to comment on the information above or have any questions please feel free to contact me at 817-640-0016 x 109 or by emailing me at nphillippi@customis.com. 

by Custom Information Services -  Dynamics reseller in Dallas, Fort Worth Texas.

Chemical Manufacturing; MSDS, Formulas, and Microsoft Dynamics GP is a post from: ERP Software Blog

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These differences are only the beginning of a long list of incompatibilities that process and discrete manufacturers have to deal with daily.  Granted, some of the issues are the same; all need a general ledger, accounts payable, accounts receivable, bank reconciliation, sales order, purchase order, and other distribution type features.   However, in nearly every company I have encountered, these two types of manufacturing companies have very distinct inventory and bill of material needs.   Process manufacturers require formulas/recipes, containers and labels for their bill of materials.     They need pounds, gallons, ounces, liters, milliliters, grams, etc.  Discrete manufacturers need eaches, perhaps lengths of material too such as like wire in a roll and/or by the foot.  Most discrete software packages do not understand a conversion of pounds to gallons, or a liter to an ounce and nor are they able to use this same conversion factor on a bill of material.

Needless to say most software packages do not handle process and discrete manufacturing processes both well  at all.   I get very frustrated with other vendors that try to or do sell a discrete manufacturing software package to a process manufacturer.  The customer invariably has had to change their processes to fit the software and usually have a major customization to boot.   Even so, the customer is not happy and neither are their customers!    The good news is that there really are packages that can handle both process and discrete manufacturing.

All of us have had to also deal with food recalls at some point; check your cookie dough, peanut butter or spinach lot numbers lately?   Food and beverage companies have to be able to report lot numbers from their vendor raw materials to what they ship as the lot on a finished good.   Lot tractability and reporting is a key factor in determining if a software package is right for these industries.   They also have many other requirements mandated by the FDA, such as the FDA must be given advance notice on shipments of imported food as well as label and health claims. Companies that process meat from the cow or pig to the finished good could have issues with catch weights  too.  Catch weights refer to the actual weight of variable-weight items that use weight as the sales unit of measure.

Chemical companies have to deal with lot traceability for product pigments and/or hazardous material tracking, viscosity issues, material safety data sheet (MSDS) reporting, to name a few.   Cosmetic producers also deal with the FDA and have a combination of issues that Food and Chemical companies contend with daily.

Granted, discrete manufactures often deal with serial numbers, at least in most cases there is only one serial number per part.  In the case of the process manufacturer there may be numerous lot numbers in a finished good that must be tracked.

After years of representing a Sage product for process manufacturing, accounting and distribution,  a couple of years ago Custom Information Services recognized the need to find a more long term solution for our customers and prospects.  I completed months of research and made the recommendation to our team that  Dynamics GP for core accounting, distribution and discrete manufacturing was by far the best product available.   For mixed mode manufacturers, we have Dynamics GP and Horizon’s Manufacturing.  For process manufacturing; Dynamics GP with Vicinity Manufacturing.

I have discussed a few of the issues manufacturers have to deal with, there are many, many more.  I find this industry very exciting to work with.  It is fun to learn about new companies and processes and then provide solutions to the business issues and pains.  Call me and let me help your business!   I really do have a most interesting job!

If you care to comment on the information above or have any questions please feel free to contact me at 817-640-0016 x 109 or by emailing me at nphillippi@customis.com.

Custom Information Services are Process Manufacturing Software Experts in Dallas, Fort Worth Texas.

Process, Discrete and Mixed Mode Manufacturing; 3 Business Issues – 3 Dynamic Solutions! is a post from: ERP Software Blog

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