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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Unfortunately, small and medium businesses don’t have the same focus in their adoption, integration, and management of technology.  Most often SMBs take a reactionary approach to their technology – creating disruption and additional cost to the business.

Avoid falling into this trap by understanding and working toward overcoming the following common mistakes:

• Weak Internal Technical Support:  Often technical support is assigned to the employee who is the ‘computer geek’-type.  They perform these duties in addition to their regular job responsibilities.
• Keeping Older Technology Too Long:  It is a well known fact that older technology needs more repair and fails more often – leading to business downtime. It doesn’t accommodate new, lower cost features and functions designed to increase productivity and lower expense.
• Not Keeping Software Licenses Current:  When a business doesn’t keep their software licenses current they miss out on critical updates, don’t have access to technical support and hold their people back from being as productive as possible.
• Training as a Last Resort:  SMBs often assume an employee knows how to use the technology or that the employee will ‘figure it out.’  Instead, you should offer training to your users as a mechanism to increase productivity – especially when you introduce new technology or applications.
• Poor Technology or Information Security:  Most businesses use passwords to access networks and email.  But, often they don’t have policies or tools to ensure the right level of information and technology security needed to adequately protect the business from external intrusion, theft, or disaster recovery.
• Sporadic Data Backup:  Many SMBs back up their critical applications and information right after they have had a failure.  At this point, it is too late.  Having the right policies and tools to regularly backup business information will keep you out of future trouble.
• Inadequate Virus/Spam Protection:  Viruses and spam represent a large problem for SMBs.  Both rob the business of productivity, time and money.  SMBs must go beyond simple PC-based tools to ensure the best protection of your systems, information, people, and budget.
• Allowing “Personal” Applications on Business Equipment:  Because most SMBs don’t manage their technology, individual employees are free to add their own personal images, software applications and information – often leading to poorly performing systems and security breaches.
• Open Wireless Networks:  With the ease and proliferation of wireless networking, many SMBs accidentally leave their wireless access points open and available for anyone to access.  This huge vulnerability puts your systems, information, and business at risk.
• No Laptop Security:  As employees work at home or travel, they take critical business information with them.  SMBs often forget to encrypt or protect critical information from accidental theft or loss when the laptop is lost or stolen.

By NextCorp, Ltd., Microsoft Dynamics GP Partner for Texas

Top 10 SMB Technology Management Mistakes 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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You love QuickBooks.  QuickBooks may have been good to you.  But maybe it’s time to move up.

Your business has been using QuickBooks for years to manage customer accounts, keep track of inventory and business finances, create forms for your business use, and store information on your customers, vendors, and other contacts. You’ve purchased all 20 concurrent licenses, you’ve set into motion aggressive growth plans, and you’re ready to formalize the financial management of your company.  Now is the time to consider why you need to move beyond QuickBooks:

1.     Industrial-strength Information Security:  Small and medium sized businesses have the same information security needs as  large businesses.  You need the peace of mind that your company’s financial, customer, inventory, payroll, and reporting information is proactively managed, is backed up, has redundancy/failover capability, and is protected from external security intrusions. 

2.     Full/Tighter Business Integration:  In the global marketplace, it is critical that you consider tools that allow you to integrate your business to save money and integrate to your suppliers and customers for additional responsiveness and profit.

3.     Greater Productivity and ROI:  You want all of your employees using the best tools to manage sales order processing, inventory, customer relationships, payroll, and the like.  If you have more than 20 people who need access, it’s time to move up.

4.     Special/Unique Business Requirement:  Your customers and business are unique.  You need to have a financial system that adapts to your business, bringing you the greatest benefit.  Small and medium businesses should never have to compromise on taking care of business.

5.     Better Business Planning/Reporting:  To compete today, small and medium businesses need to have the best planning and management tools.  You need to understand where your business stands at all times, where your customers are, and have access to information to make faster, more informed decisions.

6.     More Transaction Capability:  A small and medium business should never be held back by their financial system.  Being able to handle more customers, vendors, inventory items, internal and external customer requirements – and all at greater transaction volumes and speed – are key to your businesses growth and success.

7.     Tighter Internal Controls:  Waste and internal process costs rob profitability.  Having tighter internal controls gives you the ability to reduce or eliminate waste, drive out costly processes, and create new incremental profits to your business.

8.     Full Financial Accountability:  Small and medium businesses need full audit trails, double entry accounting, rich business reporting, and automated processes just like large business.

9.     Business Differentiation and Advantage:  As you compete and grow, you need tools that directly contribute to creating advantages that your competition doesn’t have and differentiation that your customers recognize.  Your fully integrated financial system can provide new levels of responsiveness, customer satisfaction, and profitability to your business – making you and your business stand out from the crowd.

10.   You Want Help NOW!:  When a problem hits, you want it to go away right now.  Don’t spend time ‘browsing’ for answers or waiting for a support ‘call back’ or get charged by the minute for every problem.  Rest easy by getting the best, immediate application and technology support possible, right now – no waiting!

By NextCorp, Ltd., Microsoft Dynamics GP and CRM Partner for Southern Texas

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Under Section 179, businesses that spend less than $800,000 a year on qualified equipment can write off up to $250,000 in 2009.  The rules are designed for small companies, so the $250,000 deduction phases out when a business purchases more than $800,000 in one year. (Companies cannot write off more than their taxable income).

Benefits of a Non-Tax/Capital Lease 
The benefit of a Non-Tax/Capital Lease is that it can take advantage of Section 179 forexpense up to $250,000 on equipment purchased by  December 31, 2009.  In addition, you may depreciate any excess on the depreciation schedule or take advantage of the more immediate bonus depreciation.  Examples of Non-Tax/Capital Leases include a $1.00 Buyout Lease, an Equipment Finance Agreement (EFA) and a 10% Purchase Upon Termination (PUT) Lease.

Tax Code Section 179 & Election to Expense Detail

The election, which is made on Form 4562, is for the tax year the property was placed in service or an amended return filed within the time prescribed by law. The total cost of property that may be expensed for any tax year cannot exceed the total amount of taxable income during the tax year. Section 179 property is property that you acquire by purchase for use in the active conduct of your business.  To ensure property qualifies, reference Publication 946.

This expense deduction is provided for taxpayers (other than estates, trusts or certain non-corporate lessors) who elect to treat the cost of qualifying property as an expense rather than a capital expenditure.  Under Section 179 equipment purchases up to the amount approved for a given year can be expensed (deducted from taxable income) if installed by December 31st. Non-Tax leases qualify for this deduction in their year of inception.  Any excess above the expensed amount can be depreciated depending on the equipment type.  Not all states follow federal law.  Contact your tax advisor for further detail or visit www.irs.gov for specific detail.

Reminder:  To take advantage of the 2009 tax incentives, your business equipment must be put in use by year-end.  Each company should contact their tax advisor to learn about the specific impact to your business.

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 NorthTexas.

by Custom Information Services, a Texas Microsoft Dynamics GP Partner

Want To Lower The True Costs Of Your Microsoft Dynamics Software? Section 179 is expiring 12/31/2009… is a post from: ERP Software Blog

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Kronos, Microsoft Dynamics AX and Microsoft Dynamics GP have satisfied customers in many industries including; Aviation, Distribution, Government, Healthcare, Retail, and more. 

This move only confirms to Custom Information Services that Dynamics GP and AX will continue to lead Microsoft’s ERP offerings.  

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 Dallas, Fort Worth Texas.

Kronos Integrates with Dynamics GP and AX is a post from: ERP Software Blog

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