Imagine going to the grocery store for coffee and the shelves are empty. Devastated, you approach the store manager only to discover that not only are the beans not on the next truck, they haven't been picked, roasted, packaged or shipped.
Sorry, no coffee for four to eight weeks. The U.S. workforce would be wailing in the streets. Productivity would fall to unprecedented depths.
Unrealistic? Ridiculous? Shopped for a sofa lately?
One of the true challenges for woodworking, manufacturing or nearly any capital-intensive industry involving short-run, complex production processes, is to more effectively respond to the customer. We made strides with just-in-time inventory management and manufacturing, but that was principally a cash-management protocol, not a delivery-driven one. JIT is more concerned about serving the business, less about serving the customer.
Delivering goods quickly
For U.S.-based manufacturers, particularly in the woodworking industry, a powerful response to lower-cost, overseas competition will be the ability to deliver goods more quickly. Now, if we could only figure out how to do that. Four to eight weeks is not the way.
Imagine a link from your customers, through your sales personnel to your design department, your engineering department, to the shop floor, to shipping and back to your customers. And, imagine this link using a single set of information to drive the entire process.
Time, effort and money would be saved. Your customers would feel in control of their inventories and the link to their customers, and your business would be more profitable.
Unrealistic? Let's look at how other industries are responding.
An exploding field of expertise that originated in accounting is Enterprise Resource Planning. Initially conceived as a way to allow customer payment information to be accessed at multiple points in an organization, even basic ERP systems now incorporate sales, warranty, service information and other customer contacts.
ERP is now expanding as a protocol. The concept is being extended to link information throughout an organization so that it can be accessed at unlimited points. The linked information should involve sales and order entry, raw materials and manufacturing data, packaging, shipping, delivery and payment information. The ERP database allows key personnel to view pertinent information at any point in the data stream to obtain real-time information and better serve the customer or the company.
A subset of ERP
Manufacturing Resource Planning is a critical subset of ERP, particularly for producers of finished goods. Since nothing happens without a sale, and no one gets paid without product, MRP speeds the link between sales and production. It takes control of production, providing real-time information at any point in the process. Inventory and restocking of raw materials, order and manufacturing data, production scheduling and shipping are all managed in greater detail with MRP.
In short, ERP and MRP use common data sets to provide company management with better information with which to make decisions concerning inventory, equipment utilization, personnel scheduling, cash flow and much more. The customer realizes the benefits of faster turnaround from order to delivery, lower costs and greater control over their purchasing activities.
ERP and MRP have been readily embraced within the packaged goods industry, where customization and JIT manufacturing are not an issue. When customers have a limited catalog of product to select from, the order, design and engineering process is essentially removed from the equation.
The challenge of ERP
However, in the woodworking industry, where we must strive to be profitable even when producing a single unit, adapting ERP and MRP is somewhat more challenging. The addition of customization, even in larger batches, complicates the process. Requiring that sales and order entry information also manage design, inventory and production functions requires a very clear and flexible data stream. That same order information must readily adapt to the needs of sales systems, accounting systems, CAD packages, machinery controls, inventory management and shipping and receiving.
The situation calls for a standardized data management protocol such as the WINStep Association is developing. It is not much of a stretch to suggest that the future of the U.S. woodworking industry depends on it. Adding ERP and MRP to enhance our customer relationships should be a priority for any company.
Competitive cost pressures and customer demands require change. We should be less concerned with speed-to-market, and more concerned with speed-to-Margaret, or Michael.
No more having to say you're sorry, that will be four to eight weeks.
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