How to overcome Common Manufacturing Challenges to increase profitability
As manufacturing involves a multitude of interdependent processes, manufacturers have to face several unique challenges. Apart from delivering products with consistently high quality standards, manufacturers need to manage strict time-to-market deadlines driven by demanding customers or seasonal demands alongside navigating from end-to-end supply chains. Dependence of successor processes on their predecessors and vice versa makes scheduling a challenging task. Through this article, we are discussing major challenges which manufacturing companies are facing and how to overcome these with the help of technology.
Global Compliances – Like other industries, manufacturing sector also has to remain compliant while conducting business. Manufacturers need to have complete visibility throughout their supply chain for their own compliance and that of their suppliers.
Poor Project Management – In order to stay competitive, manufacturers needs to adhere to extremely tight and stressful timelines. Poor planning, inability to steer project during execution and improper tools to measure project progress are few issues that can derail the projects, resulting in losing out on millions of dollars in potential revenue and profit by manufacturers. Unclear objectives, insufficient detailing of project plan, inefficient resource allocation and improper risk management are few key factors that can easily fail manufacturing project.
Intelligence from Machines – Some of manufacturing units lack smart machines. With smart machines, manufacturers can gather data that can help them implement predictive maintenance and improve productivity. Alongside predictive maintenance, implementation of IoT based smart machines can help manufacturers to monitor and analyze customer data in real-time and help predict when maintenance of an asset is required. Extraction & analysis of data enable manufacturers to leverage real-time data on cycle times, quality yields by machines, production run, utilization and other metrics.
Supply Chain Complexity – When contractors, vendors and other third parties are involved in the production process then it may lead to risk of error and miscommunication. Furthermore, if production is taking place at different locations by different teams then accounting for all the moving parts—materials, people, teams, quality, supply chains, product cycles, etc.—get tricky. With no real-time visibility of production at different places can result in big losses to manufacturers.
Forecasting – The expectations of customers are changing drastically as they need personalized engagement alongside consistent user experience at multiple touch points. However, many manufacturers are sticking to legacy systems which do not have advanced reporting capabilities to deliver estimation like how many items they should sell in the next few months or the following year. By analyzing customer behavior and shopping pattern, manufacturers can accurately forecast demand and can easily identify fast-moving and slow-moving products.
Inventory Control – In manufacturing industry, inventory management is a daunting task. Manufacturers need a real-time visibility of stock in order to avoid unnecessary purchases of raw materials and equipment. Furthermore, manufacturers need routine inventory audits to identify discrepancies between the numbers recorded in the company’s books and the actual number of items on hand. Inventory managers are required to make sure that raw materials are available to ensure sufficient production so that finished goods can be delivered on time.
Collaboration – In order to successfully deliver project, different departments need to collaborate instead of operating within each of their silos.
How to overcome above mentioned challenges?
As an all-in-one, cloud-based business management solution, Microsoft Dynamics 365 Business Central for Manufacturing can help manufacturers to overcome above mentioned challenges. With core capabilities across finances, operations, sales, manufacturing, and customer service, Dynamics 365 Business Central for Manufacturing enables organizations to streamline their processes in order to improve customer relations while aiming at growth. With Business Central, manufacturing companies can conduct business without silos. D365 Business Central connects your business to deliver a complete view of all the processes and activities while automates tasks, enabling your organization to focus on business.
Dynamics 365 Business Central is available at two price points: Essential and Premium.
Essential Licensing: This covers business areas that most businesses require in order to run their business.
Premium Licensing: This adds Service order management and Manufacturing, enabling manufacturers to overcome unique challenges of their industry.
Key Capabilities of Microsoft Dynamics 365 Business Central for Manufacturing (Premium License)
Financial Management – Dynamics 365 Business Central offers range of financial management capabilities such as managing payables and receivables, overseeing cash flows, and performing year and period closes. Furthermore, with Dynamics 365 Business Central, users can start posting to chart of accounts, general journals, and recurring journals quickly alongside managing inventory costs, and operational and departmental budgets. Business Central can be used to amalgamate financial data from multiple companies, so organizations can get a centralized view of all their arms for financial analysis. Business Central supports multiple currencies throughout, including in payables and receivables, general ledger reports, and resource and inventory items, and automatically updates currency exchange rates.
Customer Relationship Management – Dynamics 365 Business Central features certain core relationship management features that enable businesses to optimize their sales efforts. Business Central allows users to record and manage contact information for all their business relationships. These contact information can be used to target marketing campaigns.
Supply Chain Management – With D365 Business Central, manufacturers can have real-time overview of supply chain to deal with logistics. Manufacturers can track supply chain cycle, from managing orders and overseeing inventory. Business Central enables organizations to process sales orders, and post and manage transactions and receivables. Business Central helps manage inventory levels irrespective it is located in a plant, distribution center, warehouse, showroom, brick-and-mortar store, or spread across a number of sites, and even tracks and accounts for inventory in transit.
Human Resources – With Dynamics 365 Business Central, organizations can keep detailed employee records such as contacts, qualifications, and contract information. Managers can track employee information according to factors such as experience, skill sets, training, and union membership. With Dynamics 365 Business Central, employee absences can be logged, tracked, and tagged using reason codes.
Project Management – As an end-to-end business management solution, Dynamics 365 Business Central offers features as such as configuring jobs, scheduling resources, managing budgets and monitoring progress. These features will enable manufacturers to have real-time visibility of all the projects. With Microsoft Dynamic 365 Business Central, managers can register, group, and sell resources, as well as monitor and analyze usage to help inform estimates, manage costs, and plan projects based on resource availability. Timesheets in Business Central allow users to track hours logged for both employees and equipment, and keep track of allocation of resources by requiring manager approval.
Service Order Management – With Service Order Management, manufacturing organizations can deliver excellent service to their customers to enhance satisfaction level and brand loyalty. With core capabilities across service orders, service price management, service item management, service contract management, planning and dispatching, Business Central enables manufacturers to record and track information on service levels, response times, and service history of each contract.
Manufacturing – Users in the manufacturing industry can create production orders, produce and manage alternative versions of production bill of materials, and outsource particular operations within a production order to subcontractors. With Business Central, businesses can plan for and manage demand. With master production scheduling and materials requirements planning tools, manufacturers can create production and purchase orders based on demand forecasts and inventory levels. Machine centers can be managed with Business Central, and be aggregated into work centers to allow users to control capacity levels, and ensure work centers are operating at an efficient level. Business Central brings full capability of NAV to cloud with features like production orders, version management, agile manufacturing, basic supply planning, demand forecasting, capacity planning, machine centers, and finite loading.