Metal fabrication isn’t the same business it was a decade ago, or really even five years ago. With customers demanding that everything be faster, cheaper, and more complex, the only way to succeed is to have deep knowledge and analysis of every single thing happening in your shop-- in real-time. Not an easy task.
Today’s fabricators have to coordinate all the moving parts at a moment’s notice: supplies and suppliers, in-house operations, job runs, machines and scheduling, maintenance, quality inspections, tool maintenance, labor, inventory, work-in-process (WIP), client requirements, and delivery schedules. And that’s just for starters.
This consumer-driven environment requires you to be detail-oriented, nimble in response to changes in the market, and open to technologies that can improve results. Whether your business is metal fabrication, metal supply, manufacturing, distribution, machining, or some other related part of the industry, modern ERP software, is the only way to boost lead times and make a difference to your bottom line.
Choosing the right ERP software isn’t easy. How can you know which ERP program is the best for your metal fabrication business? Where will you find the time to dig deep into the options that can sustain your company in the future?
The purpose of this blog is to help you get familiar with what ERP software can (and can’t) do for your business. We know there’s a lot of information here. At CUMULA 3®, our goal is not to overwhelm but to educate you on some of the ways that implementing NetSuite could make a positive impact on your manufacturing business. We are proud to support manufacturing, and we’re convinced that NetSuite has the tools to help make your shop more successful. If you want more information on how we can help, reach out to us-- no matter where you’re at in your journey.
Now let’s take a look at the 8 things that metal fabrication shops need to know about Enterprise Resource Planning (ERP) software.
There’s no reason to sugarcoat it; labor shortages are probably the largest problem facing manufacturing today. It’s become almost impossible to find and retain reliable workers. And skilled veteran employees seem to be retiring in record numbers.
There’s a lack of talent combined with a lack of experience, and workers are forced to move up the ranks faster than they probably should just to get jobs out the door. Even entry-level, semi-skilled positions are hard to fill due to multiple factors in today’s employment landscape.
The good news is that a solid ERP system has tools for handling Human Capital Management (HCM). It’s essential software because it can help you maximize the people you already employ and helps you retain new employees coming into your organization. HCM software is sometimes called a Human Resources Management System (HRMS). It’s a suite of applications designed to help you acquire, develop, manage and optimize your workforce.
HCM manages your company’s two most important assets: people and capital. It gives you tools for making the most of the talent and skills already in your pool and can help you achieve staffing objectives now and in the future.
HCM is also a way for employees to engage with you. It’s a tool to help workers progress their skills and responsibilities and develop their careers. Employees quit companies when they don’t think that management cares about them or if they believe there’s no way for them to grow their careers. HCM is a way to keep staff motivated and engaged in their future trajectory.
Thoughtfully chosen HCM modules provide a way to let employees know you’re committed to their professional development. And when employee skill sets and career paths are developed, there’s an increase in their satisfaction, making them less likely to depart.
HCM systems are capable of measuring employee behavior through predictive workforce analytics. Key benefits of this practice can help you:
HCM components help companies manage three important things: Talent acquisition, talent management, and workforce optimization. When HCM is used to its fullest, your HR becomes a valued business partner and helps you make workforce decisions based on data.
You can increase employee satisfaction, get higher retention rates, gain more engaged employees, and offer more efficient recruitment. A benefit of satisfied employees is that they are more likely to refer people to open positions, so you won’t have to look high and low for new hires. HCM won’t solve all your labor problems, but it can go a long way to help.
What if you could automatically balance demand and supply, making sure you have inventory in the right place at the right time? Inventory and its relation to schedules are one of the most important (but also complex) jobs within manufacturing. Improving scheduling alone may be a good reason to purchase a new ERP system. Many manufacturers have learned that better scheduling is directly tied to shorter lead times and less money tied up in inventory that’s sitting around waiting.
A recent NetSuite seminar uncovered these issues as the biggest issues facing manufacturers when it comes to inventory:
NetSuite‘s ERP framework takes on inventory management issues and streamlines the inventory process by offering:
You may struggle with on-time delivery because of an inability to measure your actual available capacity, which isn’t always easy for manufacturers. A high-product-mix scenario in which machine cycle times vary greatly can make it especially difficult. For years, the challenge has always been to find a solution that has the complexity to get you what you need without sacrificing usability. NetSuite's Production Scheduling solution makes it possible to realistically schedule jobs.
Some key benefits of real-time scheduling include:
Every fabricator is working with their own unique requirements, so the ERP allows configuration for many things: setup and run standards, lag and hold time, batch job configuration, asset and labor requirements, detailed work instructions, and inspection plans and tolerances. However you use it, improved scheduling is a way to maximize resources.
Successful manufacturers and metal fabricators know how to leverage cash flow. You know that getting the product out faster only increases cash intake when you get paid. So you ensure work flows quickly-- from receiving to shipping and all the steps in between. But what then? You’ve got to make sure customers pay on-time
But how do you track outstanding payments and manage all this manually? The answer: ERP has available modules built for tracking receivables, along with other essential accounting functions that can improve cash flow.
Collecting receivables is a vital part of your balance sheet. NetSuite accounts receivable (AR) enables businesses to easily and quickly generate and send invoices, define credit terms, and manage collections.
By getting real-time insight into receivables, you can check the status of payments any time and sort the data as you need it. NetSuite automates manual processes and can issue digital invoices along with multiple payment options. You can see the oldest outstanding payments or sort by multiple variables.
NetSuite ERP is an end-to-end accounting solution that lets you manage cash flow and revenue, automates quote-to-order fulfillment, and integrates planning and budgeting. If you tend to have a reliance on Excel spreadsheets or QuickBooks and are spending multiple hours every day (or week, or month) doing manual processes, you owe it to yourself to reexamine those routines.
NetSuite is a huge benefit over spreadsheets and QuickBooks because it provides a real-time view into customer aging, invoice analysis, recurring invoices, and deferred and recognized revenue calculations, giving you exception reports to flag account anomalies. Essentially, a good ERP system can save you time and help you get paid faster.
All businesses are accountable for the status and value of their fixed assets, even items that are lost or unusable. As you probably already know, managing a physical inventory of expensive fixed assets and maintaining the correct valuation is almost impossible to do manually.
Of course, many fab shops do keep track of assets manually in Excel, but that can leave a lot of room for error. The downside (apart from wasted time) is that doing it poorly can result in overpaid taxes and interest, regulatory fines, and loss of productivity.
The NetSuite Fixed Asset Management solution gives you visibility and control by managing the entire life cycle of assets. You can get a handle on everything -- from asset creation to valuation, depreciation and retirement -- all in one place. The system provides a single version of the truth for all assets, including a flexible fixed asset calculation engine and complete reporting capability.
There’s no keeping track of separate systems; everything is automatically integrated with financials. The system can create accounting entries with alternative methods of asset depreciation for tax reporting purposes. None of your equipment can slip through the cracks like it does on a spreadsheet.
With fixed asset management, you can:
Out-of-date information can lead to overvaluation and overpaying, so fixed Assets Management is important if you want to keep accurate records that save time and money.
A necessary part of production management is Quality Assurance. As a metal fabrication business, you know you’re responsible for delivering products that meet safety requirements and quality requirements, as well as meeting customer demands.
To achieve this, manufacturers must monitor many areas in the manufacturing process through quality capture and reporting. Policies, practices, dashboards, reports, accurate data, and standards can be monitored through ERP. It’s the best way to gain access to reports and process control.
NetSuite Quality Management gives you a way to formalize and automate policies, standards and practices so that you can deliver the highest quality with the least overhead. You can quickly and easily select the tests you want to perform, set parameters to evaluate results, and define policies for testing at receiving and during the production process.
NetSuite automatically tells inspectors what to test and when and collects results, executing remediation workflows as required. The National Association of Manufacturers (NAM) released data that there are 297,696 federal regulations that govern the manufacturing industry. So although you are probably not subject to all those rules, you can be prepared for the ones that apply to you.
You’ll feel more confident when you can access reporting data at a moment’s notice or review all of your historical records with a simple file request. You might even find it useful to create checklists in anticipation of scheduled visits. Customize your dashboards to easily access everything you need on hand during an unplanned visit.
NetSuite "plays well" with other software systems. Many manufacturers have integrated their inspection software directly into the ERP program to streamline these processes even further.
Shop floor control is something that manufacturers spend a lot of time on. When an order comes in, you need to know if you’ve got the personnel, skills, and equipment to handle it. Managers spend significant time and effort trying to predict the future with planning and scheduling applications, but it’s tough to predict without data.
By recording what, where, when, why, and how your products are currently being manufactured, you get data that are critical for accurate scheduling. NetSuite's Shop Floor Control and Mobility solutions make it easy to quickly and accurately gather this information throughout the manufacturing process.
Shop floor control through NetSuite can provide the real-time status of orders and materials anywhere in the shop. It can also plan and execute the routings necessary to produce the product with the fewest bottlenecks or constraints. The shop floor isn’t far away when you use NetSuite's interactive tablet application and traditional barcoding to send data.
Key Benefits:
In today’s market, where the same machines and tools are available to everyone and prices are competitive, one of the best ways to make your business stand out is to deliver world-class service.
Your customer experience is something unique to your shop. If you can take the time to treat every single customer with personalized attention, you might be surprised at how loyal they can be. The NetSuite Customer Service Management module can make every interaction stand out, both for internal and external clients.
While the other improvements you’re making are more behind-the-scenes, this part of ERP software offers an improvement that customers can personally see. Their buying experience is improved and time spent processing orders is reduced.
An ERP upgrade might also allow you to get quotes out faster, with deeper integration between sales, processing, and the shop floor. Order processing and scheduling can begin to become more automated. With an improved customer service interface, you’ll be able to sell, process, and quote faster so that you can focus more time on growing your business.
It’s been said, “From the shop floor to the top floor", NetSuite is an industry-leading ERP system for manufacturing business, especially for metal fabricators. At CUMULA 3® Group, we’ve been providing NetSuite solutions for metal fabricators since we launched in 2014 because we've seen first hand the transformational impact NetSuite can have on a business.
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