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8 Key Components of a Discrete Manufacturing ERP

April 29, 2022

Cloud-based manufacturing Enterprise Resource Planner (ERP) systems are quickly evolving with the times. With the added decrease in cost by selling Software as a Service (SaaS), meaning a subscription model instead of a one-time costly purchase, the discrete manufacturing ERP market has been growing by up to 10% yearly.

Your competitors are signing up for all-in-one ERP solutions that give them the data to make better decisions when they need to be made. How long can you hold out without one?

Discrete Manufacturing ERP Key Components

You’ve heard the line before: If you can hold it and count it, it’s discrete manufacturing.

So, what is a discrete manufacturing ERP? That would be an ERP that has been designed from day zero to help you manage everything related producing your parts as a discrete manufacturer. When an ERP is designed with the discrete manufacturer in mind, the ERP will help you break down your work processes – from raw materials into finished goods – more efficiently.

What you make may vary, but at the end of the day, your daily production processes will involve:

  • Parts
  • Bill of Materials
  • Production Planning
  • Purchasing
  • Inventory Management
  • Production Management
  • Quality Control
  • Shipping

Parts

Parts are what you buy and what you make. From fasteners and sheet metal to transmissions and bumpers.

One of the challenges for parts is revision control. When the part is revised, usually via ECN (Engineering Change Notice), the current revision has to be tracked. When that happens, all the places where that part is in use must also be updated. Here, an ERP (that understands the gears engaged by an ECN) shines in its ability to make a previously complex process simple. With screens and reports that quickly display linked parts and a central database that notifies your purchasing or manufacturing team of the required change.

Bill of Materials

The bill of materials is a list of the parts required to make a manufactured part. Below, you can see an example of a BOM tree, with the parts required to make an assembly (which itself would be a part). Based on your products, you can have multiple BOMs for a single saleable item.

BOM Tree

One of the challenges for the BOM is the same that affects parts: revision control. Here, having a centralized record of all the parts that go into the BOM, or the BOMs that include a part, makes tracking changes a simple thing. This includes the costs to manufacture a part and the time it takes to make it.

Production Planning

Production planning is a multi-faceted and integral piece of your manufacturing operations. Forecasting, scheduling, and capacity planning are all parts of a whole that your ERP can help you make heads of in a way that maximizes your productivity.

On of the biggest challenges for discrete manufacturing here is ensuring that your ERP can use the data you have set up on your many records to plan your material usage, your equipment requirements, and your labor and staffing. Here, a full-featured ERP that can see all your business units including engineering, purchasing, nesting, and HR can help you develop a solid long-term capacity plan and a very dynamic short-term plan that can take into account material or labour shortages and provide options to resolve them quickly.

Purchasing

Nothing comes from nothing. To make what you sell, you need something. Raw materials like sheet metal or lumber, fasteners like screws and nuts, or sub-contracted operations like painting or packaging. Acquiring these goods (or managing these services) is usually the job of the purchasing department. However, to know what to order and when, the purchasers need to have a plan. A good purchasing plan needs two things:

  • What does the customer want and when?
  • How long does it take to acquire and make the items the customer wants?

Most ERPs are built around a core Material Resource Planning (MRP) module that works best while all your data is entered. To put it simply, having access to a quality ERP with an MRP module built to account for a discrete manufacturers’ daily needs can drastically increase the purchasing departments productivity.

Inventory Management

You have to keep track of the materials that come in, are moved around, and ready to ship out. That’s the job of inventory management. Your warehouse staff need to know where everything is and where it should go. This means that you need a record of these transactions.

Challenges to older inventory management systems included how to keep track of all the papers being shuffled about and where to keep what. An ERP helps by tracking the location of every item in inventory. To improve the responsiveness and make sure everything is correct, an ERP must have integration with bar code scanners and an inventory app that displays your inventory in real-time.

Production Management

As production is humming along, your ERP system should be able to keep an active tally of what work order is where, how many pieces are done, how many are left to do, etc. Suddenly, you have a stoppage. A breakdown or an incident. Either way, once the problem has been cleared away safely, you may need to reroute operations to ensure your orders are fulfilled.

Unplanned downtime is a huge hit to your production plan and here an ERP designed for discrete manufacturers can help. By having dashboards available with real-time data feed from work centers, you can manage your work centers, approve overtime, and contact your client with an update. This can help you decrease the impact of that unexpected downtime. By having a constant stream of actual data instead of the original plan, your production teams can stay on top of their processes.

Quality Control

To put it simply: Scrap Happens. Be it from a poorly calibrated machine, an operator error, or an order error, scrap has a habit of appearing. Even daily production creates scrap, like leftover off-cuts from nesting operations.

Ensuring that defective product doesn’t make it to your customers is the job of your quality control department. Here, a Quality Management System (QMS) is ready to help your QC get the job done while meeting any regulatory or industry requirements. An ERP made with discrete manufacturing processes in mind can greatly improve your QC efficiency by having a built-in QMS module that can track simple quality measurements or more complicated ones, like failure modes and effects analysis (FMEA) or corrective and preventative actions (CAPA), to ensure you are in compliance and meeting your customers expectations.

Shipping

As your orders come off the line and they pass quality control, it’s time to pack and ship them off. For a discrete manufacturer this process can sound simple but, in reality, it can be quite complex with issues like: customer-provided containers, the order of what to load first, what number of parts to pack and how, etc. Getting this wrong at the dock can mean extra unloading time or damaged parts when you arrive at the customer location.

An ERP designed by a discrete manufacturer will understand the shipping process and design an ERP to smooth out any wrinkles with things like:

  • Container tracking
  • Packing directions and packing slips
  • Automated document generation, like bills of lading or customs documents.
  • Automated customer emails to notify them when their order leaves your shop

These items and more, like clone tag shipping processes and, again, bar code scanner integration can greatly improve your warehouse shipping process.

Conclusion

As a discrete manufacturer, when you are looking for a new ERP system that helps improve your productivity and profit, be sure to look for one made with your industry and processes in mind. OnRamp ERP was built specifically for a discrete manufacturer as a future-ready all-in-one ERP II system with one central database that can share all relevant info with all your business units in real-time.

ERPII System Evolution

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