Past couple of decades manufacturing organizations have focused on improving the quality of their business process to achieve operational excellence. ERP implementation is seen as an opportunity to re-engineer the existing business process, define / review Operational Excellence Metrics and ways to measure these metrics.
Continue reading "Operational Excellence Metrics – Implementation Considerations" »
In the current business scenario, manufacturing businesses are under pressure to outperform the prevailing economic trend. There is a need for a broader organizational perspective/metric that needs to be taken into account. Without this, it would result in the transfer of, if not addition of overall ‘waste’ to the organization.
Historically it has been observed that lots of projects experience cost, effort and schedule overrun or poor quality. In most of cases, the project end up taking alternate paths to fulfil the budget constraint and ends up delivering an inadequate product/application/service. Further changing market Scenario does create estimation overruns. In such cases is it ever possible to get a Perfect Estimation.
Tough times call for tough measures and that is what companies today are doing as a reaction to the recessionary conditions that have hit economies the world over. Every other day, newspapers and newscasters greet us with layoffs, impending bankruptcies, bailouts and other such grim news. Manufacturing companies, naturally, are not immune to the crisis afflicting financial companies. They are being indirectly hit by shrinking consumer demand and non-availability of easy sources of funding.
Continue reading "Operational Excellence in Recessionary times – An imperative or a distraction?" »
Continue reading "Redefine your measurements to stimulate operational excellence" »
Most Product companies flourish by rolling out newer versions every now and then. Most versions are mere bug fixes, is there a difference then in the fusion enabled Oracle R12 version, especially for Retailers who have been long waiting to get an integrated suite of applications to run their business!
Continue reading "R12 Upgrade - What's in it for Retailers?" »
The Directive on WEEE (Wastage of Electrical and Electronics Equipment) in EU notes that the content of hazardous components in electrical and electronic equipment (EEE) is a major concern during the waste management phase and recycling of WEEE is not undertaken to a sufficient extent. The WEEE directive places the responsibility of end of life (EOL) disposal responsibility of the products on the manufacturers either individually or by joining a collective scheme. This implies that the cost of disposal of the product and the harmful substances that it contains squarely lies on the manufacturer. The EU Commission has set new targets for recovery and reuse/recycling by 31-Dec-2008 for all EU countries.
Today’s global environment has placed increased pressure on Hi-Tech manufacturers to become more competitive and profitable. Global outsourcing activities have increased in importance and have increasingly emerged as a key strategic tool in achieving cost reduction, quality and delivery improvement, cycle time reduction, and improved responsiveness to customer, competitive, and financial market demands. It is estimated that a well planned and executed global outsourcing strategy can result in a cost savings differential of 15 to 25 percent when compared to manufacturing inhouse.
Using external suppliers to design, manufacture, ship and service products or components - has been a growing trend in recent years as Hi-Tech manufacturers have sought, among other things, to divest themselves of production capacity (and the inherent risks associated with owning capital equipment), lower their labor costs and maintain greater flexibility in the face of ever-shrinking product lifecycles.
Continue reading "Importance of Outsourcing to provide flexibility to Hi-Tech Manufacturers" »
A tough business climate as today's challenges corporations to introspect and reinvent themselves. This also provides businesses with an opportunity to improve their odds of success during a recession by striving to achieve operational excellence in all functional processes including manufacturing. One of the keys to improving operational effeciency in the shop floor is to identify and reduce non- value adding activities and waste as much as possible. Managing rework and scrap is one such area to focus on. Rework and scrap often constitute a significant proportion of work content and material handling in the shop floor, yet organizations rarely expend the necessary effort to systematically reduce scrap and rework in the plant and floor areas.
Continue reading "Shop Floor Strategies - Managing Scrap and Rework" »
To remain competitive in today's environment, manufacturing companies are looking at boosting their supply chain performance. One of the key levers for improving supply chain is 'cost reduction' at various stages of the entire chain.
Continue reading "Using Operational Levers To Boost Supply Chain Performance" »
Standardization helps businesses develop the ability to "consistently" deliver high quality products and services its customers. It drives manufacturing excellence by raising the efficiencies of operations by reducing process variability, adopting optimal procedures to complete work and then adapting those procedures as effective practice within the organization.
While most organizations understand the importance of process standardizations, there could be confusion with respect to the approach that should be followed. Businesses looking at standardizing its operations can look at the following approaches -
Are you having to deal with low percentage of on-time completions, high throughput times, frequent line down situations or high WIP? Obviously something is very wrong, particularly if you said "Yes" to more than one of the above. Having consulted for several discrete manufacturing clients has made one thing very apparent to me - a lean and agile manufacturing environment is not an option but an imperative for manufacturing industries to achieve operational excellence. All of the above were contra-indicators of operational excellence. A manufacturing execution system (MES) can support a manufacturing firm in achieving this very objective. An MES system works in tandem with a mainstream ERP system to execute, monitor and manage the production processes on a shop floor. Together with an ERP system, an MES system can nudge (or push, if required!) an enterprise into adopting standardized processes and at the same time creating key data elements for performance measurements.
Consider the ways in which an MES system can assist you:
In the first part of the blog, we looked at 7 key factors that an implementing organization should consider before deciding to go ahead with its ERP implementation project.
http://infosysblogs.com/oracle/2008/10/key_factors_for_success_of_erp.html#more
In this blog, we will analyze 3 additional factors that are also vital for success.
Continue reading "Key Factors for Success of ERP Implementations - Part 2" »
To put in simple terms, Reverse Logistics is the flow of Returned goods by the customer to a state where the product is disposed of, repaired, recycled or internally consumed. And because of the strict norms pertaining to disposition of goods in the high tech sector, this is a very strategic area.
Continue reading "High Tech Reverse Logistics: A Potential Cost Cutting Avenue" »
ERP Implementations are generally time consuming and expensive - more so if the implementation involves multiple geographies with different languages, different business processes, legal requirements and accounting norms. Companies typically go for ERP implementations with the aim of integrating disparate systems spread across different business functions so that the top management can get an integrated view of the operations of the organization. Optimal usage of an ERP system also leads to reduction in operational costs and supports strategic planning.
Continue reading "Key Factors for Success of ERP Implementations" »
We often see ERP Implementations failing because of lack of user acceptance for the new system. The user community is not convinced about the utility of the ERP System simply because they feel that they take a long time to execute the transactions in the new system.
Is there a solution to this? How do we make sure that from day one users start advocating about the new system. The answer to this question starts from the time the future state design of business processes is started. First question that any implementer should ask is" Is this the most efficient and lean way to deploy this process". "Are we deploying the correct tools and techniques offered by the package to design the future state business process?"
There is often a dilemma in the customer’s mind,whether to go for Localization or do a Customization. Here are some of the pros and cons of these two options:
Localization comes pre-built with the product and does not need to be developed. While it can be assumed to have already been tested, effort needs to be estimated for the further rounds of testing.
This is beacuse,Localizations are add-on features which might not have been time-tested to the extent the base application features are.Also,Regional requirements change, all the implications of which might not have been addressed in the Localization in a timely manner. There can always be a lead time between a new requirement and its solution through Localization.
Continue reading "Localization vis-a-vis Customization: Which way to go?" »
When there is a need to bring about large scale HRIT portfolio transformation (post merger, for example) it is important to use this opportunity to maximize the business value , while minimizing the TCO and risk of transition.
Infosys has a comprehensive framework, approach and accelerators to look at this transformation scenario in a global delivery model
Continue reading "Large scale HRIT Portfolio Transformation" »
Organizations who want to strengthen their ability to attract and retain employees at all levels to meet the needs of Organic and Inorganic Growth, need to have an Integrated approach to Talent Management. This would not only offer sustainable competitive advantage, but also operational benefits like reduced time to productivity, developing targeted capabilities, and Talent mobility across the organization. Integrated Talent Management is a lot more than yet another HR process. It is a mindset that goes beyond the rhetoric towards a holistic and integrated approach. Based on our experience, we’ve identified three critical elements to achieve Integrated Talent Management: Strategy Integration, Process Integration, and Technology Integration.
Across Industries, specifically utilities and process industries, because of their capital intensive environments, typically spend a substantial amount on indirect procurement, especially services. Typically services account for more than 60% of the indirect spend for companies in these industries yet this area has remained unexplored for either automation or transformation efforts.
The Services Supply Chain comprises of unique and complex activities. This is then the reason why streamlining the process coupled with adequate systems support can lead to a large savings in this area. But how do we really go about it? Our experience tells us that this is definitely possible and is a huge opportunity for savings. Oracle Advanced Procurement Suite with its Services Procurement processes help organizations in streamlining processes in achieving these savings.
Continue reading "Managing Indirect Spend? Slash costs and Save upto 20% of indirect cost" »
Forecasting has been rated as one of the top supply chain issues in the globalized world. Organizations are striving to predict customer demand as accurately as possible. Accurate forecasting kick-starts demand and supply chain planning. A large number of products-geography-customer combinations require system enabled forecasting capabilities. A holistic forecasting system brings in Statistical Rigour and Modeling, Dashboards and Simulation capabilities and automatically tunes its models to suit changing business requirements. Sharing here excerpts from one of our working paper – the criteria in choosing the holistic forecasting system.
1. Ability to Model Demand:
Ability of a forecasting system to generate forecast at the most granular level across Time, Geography, Product and Customer dimensions, with the highest accuracy. This will also decide how effectively the system has been able to model the business requirements.
2. Statistical Rigour:
Forecasting systems need to have exhaustive library of statistical models - starting from simplest to most complex. This can help in choosing the best forecasting model which truly represents demand, yet manages model complexity. For example, there are cases where a simple “Moving Average" model may be adequate, whereas there might be cases that demand more sophisticated models (such as “ARIMA"). Moreover, there might be occasions where a combined model is chosen with a weighted average of different models. As a result, the system should not only provide the means through which different models may be easily applied but also facilitate the collaboration between these models for a true representation of demand.
3. Accuracy and Forecast Generation Time:
The preliminary requirement of any forecasting system to generate accurate forecast may not be enough. For example, an organization requiring daily forecasts for the planning purpose may not be able to use the forecasting system if it takes 10 hours to generate forecasts, regardless of its accuracy. Timely availability of forecast is as important as the accuracy it provides.
4. Interpretability:
Statistical error measures (e.g. MAPE, MSE) are popular yet widely misunderstood and misinterpreted. Quite often, end-users are not equipped to interpret the forecasting accuracy through such error measures. Forecasting system should enable business users with dashboard capabilities that communicate such measures in visually interpretable mediums.
5. Accommodate external issues:
Selecting the best forecasting model may not be enough. In majority of the cases, accuracy could benefit from the consideration of external components. These components could entail information such as the dates of forthcoming national holidays and the occurrence of exceptional events such as marketing campaigns. Hence an automated system should be able to understand such components and should be able to seamlessly combine them with basic forecasting techniques.
6. Automatic self-tuning:
An automated collaboration of the various components generates an additional consideration. When various models are combined, collaborative operation and self tuning becomes a major issue. The challenge arises from the relationships among the models. Although manual operation is a solution, it is associated with two major problems. Firstly, efficiency is reduced due to the required time and secondly, selection of models may be compromised in order to choose simpler alternatives. Hence an automated process for self-tuning would increase the flexibility and efficiency of the system.
Excerpt from the working paper – Shah M., Owusu G., Shoban B., Balkundi N., “Improving Forecasting Accuracy of Traditional Demand Planning System” (2008)
Today, ERP is used more to drive business improvements & operational efficiencies and hence, any delays or budget over-runs could impact the business. However, most independent surveys and studies indicate that about 55 percent of ERP Implementation projects incur budget overruns. According to Standish Group, a research firm, the average IT project runs over budget by about 43 percent. Among the litany of reasons quoted (such as excessive focus on technology at the expense of business processes, communication shortfalls, project management and operational issues) estimation & bad planning rank high in the list.
Continue reading "Improving Package Implementations Estimates using Package Points" »
If there is one thing which we can call as the livewire of the High Tech Sector is Labels. The entire high tech industry moves on labels. In Standard ERP Packages there are certain limitations in terms of volume of labels, performance and quality of bar code labels. As a result, typically companies have looked at other middleware options as a plug and play with the ERP Packages. Latest offerings from the ERP vendors seem to address this problem removing the need for middleware.
Continue reading "High Tech Sector’s Label Printing Needs: Are we there?" »
