Don’t forget these few facts…Part 1
Accurate factory floor production reporting is becoming more and more important for many manufacturing companies for a variety of reasons. Reasons that range from process improvement projects to more effective and accurate costing. But there are several things to know before taking on the task of implementing a new production tracking system on your factory floor.
First, let’s make sure we are all on the same page when referring to a factory floor production system. A floor system can refer to anyone of the following:
- paperless factory
- manufacturing WIP tracking
- shop floor tracking software
- WIP in process tracking software
- production trim tracking software
- manufacturing process tracking software
- manufacturing downtime tracking software
- manufacturing production tracking software
- and more…
First, ask yourself, does our new Factory Floor Production reporting system need to be “real-time?” The answer from some ERP vendor is, not necessarily, if all you want is accounting oriented information. A common ERP vendor recommendation is to “backflush” labor and materials at standard when the job is finished. Easy to do, but it will not help you and your management, if the real problems are more accurate materials management, improved labor efficiencies, better asset utilization (effectiveness) and/or improved quality. It is important if you want to react quickly to problem situations of too much scrap, poor efficiencies, low OEE, OEE Myths & Mistakes and “error proofing” the floor reporting. A good factory floor system, like an MES, MES Myths & Mistakes , should provide not just real-time visibility on the machines, but also provide the real-time highly accurate job costing and labor time tracking information.
Second, real-time reporting provides a true picture of your shop floor status. Without it, you can’t provide specific ship dates or updates to customers with confidence. And if customers don’t feel comfortable with your ability to provide the information they need to effectively run their own businesses, they will send their next orders to your competition.
Third, real time labor reporting and accurate job time capture is a cornerstone of accurate job costs. In today’s competitive market, shop floor systems that help maximize throughput should also be good at capturing precise part/SKU and job/batch costs. You must have accurate cost information to predict and protect your margins and obtain and retain customers. And while thinking about labor job time tracking, consider the added functionality of time & attendance, sometimes referred to as, labor management. We will cover this topic in Part 2.
While it’s feasible to have your ERP vendor offer their “shop floor” data collection systems, it is often far better to use a specialized intuitive easy-to-use, all-in-one system that can run in its own local server or in the Cloud 24 x 7 (with or without machine monitoring integration) along with job time labor reporting that has been designed from the ground up to work in real-time such as a MES.