Digitising the Shop Floor: Why Manufacturers Can't Ignore ERP Systems

Digitising the shop floor gives access to real-time data and automated procedures. This approach can transform your inventory management techniques from guesswork to a strategic benefit.

This happens to almost every manufacturer at some point: an unfinished product remains idle, awaiting a missing component. It presents hidden manufacturing bottlenecks including poor data visibility, incorrect inventory levels, inconsistent quality control, and a lot more.

Shop floor digitisation is the best solution if you find yourself caught in this vicious cycle. In this reading, you will understand how digitisation and ERP systems as the foundation, empower your workforce and handle its complexity.

Why Digitising the Shop Floor? A Multi-perspective View 

1. Your Shop Floor - A complex ecosystem

Every shop floor is a complicated ecosystem. It includes interconnected elements that must work together to turn raw materials into completed goods. Let's go back to the five key elements and how they work together:

This ecosystem needs an organised balance for success. There is a domino effect from disruptions in one area to the next. A broken machine can stop production, delay delivery, and deplete stock. False data results in greater expenses, poor quality, and ineffective resource allocation. Similarly, poor communication across departments blocks your decision-making process and delays production activities.

2. How digitising the shop floor affects your operations

Here are 5 notable ways that digitising the shop floor can help keep the ecosystem in balance:

#1 Control inventory more effectively

Managing inventories is like walking a tightrope. Overstocking uses up money, while stockouts stop production. Digitising the shop floor offers you 3 shortcuts to robust inventory management:

• Precise inventory tracking: You can limit deadstock that builds up in your warehouse, optimise ordering, and prevent stockouts with real-time data on material usage and inventory levels.
• Demand forecasting: You can examine historical data and market patterns to predict future requirements and modify stock levels appropriately. By being proactive, you keep the required supplies on hand when you need them.
• Better use of space: You can also learn more about the placement and movement patterns of your inventory to plan the warehouse layout and clear up important areas efficiently.

#2 Boost productivity & efficiency

According to McKinsey & Company, manufacturers can improve overall equipment effectiveness (OEE) by 2 to 3% points with digital technologies. Think of a more efficient production flow, reduced downtime, and more units coming off the assembly line. 3 Key benefits of digitising the shop floor are:

• Real-time insights: You can make well-informed decisions about resource allocation, enhance production schedules, and quickly detect problems.
• Predictive maintenance: You can reduce downtime and interruptions by using sensor data to schedule preventive maintenance and forecast equipment errors.
• Automated operations: By automating repeated tasks like data entry and inventory control, your teams have more time to complete other important initiatives.

#3 Reduce defects & improve quality

Manual inspections are prone to error. By using data analytics and automated inspection methods, digitisation improves the quality in 3 main ways:

• Automated inspections: Integrate machine vision systems for consistent and precise automated inspections, reducing reliance on manual human checks.
• Data-driven defect analysis: You can find patterns in defect data to determine the underlying causes and put preventative measures in place.
• Accountability and traceability: You can also monitor components and materials across the production process to simplify product recalls and ensure legal compliance.

#4 Make data-driven decisions

Your factory operations should not rely on guesswork. Fortunately, real-time data on all aspects of manufacturing is at your disposal with the help of digitisation. In one central location, you can check material usage, analyse machine performance, and keep an eye on production progress:

• Real-time production dashboards: Monitor KPIs like machine performance, production progress, and inventory levels in real-time.
• Data-driven insights: You can also analyse production data to pinpoint areas of concern and make critical scheduling and resource allocation decisions.
• Enhanced cooperation and communication: Digitising the shop floor enables smooth data flow among departments and improves proactive problem-solving.

Maybe you’re interested in: SolidEdge Integration - Enabling Data Exchange & Enhanced Design Collaboration.

#5 Engage your workforce

Tasks can be automated by technology, but experienced labour remains important. With the help of intuitive features and real-time data, digitisation enables users to solve problems quickly and make wise choices. The result is that workers feel more involved in the business, get more engaged, more driven and more effective:

• Better data access: Digitising the shop floor gives your employees access to real-time data and production so they can make appropriate decisions on the shop floor.
• Improved aptitudes: You can dedicate to training initiatives to provide your employees with the know-how to efficiently operate and utilise digital products.
• Enhanced engagement: You can encourage a sense of ownership by including your teams in the digitisation process and emphasising the benefits it offers to their everyday jobs.

3. Key personnel benefit from the transformation

Empowering your workforce is just as important as utilising technology in the digitisation of the shop floor:

• Shop Floor Managers: Thanks to digitisation, they now have access to real-time production dashboards with indicators like production progress, inventory levels, and equipment performance. This helps you find bottlenecks more quickly, make better decisions on resource allocation, and provide proactive solutions on time.
• Production Supervisors: They now have instant access to work order changes, personnel performance, and production schedules by digitisation. They make sure that jobs are delegated efficiently, spot possible delays early on, and keep the team focused on maintaining a steady flow of output. It is accessible with a mobile device.
• Machine Operators: They can now get digital work instructions and interactive training modules directly on machine interfaces thanks to digitisation. By doing this, operators can minimise errors and maximise uptime with the right data at the right moment. 
• Quality Control Inspectors: They can focus on more complicated jobs and data analysis by using automated inspection technologies. One example is machine vision which provides consistent and exact quality control.
• Maintenance Technicians: Predictive maintenance is revolutionary. By digitising the shop floor, technicians can now take advantage of sensor data and real-time equipment tracking. This enables you to plan preventative maintenance, limit downtime, and predict breakdowns before they happen.
• Material Handlers: Digitisation enables optimal picking routes and real-time inventory tracking. This guarantees that handlers have the correct components on the assembly line and saves time that would otherwise be used to search for lost materials.

Read more: ERP Solutions in Manufacturing - A Path to Frictionless Production

ERP Solution - The Cornerstone of Digitising The Shop Floor

Picture yourself struggling to manage multiple tasks at once: finances, inventory levels, and production plans - all on multiple spreadsheets and paperwork. For many manufacturers, this disorganised situation is the norm in the absence of a centralised data hub.

That's why your digital lifeline is the Enterprise Resource Planning (ERP) system. The system aims to optimise data flow, get real-time insights, and help you realise the potential of shop floor digitalisation.

1. What is an ERP System and How Does it Help?

You can take the ERP system as your entire manufacturing operation's central platform. It integrates data from different areas: sales, finance, inventory, production planning, etc., via a single source of truth. This way, your business no longer encounters data discrepancies, organisational ambiguity, and poor decision-making. Businesses that automate processes at several locations, such as manufacturing facilities and suppliers, saw a 66% increase in total time that was saved from production to delivery (Aberdeen). 

By unifying your data ecosystem, the ERP becomes a strong foundation to digitise your challenging shop floor. The following are 3 most typical ways that an ERP system simplifies your operational data flow:

• Removes Data Silos: Think of a single system replacing countless paper reports and inconsistent spreadsheets. ERPs provide a complete view of your whole operation by integrating data from multiple sources.
• Real-time Visibility: You can get data without having to wait for reports or struggle around for it. With the real-time data that ERPs provide among departments, you easily identify problems and make the necessary modifications.
• Enhanced Teamwork: Departments such as production and sales can communicate more effectively when there is a centralised platform for data exchange. This encourages teamwork and guarantees that everyone follows the same goals.

Learn more: Moving to SaaS ERP - Why Legacy System Cripples Your Business.

2. ERP for Shop Floor Management: Core Features

Going beyond finance, the ERP system provides features that are developed exclusively to enhance shop floor management:

Your shop floor can be digitised on a solid basis thanks to these core features. However, keep in mind that if your operation has more specific requirements, you need more integrations beyond an ERP system.

3. Integrating the ERP for a Comprehensive Solution

Although your ERP is a solid foundation for your shop floor, certain jobs call for specific technologies. This is where integration comes into play: flexibility & seamless integration.

You should seek an ERP system that enables easy connection with specialised apps used on the shop floor. By allowing data to move smoothly between the ERP and these apps, you can create a complete ecosystem for shop floor management. Here are 4 examples of software that can improve the features of your ERP even further:

It's possible to digitise your shop floor and uncover its full potential by integrating these specialised applications with your ERP. This integrated approach boosts production efficiency, facilitates data-driven decisions, and elevates your level of productivity.

Taking Control of Your Shop Floor with a Digitalisation Strategy

Let's skip a few years ahead. Think about a shop floor packed with smart machines that are all seamlessly linked to one central hub. It is the future of manufacturing. Embracing digitising the shop floor allows you to lead the way. In the ever-changing industrial setting, you can make sure your manufacturing business stays competitive and adaptable by adopting digital tools and cultivating a data-driven culture. 

The future has arrived. Are you prepared to get started? We recommend working with a certified ERP service provider for a successful ERP journey ahead.

References:

• McKinsey & Company (2020). Digital collaboration for a connected manufacturing workforce.
• Mishra (2009). Enterprise Resource Planning Systems: Effects and Strategic Perspectives in Organizations.
• Robison & Nink (2016). The Damage Inflicted by Poor Managers.