If you run a discrete manufacturing business, you understand the challenges inherent in combining materials A and B to produce your marketable widget. While your products may be unique, your headaches are universal. It can be difficult to track every aspect of the process, but not doing so could be treacherous.
Properly managing the many facets of discrete manufacturing is necessary to operate your organization efficiently, minimize waste, increase margin, and much more.
Let’s unpack this.
What is Discrete Manufacturing?
At its most basic level, manufacturing is classified by two types; process manufacturing and discrete manufacturing.
Process manufacturing differs greatly from discrete manufacturing in that the resulting products are undifferentiated. These indistinct products derive from recipes or formulas and include food, pharmaceuticals, and chemicals, for example.
If you were to divide one of these product units in half, you would have two [smaller] units of the same product. If this product were a cake, for example, dividing it in half would still result in two units of cake.
By contrast, discrete manufacturing is more of an assembly process, strategically pulling together multiple components to create a single product or unit. These items can be basic or quite complex to produce, with numerous parts of varying materials.
You could not divide one of these products in half, as in the process manufacturing example above, as it would no longer function as the originally created item. If this product was a smart phone, for example, dividing a smartphone in half would not result in two smartphones.
Unlike the continuous process manufacturing effort of, say, salt, the discrete manufacturing process of a stereo receiver, for example, can be stopped and started as needed. Production can also be staggered and scheduled as parts and labor become available at different times.
How do you keep an eye on so many moving parts?
Enterprise Resource Planning
Spoiler alert: The tools designed to handle the challenges of discrete manufacturing come by way of a high-quality enterprise resource planning (ERP) platform.
But, what does that really mean for your business?
Identifying the type of solution is just the beginning. We now need to better understand how this helps in order to discover why we need it.
As the name would suggest, enterprise resource planning involves looking at your enterprise as a whole, connecting multiple departments and resources together, and considering the discrete manufacturing process from conception to final delivery. Between these two phases are many steps that need to be accounted for and properly planned.
Applying ERP To Your Discrete Manufacturing Workflow
We’ll keep this simple and high-level, but to better understand how this works, let’s imagine we are producing a wrist fitness tracker. This consumer electronics product is popular with the fitness-minded, like runners, and performs numerous functions for the end user like monitoring heart rate, GPS location, and calories burned.
To begin, our company’s design team will start drafting the plans for our new fitness tracker line. These plans and subsequent specifications will be housed within the ERP so teams relying on this information can review on-demand. With the design house in New York City and warehouses in St. Louis and Phoenix, leveraging a cloud-based ERP solution allows your teams to be geographically dispersed yet intimately connected.
Next, our engineering folks will make the selected designs a reality by determining which materials are best suited for the intended use of the fitness tracker as well as the manufacturing process. They will factor in such considerations as size, weight, and durability.
With the selections made by the engineers visible within the ERP, the purchasing department will begin sourcing the materials needed to produce the fitness tracker. They will track which vendors they’re receiving the materials from, the costs associated with each component, and note the timing of their arrival.
Our production team can now commence scheduling the factory and warehouse staff based on the materials ETA shared by the purchasing department. Our organization can now increase staff based on the anticipated workload and schedule, ensuring we have the labor resources necessary when, and only when, we need them—so as to not waste time and money.
The warehouse team has now received the ordered materials and is entering the updated sums and SKUs into our company-wide ERP inventory system. The accounting department has begun to reconcile the purchase orders from earlier in the process against the newly updated inventory levels and starts to issue payment to each vendor.
Now that our materials have arrived, we can begin assembly!
Our assortment of skilled assemblers gather the components for the fitness tracker. As they pull sapphire crystals, circular LCD screens, mini lithium batteries, and more from inventory, they scan each barcode from the warehouse shelves, thus updating the ERP inventory counts in real-time. Component serial numbers are also noted and associated with each resulting product and lot.
As our fitness trackers make their way down the assembly line, the final components, like rubber watch straps and instruction manuals, head to the packaging squad for boxing and shrink wrap.
When each skid fills-up, our shippers print labels for each wholesale order, apply barcodes to each lot, scan, and load the trucks. As the trucks drive out of the warehouse parking lot, the shipper’s scanning actions trigger our ERP to send tracking information to each wholesale recipient along with the appropriate invoice.
Customer Relationships Expand Discrete Manufacturing
To add to this process, we could employ an ERP solution that works hand-in-hand with our customer relationship management (CRM) system. This would allow us to connect our pre-development teams, such as the marketing department, so they can explore potential audiences for our fitness tracker and help define who our end customers are and which features they might find most valuable. Post-deployment, the marketing gurus can begin to pull the key specs of our fitness trackers, product photography, and mobile app download links from the ERP to create a social media brand awareness blitz.
Our sales teams can depend on the CRM to better understand our wholesale/retailer customers that sell our fitness trackers in their stores and on their e-commerce websites. They can see which retailers in which markets sell more than others or whether they seem to favor one model over another based on their ordering history.
While we’re only scratching the surface in this example, it’s clear to see there’s a lot involved when it comes to discrete manufacturing. Any step unaccounted for can quickly translate into lost productivity and increased waste (read: cost), to say the least. By employing the right ERP, one tailored to your industry, you now have the opportunity to save money, increase efficiency, obtain a 360-degree of your business performance, and have a solid foundation to scale up from as your enterprise grows.
To learn more about how ERP can help with your discrete manufacturing business, Contact Us today.