How ERP helps electronic manufacturers to meet short production times

Electronics manufacturers are facing constant pressure to introduce innovative new products that are durable, cost effective and which fill a market gap. The pace is fast, design and production times short, and time to market constantly being reduced.

electronics

As a result electronics manufacturers need reliable systems that enable cross-communication throughout the entire supply chain. They need to be able to stay on top of short product life-cycles, long procurement lead times, indirect sales channels and complex supply chains, making reliable Enterprise Resource Planning (ERP) applications a must for supply chain management.

These are challenges that are superficially similar to many manufacturers. Food manufacturers, for example, are constantly facing short product life-cycles and limited inventory, and any lean manufacturing organisation needs to carefully optimise inventory levels. But it’s important that when electronics manufacturers go through the ERP selection process, they do select a solution that has been designed with them in mind, and which addresses the individual challenges they face. There’s no one size-fits-all solution when it comes to ERP, so what are the individual requirements that electronics manufacturers need to look out for?

The Return Merchandise Authorisation (RMA) process is a constant challenge for electronics manufacturers, as a condition of service agreements. A key gate keeping process in the reverse logistics cycle, manufacturers need to be able to quickly diagnose and correct a customer’s problem with a product quickly, as all returns are costly for the vendor and inconvenient for the customer. The visibility of information afforded to electronics firms from ERP are vital for keeping track of returned goods and ensuring that returns do not become lost on the factory floor, costing the manufacturer and the vendor money.

In fact, the vendor is very much in control throughout the electronics supply chain and vendor-managed inventory (VMI) is not uncommon. With the vendor dictating to the manufacturer which stock to hold according to market demand, any technology which supports and fosters the vendor-manufacturer relationship is important. An ERP system which can manage and analyse Electronic Data Interchange (EDI) formats is a necessity that many electronics manufacturers cannot do without.

DataSwitch

At K3 Syspro we have our own tool: DataSwitch; a powerful data manipulation and systems integration tool which works with SYSPRO to streamline complex sales processes for electronics manufacturers. It provides a user friendly interface that simplifies data import and export tasks and the automation of manual transactions. It means that a vendor can raise an order and create a sales order in the production department. When that order is invoiced, stock is transferred to a warehouse and receipted into stock via an invoice reference, enabling manufacturers to better manage and respond to EDI formats.

As a cost effective and relatively simple method of stock and inventory management in electronics manufacturing, Bill of Material (BOM) backflushing is also a common and extensive process in this industry. The principle of backflushing is that whenever one part is made, the stock of the components on the part’s bill of material can be reduced by the quantity on the bill of material. The right-fit ERP solution will offer backflush functionality to support this process and enable manufacturers to clearly define what type of raw materials are required to be backflushed, and what may not at every BOM line. This means that the entire process becomes automated and can significantly improve stock position and cost booking for light electronics manufacturers.

Related Links
Take a look at other Electronic companies’ experience in our case study section
Learn about our DataSwitch product

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