The dynamic nature of the contract manufacturing business has the potential to create chaos on the production floor. When customer forecasts and order volumes shift daily, managers are challenged with juggling production schedules and controlling inventory.
Though they may share industry focuses with other pharmaceutical, food, or chemical manufacturers, to name a few, running a contract manufacturing business is very different. They aren’t worried about the production of one company’s product line, they are managing the production of several different customers’ product lines at one time.
ERP software for contract manufacturers has played a significant role in helping to create organization and tighter controls over operations – especially when changes arise.
Here are 3 tools that will help you prepare for and manage through the most common challenges of a contract manufacturer.
- Production Capacity Report – Best leveraged within a cohesive ERP environment, this report provides a great overview of where there is production availability or if there is a need to invest in new production lines. The details outlined in this report are generated by data from product routings, customer forecasts, and production lines. It can also help determine target areas for sales efforts based on production capacities.
- Material Requirements Planning (MRP) – Many contract manufacturers understand the power of an MRP but many tools lack providing information beyond what to order and when. Managing multiple accounts with varying requirements, production managers need more insight into what needs to be changed when customers make an order adjustment. MRP also detail which purchase then needs to be cancelled or have their due-to-dock date updated.
- Master Production Schedule – A flexible Master Production Schedule is key to creating production efficiency. Optimize the schedule based on change over requirements, raw material inventory availability, and expected delivery dates to create the best production game plan. The tool should then enable schedules to be re-optimized or rearranged easily as customer needs change.
“Contract manufacturers face unique ERP challenges,” said Scott Deakins, COO of Deacom. “Those that are able to stay nimble, will retain customers while maintaining margins and reducing inventory holding costs.”