Select Page
The Devil is in the Details

The Devil is in the Details

Manufacturing excellence is achieved by paying attention to the smallest detail.

When I was working in the shop we had an owner with a manufacturing management strategy that was obsessed with understanding and tracking each detail of the manufacturing process as well as making sure his employees were equally passionate about providing the detail needed for manufacturing excellence.
the devil is in the details estesgroup manufacturing blogThis started with the part quoting process that our shop received from our customers and prospects.  He insisted that his engineers/estimators provide all the detail related to what they would estimate it would take to manufacturer the part (i.e. each operation set-up/run time; w/work center, special comments, subassemblies with every nut/bolt/raw material, any outside processes; including the intended vendor that they were going to use for the OSV process, etc., etc.).  Of course the push back from the engineers/estimators on this manufacturing management strategy was this would take too much time; based on the number of quotes they were asked to get out as well as the percentage of quotes they received actual orders for. The owners response was always the same, do the detailed work now when you’re quoting the part, so when we get the order (which might be in 2 to 6 months after the quote was completed) no one would have to guess what their thought process was to arrive at the price they gave the customer/prospect.  The added bonus of breaking down the manufacturing process in detail during the quote process was you could then take an “Order Entry” person (using the Epicor Vantage, 9 or 10 system for ERP manufacturing solutions) have them create the order, link it to the quote and pull the manufacturing detail from the quote into the job so production could review it, change it if necessary, schedule it and create the shop paperwork. This was a highly efficient ERP manufacturing solution process to get work out to the shop in a timely manner.

With all the detail instructions now in the shop (via a Shop Traveler) for the production worker to understand specifically what they needed to manufacture (Vs having to review/interpret a part blue-print), they knew:

  1. The Date on when they need to start the part/job to get it out on time to meet the customer’s requested delivery date(s).
  2. What Material(s) (raw, finished, etc.) they need to pull from stock to make the part.
  3. What Operations they need to report their time against to make the part; as well as the machine/work area with estimated set-up/run times for each operation.
  4. The specific Quantity they had to make.

Any Outside Subcontract work necessary and where in the manufacturing process it needed to done.

Mistakes in manufacturing, as most business, is due to a lack of communication on the details of what’s needed to be done to deliver the product and or service.  In manufacturing the true value of providing the detail from the start of the quoting process through the reporting of actual time, materials, costs against the manufacturing process of the part is that it provides management the ultimate reason for why they purchased the Epicor 9 or 10 ERP system.  That is knowing what parts, type of work and customers they’re most profitable working on.  As soon as you know that information as a manufacturer you can guide your business to getting more of that work as well as get rid of the unprofitable customers/no margin work.

The manufacturing shop I worked at knew this information from their analysis of the Completed Job Report and Part History Report (which are standard reports in ERP manufacturing solutions provided in the Epicor Vantage, 9 and 10 systems). They used this information to implement a successful manufacturing management strategy and grow their business 10 fold in 5 years.

If your company would like to better understand the importance of the information (or lack of accurate information) on the Completed Job Report and/or Part History Report, let EstesGroup’s ERP manufacturing solutions share with you our experience in manufacturing management strategy and how to interpret this information to ensure the future success of your business in good/bad times.

Hint, the “Devil is in the Detail”.

Simplify Technology, Improve Operations, and Gain Efficiencies with Epicor ERP for Manufacturing.

Download our “Get Ready For Your Epicor 10 Upgrade” Worksheet.

Indirect Labor And The Clean Up Kid

Indirect Labor And The Clean Up Kid

The Importance of Tracking Indirect Labor Costs in Manufacturing

In the fast-paced world of manufacturing, understanding and tracking indirect labor costs can significantly impact your bottom line. Let’s delve into why it’s crucial and how it can benefit your organization.

Definition of Indirect Labor

Indirect labor refers to any labor that supports the production process but isn’t directly involved in converting materials into finished products.

Ramifications of Not Tracking Indirect Labor

  • Inaccurate Labor Reporting: Without accurate tracking, labor reporting to the manufacturing process becomes unreliable.

  • Inaccurate Part Costing: This leads to inaccuracies in part costing, with actual setup and production times overstated.

  • Disrupted Part Scheduling and Shop Loading: Inaccurate tracking affects part scheduling and shop loading, leading to inefficiencies.

  • Inability to Reduce Indirect Labor: Without proper tracking, it’s challenging to identify areas for improvement and reduce indirect labor costs.

  • Understated Shop “Burden Rates”: Failure to track indirect labor results in understated shop burden rates, impacting overall cost calculations.

A Real-Life Example: The Impact of Tracking Indirect Labor

Let’s explore a real-life example of a manufacturing shop in Minnesota that experienced significant improvements after implementing a system to track indirect labor.

Case Study: Transforming Shop Operations

This shop, prior to implementing a computerized Shop Control (ERP) system, faced challenges in understanding the true cost of indirect labor. Employees would routinely shut down machines and engage in cleanup activities, but the management lacked visibility into the actual time and cost associated with these tasks.

Implementation and Results

After implementing the Shop Control system and encouraging employees to report their labor efforts accurately, management gained insights into the inefficiencies of having highly skilled production workers engage in cleanup activities. By analyzing the indirect labor reports provided by the system, management realized the significant waste of time and money involved in this practice.

Optimization and Savings

With this newfound understanding, the company optimized its operations by reallocating cleanup tasks to a dedicated employee, freeing up skilled production workers to focus on core tasks until the end of their shifts. This simple change resulted in substantial cost savings, increased productivity, and improved adherence to delivery schedules.

Partnering with EstesGroup for Manufacturing Efficiency

At EstesGroup, we specialize in optimizing and streamlining manufacturing operations to maximize efficiency and cost savings. By leveraging tools available in Epicor to produce detailed indirect labor reports, we help businesses identify areas for improvement and implement actionable strategies for success.

Our Approach

  • Comprehensive Analysis: We conduct a thorough analysis of your indirect labor reporting to identify inefficiencies and opportunities for improvement.

  • Tailored Solutions: Based on our findings, we develop customized solutions to streamline operations and reduce overhead costs.

  • Implementation Support: Our team provides hands-on support to implement new processes and technologies, ensuring smooth transitions and tangible results.

Let Us Help You Unlock Efficiency and Savings

If you’re ready to optimize your manufacturing operation and unlock potential cost savings, partner with EstesGroup. Contact us today to learn how we can leverage technology and strategic insights to drive efficiency and improve your bottom line.