Success Stories: Using ERP Software to Improve Manufacturing Workflows

by:
on February 25, 2019

In a rapidly evolving manufacturing industry, one thing remains constant: It’s all about the workflow.

Manufacturers depend on a reliable and efficient workflow process to maintain productivity levels, meet the needs of their clients and grow the business. But one minor inefficiency can disrupt everything from supply chain management to customer relations—and the financial consequences are almost always significant.

The good news? ERP software can help with that.

This article will explain why workflows are critical to the success of any manufacturer, and give you the information you need to keep your business humming like a well-oiled machine.

Don’t take our word for it, though—take Austin Mathis’. He’s the IT director at Kansas City-based Empire Candle Co., and his success story is living proof that ERP software can work wonders for your workflow.

austin mathis at the empire candle factory

Austin Mathis of Empire Candle Co. (Images provided by Sage Group)

How Workflow Inefficiencies Disrupt Manufacturing Processes

Because each stage of the workflow process is dependent on the one preceding it, a single isolated hiccup can throw the whole thing off.

For example, Empire Candle faced a specific set of challenges that had far-reaching consequences:

  1. Inaccurate inventory counting led to errors in the purchasing and supply chain functions.
  2. Overextended production issues caused excessive detention penalties and chargebacks.
  3. A lack of forecasting capabilities resulted in overbuying and excess product.

Success or failure is determined by the planning and execution of your ERP initiatives; when properly managed, the outcomes of ERP adoption can be transformational for manufacturers.

The Challenges Austin Mathis and Empire Candle Faced

Lacking the resources and budgets of enterprise organizations, small businesses can’t afford big mistakes, especially in essential workflow processes like supply chain management.

Mathis experienced this firsthand—and he was determined to fix it.

“Even as a small business, it’s incredible how much you can miss in terms of inventory and supplies. These small misses add up,” Mathis said. “In our case, these misses were severely affecting our profits.”

So Mathis and Empire Candle partnered with consulting firm NexTec to tailor Sage Business Cloud’s Enterprise Management ERP software to the needs of their business.

Through ERP’s inventory mapping, workforce optimization and forecasting components, Empire lowered production costs by 30 percent and significantly reduced warehouse overflow, ultimately saving the business hundreds of thousands of dollars.

Streamline Your Supply Chain for More Balanced Inventory Management

 The problem:  Inaccurate inventory counting leads to errors in the purchasing and supply chain functions.

 The solution:  If production is the pulse of your manufacturing business, inventory management is the heart rate monitor.

ERP software does more than provide thorough inventory analysis—it can also be used to more effectively optimize your supply chain and anticipate consumer demand.

It does this by giving manufacturers:

  • Increased visibility into each supply chain component, making it easier to monitor supplier performance, warehouse status and distribution data.
  • Better coordination between supply chain processes, decreasing the likelihood of delays and cultivating healthier client relationships.
  • Heightened awareness of business functions and more confident decision-making with detailed analytics dashboards and big-picture insights.

 The results:  Prior to implementing ERP software, Empire Candle had little understanding of its inventory status—to the point where it affected the company’s bottom line.

“We were frequently ordering too much, mismanaging supplies and having a hard time filling placed orders,” Mathis said. “These inventory variances became detrimental to our profitability.”

Through their ERP software’s inventory mapping feature, Mathis and other business leaders gained deeper insight into when new supplies were ordered, received and moved through the supply chain.

“The software created a positive ripple across our company’s operations,” he said. “Today, we order less, create less waste, need less space and fill orders more efficiently.”

austin mathis views erp data

Austin Mathis analyzes ERP data (Images provided by Sage Group)

 Our recommendation:  If your company is struggling with inventory tracking, an ERP could be the answer to your problems. In your search, be sure to identify an ERP system with in-depth supply chain management and inventory tracking functionality.

Optimize Staffing for More Efficient Workforce Management

 The problem:  An overextended production process causes excessive detention penalties and chargebacks.

 The solution:  As a stand-alone initiative, human resources (HR) software helps businesses administer common HR-related operations—things like employee training, payroll processing and human capital management (HCM).

But ERP software’s HR components broaden the scope of HR administration, giving manufacturers further insight into how these functions affect other processes across the business.

By utilizing insights such as revenue, real-time productivity levels and predictive analytics, manufacturers can use their ERP to make informed decisions about when, where and how to reallocate resources—and do it with optimal efficiency.

 The results:  Prior to implementing its ERP, Empire Candle faced a frequent problem for small businesses: How can we optimize our limited workforce without overextending resources or diminishing productivity levels?

“We’d run two, sometimes even three shifts during our peak production season, utilizing a heavy temporary staffing population during those fluctuations,” Mathis said. “By managing staffing through ERP, we have lowered labor costs with a more stable full-time workforce and now operate more balanced staffing across scheduled shifts.”

Furthermore, ERP analytics helped Mathis and others identify workflow improvements through bills of material, work order material picking and staging efficiencies.

“ERP has helped us plan more intelligently,” he said, “enabling us to now produce less waste, need less space and have an overall more efficient production cycle.”

According to Mathis, Empire Candle orders are now processed and ready for delivery well ahead of time.

austin mathis empire candle

Austin Mathis outside Empire Candle in Kansas City (Images provided by Sage Group)

 Our recommendation:  If your company currently uses human resources management (HRM) or HCM software—or if these components are part of your existing ERP—take stock of its ability to identify gaps or inefficiencies in the production process. Labor costs and shortages could be to blame, in which case it might be time to consider a new ERP, which streamlines these processes and makes it easier to pinpoint the root cause of such problems.

Forecast With ERP Data to Plan More Accurately

 The problem:  A lack of forecasting capabilities results in overbuying and excess product.

 The solution:  Whether you’re predicting the weather, sporting events or consumer demand, forecasting is hard. But ERP software gives manufacturers the data they need to anticipate demand with precision and manage inventory with confidence.

With a wealth of CRM and supply chain metrics to pull from, ERP forecasting weighs countless data points to predict any fluctuations in demand.

Specifically, manufacturers can forecast based on:

  • Geography: Break down future demand based on region, state or individual market, allowing for more thorough distribution planning.
  • Seasonality: Know which times of year are typically busiest or slowest and adjust procurement methods accordingly.
  • Customers: Analyze historical sales data for individual clients, so you can foresee any significant variance in order placement.
  • Products: Track demand for individual goods so you can plan materials acquisition and avoid any surpluses or shortages.

But it doesn’t end there; ERP forecasting also weigh factors such as materials availability, lead times, cost fluctuations, income levels and much more. Next to having Nostradamus on staff, it’s as close to predicting the future as you can get.

 The results:  Struggling with their forecasting assessments and dissatisfied with their results, the folks at Empire Candle knew they had to make a change. So they sought the aid of Sage Enterprise Management partner NexTec, to streamline their data and gather the insight necessary to accurately predict demand.

The results were fruitful, paving the way for a more efficient supply chain and improved inventory management. Empire was even able to eliminate an entire overflow warehouse, resulting in $400,000 in annual savings.

“The implementation of ERP has given us the intelligence to gain deep business insight and make strategic, informed decisions regarding our SKU count, the ability to improve real-time performance feedback to functional teams, and to provide sales and marketing teams with self-serve data and analytics,” Mathis said.

empire candle staff

Empire Candle staff members assemble their product (Images provided by Sage Group)

 Our recommendation:  ERP systems store lots and lots of data, which makes it difficult to know what to track. So before you overhaul your forecasting strategy, identify the key performance metrics that can serve as a foundation for future reporting. We’ve put together an infographic that helps manufacturers do exactly that.

Tools to Help You Be a Success Story, Too

For manufacturers considering an ERP, the Empire Candle Co. story is a solid blueprint for how to make it work for your organization. But it’s not the be-all and end-all; your business is one of a kind, with unique challenges and opportunities to improve.

That said, if your problems are similar to Empire Candle’s, this graphic can serve as the foundation for success:

a manufacturing workflow for erp software success

Looking for more? There’s a bottomless supply of resources to help you on your efficiency-enhancement journey. Here are a few that can help you get the ball rolling:


Note: The information contained in this article has been obtained from sources believed to be reliable. The applications selected are examples to show a feature in context, and are not intended as endorsements or recommendations.

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