20 years ago in Ontario when I started by career in ERP my very first job was to enter labour tickets into the ERP system. This was a tedious and monotonous task, fraught with errors and mistakes, illegible letters, wrong jobs, wrong dates/times, missing timesheets and dirty (grease/oil). To enter in 100 employee’s time who would report on 8-10 job tasks per day took me the better part of the morning, and I’m a fast typist. Sometimes I would make mistakes or the operators but it wasn’t easy to get reports or information out of the system to check and or confirm and so these ‘ticket time bombs’ would lay in wait until the end of the month, at which point there would be the evitable forensic ‘CSI’ accounting exercise to find these lost souls.
I had once questioned the purpose of this daily grind and the general manager at the time told me rather astutely that ‘Times have changed; we have an ERP system and no longer is it the job of the operator to produce a good quality part, he also needs to produce good quality information. With this information we can better determine the efficiency of the employees and the factory, understand which jobs are making money versus losing and determine whether we should be bidding on jobs or not bothering. It will give us the information to determine the future course of the company’
Now fast forward 20 years to 2016. The current theme from Donald Trump’s campaign was to ‘retain and return manufacturing jobs’ and on the surface, and if you lived in the rust belt, this makes a lot of sense because many jobs have disappeared in manufacturing. After 2 recessions many of the manufacturing companies in Ontario have leaned out unnecessary staff and processes. They are purchasing material and products overseas and physical labour to Mexico and China.
But…..
This article by Barrie McKenna in the Globe and Mail does an excellent job of describing that although jobs have been reduced, the actual amount of manufacturing input has increased.
Read the article here at the Globe and Mail
This means that Manufacturing hasn’t disappeared; it’s just smarter. If you look up the definition of advanced manufacturing it describes the use of technology to improve products and or process.
If you go back to the company where I was entering labour tickets, the company changed dramatically over the years.
1) 18 years ago they implemented barcoding. The barcoding allowed real-time reporting, time and attendance. This automated the entry process of the time tickets into the business system.
2) 15 years ago, they purchased advanced equipment. In this case the machine was called an angle master and it automatically was able to cut, layout the hole patterns and punch accurately. Effectively replacing the layout department and punch presses.
3) 13 years ago, they integrated the 2D Cad drawings directly to the machine so that no programming was required, thus eliminating the need for CNC programmers.
4) 10 years ago, they purchased steel optimization software so that the machine was able to maximize the 40’ lengths, reducing the scrap and handling of material
5) 5 years ago, they integrated the machine directly into the time sheet system so they operators, scanned on to the machine and no longer had to barcode time.
Through continuous improvement and investment in technology that integrated to their ERP system they were able to reduce direct manpower, reduce the number of machines that were required, eliminate programmers, maximize lengths and eliminate direct time reporting.
Their overall lead-time to manufacturer product went from 6 weeks to several days and ‘Yes’ they now employ fewer factory staff than they did 20 years ago.
The reality is that new technologies will eliminate manpower, but the theory is that using the same staff it will allow your company to grow and solutions like Dynamics NAV will provide the full solution and integration when you are ready.
