According to statistics, in recent years, whether it is an internationally well-known ERP manufacturer or a local ERP manufacturer, the implementation of its general-purpose ERP software in the furniture industry has mostly encountered dismal results. Last Friday, a hot and sunny day. Our company held a grand summary meeting of ERP implementation in the conference hall. The general manager of the company announced with a serious expression that the ERP project officially declared that the implementation failed. Recall that a few months ago, it was also in this conference hall. The company's senior executives, department heads and project teams participated in the project's launching ceremony. At that time, the general manager and project manager all took the initiative to swear their determination and confidence to implement ERP, but they did not expect it to end in a few months. The big difference between before and after makes people wonder.
In the past year, the company replaced three ERP implementation managers in one go, but the results have been poor, and only some basic modules can be used. Important ones such as production modules, procurement modules, and BOM modules have been unable to use normally. Analysis of the reasons for the failure of our ERP implementation is mainly because the operation of furniture enterprises is different from the characteristics of ordinary enterprises, which makes the lack of ERP software for the characteristics of the furniture industry repeatedly frustrated. In short, our ERP implementation is a case of a failed furniture industry. Here I would like to share with you that I hope that "the past will not be forgotten, the teacher of the future".
The first blocker: the particularity of the furniture industry BOM
The reduction of production costs is the goal that any furniture company pursues uninterruptedly, but to reduce production costs, the first task is to be able to clearly calculate the actual production cost of the product, and then to analyze the cost structure and find out the needs Improvements. Therefore, an accurate BOM is the basis of all cost analysis. Even if we understand this truth, we are still frustrated by the devil's claws in the furniture industry's special BOM.
BOM (Billof Materials) is not only the basis of the ERP system, but also an important basis for the production department to organize production, picking, and procurement departments to formulate procurement plans and finance departments to calculate costs. Without an accurate and unified BOM, the same product cannot be manufactured, which directly affects the processing performance and use effect of the system. However, a characteristic of the furniture industry is that there are many materials, different specifications, different materials, different colors, etc., and most products are customized by customers. The customized product BOM is basically disposable. Raw materials can be classified as: plate, wood, leather, paint, cloth, hardware, glue, consumables, tools and knives, packaging materials, etc. Among them, the main materials such as plate, wood, leather, etc., must also consider their specifications, grades, batches and other attributes in the production process, otherwise the utilization rate is difficult to increase and the cost cannot be controlled. However, if one really encodes one by one according to its different specifications, grades, batches and other attributes, not only will the encoding become endless and uncontrollable, but also the BOM will be decoupled from procurement, picking and other links. This made our company understand a lesson in this ERP implementation. This is a structural contradiction between the actual use of a factory and ERP software.
First of all, the structure of furniture products is complex, there are many types, and the product replacement cycle is also short, which brings greater difficulties to the collection of data. If you follow the usual operation method, it takes a lot of manpower and time to collect and sort out basic data. Often, the product is shipped before the BOM data is built. Secondly, the characteristics of materials used in the furniture industry are quite different, and the rate of use of materials in different batches is different. For example, the solid wood material is restricted by the growth of trees in different years, and the loss of solid wood in different years in manufacturing is different. These factors have brought many problems to the material number, unit conversion, usage analysis, material procurement and inventory control. In addition, the furniture industry has a more troublesome place, because there are too many measurement units, and there are often statistical difficulties in conversion. For example, the purchase of wood is square meters, the picking is the root, and the production surplus material unit is even stranger.
Moreover, before the company used the ERP software, in the actual production process, the material name, product parts, material consumption, etc. were relatively arbitrary. This brought us unimaginable troubles and confusion during the implementation of ERP. It was also the first roadblock that our company encountered when implementing ERP. Therefore, making the BOM table accurate, complete and applicable in the implementation of ERP is one of the keys to the successful implementation of the system.
The second blocker: the particularity of furniture production management
Furniture companies are discrete manufacturing, but in terms of management process, there is a difference between solid wood furniture and panel furniture, as well as upholstered furniture and metal furniture. Even for furniture companies of the same type, their production management methods are also very different. Many furniture companies have chaotic management, and the reasons for production management account for about 90%. If they do not straighten out production management, but go to courses such as execution and team and engage in performance appraisal, it is tantamount to begging for fish.
(1) Health management and PMC material management
In theory, the introduction of the main production plan of the production management module should enable the PMC (production material control) department to independently complete the establishment of the manufacturing order, but due to the inaccurate material budget, the procurement of materials cannot be in place in time. PMC often fails to establish a system order in time, and it is difficult for production departments to produce according to PMC's schedule. In order to adapt to the implementation of the ERP system, we introduced the method of combining production orders and raw material application forms. PMC will arrange production plans in the ERP system, make material budgets and purchases in advance, and carry out plan tracking and material follow-up. All material demand plans are generated by PMC. When calculating material demand plans, full consideration is given to standard quantities, wastage, inventory, purchased quantities, and even procurement cycles for PMC and procurement to track material progress at any time. And dismantle the small warehouse on the production site, so that the stock of materials is minimized under the condition of ensuring production, so as to reduce the production of dead materials, delayed materials and waste materials. All the on-site production is produced according to the manufacturing order, and the material picking and component picking can only be carried out after the order is issued. That is to say, the workshop production department can only complete production tasks on time and in accordance with the production plan arranged by PMC, and can not apply to the warehouse at will because of the lack of material in the workshop. If it exceeds the planned amount, the material must be collected from the unplanned material.
This is the process we have summed up after several inaccurate PMC materials, and then combined with the recommendations of the manufacturer ’s senior implementation consultant. According to the manufacturer ’s senior implementation consultant, this is the most reasonable process. But this seemingly practical process has become a decoration in our company, and it is also the main reason that forced the two project managers to leave. The reason is that the furniture industry has an important feature, that is, the wood used for manufacturing is diverse, and each wood will cause different wear rates in different years. Therefore, when implementing ERP, we often find that the company's material control is basically out of control, and out of control material control is a statistic that greatly affects cost accounting.
(2) Production schedule and production plan
In terms of production management, the furniture production process is divided into preparation, thin skin, assembly, paint, packaging and other links, and the focus of management and control varies from stage to stage. For example, in order to improve the utilization rate of materials in the preparation stage, it is necessary to increase the production batch as much as possible; in order to unify the coating effect and color in the paint and baking stage, the same series of products need to be arranged for centralized production.
Therefore, for the furniture industry, the most troublesome and helpless problem is the real-time and reference of the production schedule. The reason is that there are many uncertain factors in the furniture production environment, such as capacity constraints, uncertain order insertion, change in order delivery time, and selection of pre- and post-production scheduling, which will cause difficulties in calculation of production schedules. These management features are just weaknesses that general ERP software cannot take into account.
When the order quantity is not large, the typical decomposition task production method in the ERP system can barely cope with it. For example, the sales department transfers the received order to the production department, and then the production administrator decomposes according to the order quantity and product model to formulate Production plan, and send the work order to the final execution department production workshop. However, when the number of product orders has increased sharply or a large number of orders have been received, it is not possible to reasonably and scientifically dispatch work by relying solely on the ERP system to automatically arrange production dispatch orders, even if this time relies on the health management personnel to use manual rules of thumb Temporary dispatch of work often leads the production management personnel to adjust the production schedule exhaustively. If the production management personnel's misjudgment will lead to disordered work assignments, the production site will not be able to effectively carry out production, resulting in delays in production planning and the failure of enterprises Supply.
Finally, when the furniture industry considers cost considerations, the variable factors of production are larger and more random, and it is impossible to operate in a step-by-step manner. A product is produced on this production line today, and tomorrow it may be transferred to another production line, or it may be entrusted to other manufacturers to produce, which increases the difficulty of production planning and arrangement. Therefore, wanting to deal with uncertain order production with limited production capacity is the second roadblock that our company encountered in this ERP implementation, and it is also the main cause of our ERP implementation failure.
(3) Remaining material management
In the production process, the furniture industry also has a very special management: residual material management. Therefore, our company hopes to solve this stubborn illness with the help of ERP software. As a result, the application of ERP software not only did not solve the problem of residual material management, but also caused various departments to complain and shirk responsibility. When he saw the accumulation of surplus material in the workshop, the general manager shook his head continuously and sighed, which was also a culprit that caused the project's heavy resistance and collapse.
After analysis, we found that the reasons for the remaining materials are roughly as follows: First, the impact of the amount of materials used: the materials, specifications, and quantities generally received are proposed by the materials department (later changed to the PMC department), but they are only The picture is convenient for yourself. There is little or no consideration on how to choose the appropriate material according to the on-site production situation to improve the utilization rate of the material. In addition, there is no accurate and detailed material usage quota when calculating the material usage. 'S willingness to open a pick list, resulting in a large amount of surplus material. Secondly, the efficiency of panel optimization is not high: the reason is that the batch is small but there are many products produced online at the same time, so that the panel operator must consider both on-site rapid production and material utilization in a short time, which is a very Difficult things. Therefore, the operator often can only draw the board picture based on experience. It is impossible to optimize the board and reduce the remaining material at the same time, let alone improve the material utilization rate. Finally, there is no set of residual material management mechanism. After the residual material is produced, there is no effective management. It is randomly piled up in the workshop or warehouse. The better materials are used as ordinary materials, and they are treated as waste materials for a long time. Get the best deal. Through the painful lessons of management of residual materials, we understand that ERP is just a tool, and its calculation arrangements are theoretically optimized arrangements, which require strong execution capabilities. Therefore, it is the right way to improve the basic management level.
The third blocker: the particularity of the quantity of materials purchased
In furniture products, the cost of materials generally accounts for more than 60%. Therefore, if a furniture company wants to control the production cost of a product, it must first control the purchase quantity management of materials, because the purchase quantity management directly involves the outflow of corporate funds. Generally speaking, if there is a lack of scientific analysis and quantification in the procurement of raw materials, relying on traditional experience can usually avoid two problems: over-purchasing of raw materials causes a backlog of materials and waste of funds; . If the customer changes the quantity and style of the order halfway, it is even more unclear. Therefore, the focus of procurement management is procurement quantity management. The ideal procurement management is preferably the JIT (Just In Time) method, which requires that the quantity is just right, no more and no less; the time is neither early nor late. When it comes to JIT, some people may jump out and say that furniture factories cannot achieve zero inventory, but this is undoubtedly a goal of implementing ERP.
But this goal has become our luxury in the implementation process. The reason is that our BOM material table is not clearly established, and there is no clear reference to the product material standards in procurement. What is more serious is that the PMC department's requisition requirements often cannot specify the material standards. This requires that the purchasing staff must spend more energy and time to understand the product structure, otherwise it is impossible to determine what materials need to be purchased and how much should be purchased. In addition, it is not conducive to improve the material utilization rate, but also greatly affect the calculation of MRP's material requirements when solid wood, board, veneer, etc. are purchased. Therefore, the number of purchases is the third roadblock encountered by our company, and it is another main cause of the failure of the project.
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