1. Misalignment of Production and Sales: How do you align your production with the Sales Department? How will the Production department know which orders are urgent? Or How will the Sales team know what is the expected delivery date of the order? Lack of coordination between the departments will lead to misaligned production, resulting in poor customer satisfaction.
2. Production Downtime: Although downtime can be due to various reasons, two very common reasons for production downtime are
a. Machinery Breakdown: Machines have a lot of moving parts that need to be maintained. If these are not maintained regularly, it can result in breakdowns.
b. Shortage of Raw Materials: The innventory of Raw materials needs to be managed properly considering its average demand and other seasonal variations. If not managed properly, it can lead to a shortage and thus result in production downtime.
Downtime of any type leads to lost production capacities and loss in form of other indirect costs like fuel or manpower costs.
3. Repeating the same mistakes: Making mistakes is ok. We learn from mistakes and not from success. But if we do not learn and keep on repeating mistakes, it leads to loss. As they say, “First time it is a mistake, the second time it is a choice!!” Imagine there was a manufacturing defect brought to your notice by one of your customers, you accepted the return and replaced it with a new product. On detailed investigation, you found out that the issue happened because the machine resets itself after a power failure. This important knowledge is going unrecorded. If there is no knowledge base, it is difficult to analyze the reasons and take preventive actions. Similarly, if Production output is less during a certain period since there is no data, it is not possible to analyze the reason. If the organization fails to learn from its mistakes, it will repeat those mistakes leading not only to financial loss but also hampered goodwill.
1. Solution to Misalignment of Production with Sales
Coordination and communication are key to aligning various departments with the organization’s goal. If software like ERPNext is used, creating a production plan that is aligned with the Sales Department is as easy as a few clicks. The production department can create a plan based on the Sales orders entered by the sales team. The production planning tool will create a list of Work Orders, Raw Materials required, and Work Stations at which these work orders will be executed. The Sales and Production department can then jointly schedule these Work Orders based on the expected delivery dates, available capacity, and other constraints. This results in a well-coordinated Production Plan that ensures that everyone is on the same page.
2. Solution to Production Downtime Issue
As discussed previously, two main reasons for Downtime are Breakdowns and Shortage of Raw Material. To minimize breakdowns, proper maintenance of the plant and machinery is important. Using ERPNext, you can schedule maintenance of the Machinery and log the Maintenance Visits. When a Maintenance activity is due, the system will send automated email reminders to the concerned team so that they do not miss out on any maintenance activity. To avoid a shortage of Raw Materials, proper Inventory Management is required. ERPNext can help you automate re-ordering so that you do not have to worry about Stockouts. We have covered these problems and their solutions in our previous video where we have discussed the Top 3 Inventory Problems.
3. Avoid repeating the same mistakes
Lastly, if we want to learn from our mistakes, a system that helps us log important data is necessary. ERPNext lets you record issues faced either by internal team members or customers in the Support module, which can be a good source of Knowledge base which team members can refer to and keep correcting the source of issues. Also since all the data including Sales, Purchase, Production, and Issues are recorded on one single system, making sense of the data through reports and dashboards is a lot easier.