Are your manual manufacturing processes costing you thousands of dollars? The truth is that many manufacturers are losing a lot of money in both direct and indirect costs by using old, expensive manual processes instead of modern ERP automation. As a manufacturer, you are likely missing opportunities to improve and automate your workflow, which could be discovered by an ERP automation audit.
Here are some things to think about.
Why Manual Processes Are More Expensive Than They Appear
A lot of the costs associated with manual processes are hidden, and the primary focus is on labor.
- Duplicate data entry. Employees waste their time entering the same data multiple times.
- Human error. Every time data is entered manually, there is an opportunity for human error. This can then result in compliance and even safety issues.
- Delayed decision-making. Leaders may be stuck waiting for data, or may have to make decisions with insufficient data.
- Employee frustration. Employees can easily become frustrated with repetitive manual processes.
- Lost productivity. Employees entering data aren’t doing their actual jobs.
- Opportunity cost. Repetitive, tedious work may be done by highly skilled workers with high salaries or hourly rates, whose skills are needed.
Manufacturing automation can help with all of these costs. Here are some of the things you should consider:
Manual Process #1 – Entering the Same Information Multiple Times
One of the most common problems with older systems is them not talk to each other. This means employees then have to enter the same information multiple times. For example, instead of pulling vendor information from a database for a purchase order, somebody has to enter everything on the purchase order. The same thing can happen with customer information and sales orders, shipping data, and invoices. This can then result in high costs when, for example, a customer address is entered incorrectly, and a shipment is returned, resulting in additional shipping costs, delays, and reputational damage.
This increases labor and error rates and slows order processing. By integrating all of these systems, data can be automated and forms filled in with the data you already have.
Manual Process #2 – Spreadsheet-Driven Reporting
Few people like spreadsheets. Legacy systems often export ERP data into Excel, from which reports are then created manually. This results in version control issues and decisions being delayed or made using outdated information. Reports take longer and are less accurate, and are also often harder for stakeholders to read.
With modern systems, real-time dashboards and automated reporting allow leaders and stakeholders to make decisions quickly and send them right back to the factory floor. This allows manufacturing process automation to facilitate a process of continuous improvement rather than waiting for monthly or, worse, quarterly reports.
Manual Process #3 – Paper or Email Approval Workflows
When companies use email or, worse, paper workflows, mistakes happen. These workflows are often used for things like approving purchases, invoices, and quotes, as well as engineering changes.
Manual approval workflows are slow, not always visible to everyone they need to be, and may not be accurate. Alternatively, a wrong button can send details to people who don’t need them, at best generating spam, at worst resulting in security or compliance issues. It is far too common for somebody to send something for approval, but for it not to get to the destination, leaving everyone involved waiting in limbo.
Digital workflow automation and approval routing make sure everything is routed to the right people with fewer errors. Manufacturing workflow automation is one of the biggest ways to save money, and often neglected.
Manual Process #4 – Managing Customer Requests Outside Your ERP
Customer requests can come in through all sorts of channels – not just your e-store if you have one, but phone, email, website chatbots, even social media. Often this results in things like order status inquiries, spare parts requests, and document retrieval being outside the ERP. Data then has to be transferred to the appropriate communications channel.
This creates a customer service bottleneck that slows responses and reduces customer satisfaction. Integrating the workflow through customer service portals speeds things up and can have a significant ROI.
Manual Process #5 – Repetitive Data Validation and Reconciliation
Last, but far from least, data reconciliation, when done manually, can take a lot of time. This includes things like inventory checks, financial reconciliation, and cross-system validation. Hours can easily be spent checking data accuracy rather than doing more important things, and sometimes month-end and year-end close might be delayed. Operational risk increases – for example, inaccurate inventory can lead to delays in filling customer orders.
Automated validation rules and system integrations can speed this process up significantly and reduce errors.
How to Identify Manufacturing Automation Opportunities
Many manufacturers are caught up in one or more of these manual processes, but already own technology that can solve these challenges – if they were only using it effectively. Before investing in new systems, evaluate your existing ERP capabilities and business processes. Are you automating every workflow you can? Do you have systems in place, but employees are not using them for whatever reason?
An automation audit is a structured way to uncover practical improvement opportunities, including training issues and missed integrations, that can make a huge difference to your business moving forward.
Small Improvements Create Big Results
Automation doesn’t replace people; it frees them. With improved workflow and business process automation, your high-end employees can spend their time doing their actual jobs, not tedious data entry. Manufacturers that continuously improve their automation processes position themselves to increase productivity and scale.
Many of these improvements require only small investments in time and/or money to achieve significant results.
Ready to Discover Where Your Business Can Save Time?
Are you ready to discover your missed automation opportunities? If so, schedule an automation audit with Encompass Solutions. Contact us to request an automation audit today! Our knowledgeable team will do a comprehensive review of your current processes and help you find those missed opportunities and improve manufacturing efficiency. We can provide practical recommendations that leverage your existing systems and technology.
