Episode number 13 of the Business Central Manufacturing Show was with Matthew Woodhouse. Matt is the Microsoft Dynamics Team Director at Technology Management and runs its project delivery team. Originally coming from a manufacturing & distribution background, Matt first came into contact with Navision back in 1999. Since then he has been helping manufacturing companies. The interview evolved in a way that we looked at manufacturing and Dynamics 365 Business Central from various angles (e.g. from shop-floor data capture as well as from artificial intelligence). But, independent of how we looked at it: Matt always came up with very concrete tips that manufacturers should apply when it comes to an ERP system.
Tip #1: We started looking back at the beginning of Matt's career when he worked for a manufacturing company. It is no surprise, that at this time many processes still were paper-based. The lesson learned already then was that paper-based processes always suffer from comparably high latency and that manufacturers should strive at keeping their data as up-to-date as they can (ideally with shop-floor data capture).
Tip #2: There is no exception. Manufacturers have to excel at dealing with exceptions. They are more likely to succeed in doing so if they act on live data AND reserve some capacity to deal with exceptions (the responsiveness value often is higher than the cost of excess capacity).
Tip #3: Almost every manufacturer is driven by achieving two things simultaneously: deliver on time AND produce as efficiently as possible. The driving forces to achieve this (and to constantly look at) are (a) the reduction of lead times, and (b) the reduction of raw material holdings. Microsoft Dynamics 365 Business Central offers parameters to achieve this. Customers hence need to fine-tune first the setup of items via the planning parameters such as minimum order quantity, safety stock level, and safety lead time. Second, they need to constantly review how often products should get grouped and batched.
Tip #4: Manufacturing customers should not go to a manufacturing-specific ERP system. Most likely, these systems come with >50% functionalities that are so specific that they wouldn't need it. Instead, they should (a) base their operations on a very solid standard ERP system such as Business Central, then (b) extend the standard scope by purposely-built manufacturing apps, and (c) customize where it is truly needed. That way, they get a laser-focused system that they can virtually update on the fly.
Tip #5: When starting with an ERP system, manufacturers must develop a certain level of discipline to work with the system (and not around the system). To achieve this, they should avoid starting too complicated. Instead, they should go live fast, make the system work, then work with it, and adapt on its way. However, this kind of simplicity must be balanced with the right level of data quality.
Tip #6: If manufacturers follow tip #1 (shop-floor data capture), they open up some super compelling use cases in which artificial intelligence can make the difference.
On this episode, you'll learn:
- Why having timeliness of transactions is an underestimated value of an ERP system such as Microsoft Dynamics 365 Business Central.
- Proven strategies & recipes to handle the unexpected and to handle exceptions in your manufacturing business.
- That 50% of any ERP implementation is down to the people; it is the process you go through with the people (and how you can get shop-floor people behind a shop-floor execution system).
- Extensibility, customizability, and upgradeability are major advantages of a general-purpose system such as Dynamics 365 Business Central compared to special manufacturing ERP systems.
- That “data quality” and “keeping it simple” may not necessarily be conflicting.
- Why manufacturers (especially when implementing an ERP) should always remember that they pay people to make things rather than to make data.
- To which degree it makes sense to capture routing data, and analyze it to re-fine routings.
What to listen for:
- [04:50] Why having a certain level of extra capacity is a good strategy to manage/handle exceptions (and hence that excess capacity is not necessarily a bad thing to have).
- [06:56] Important parameters within Business Central that help manufacturers in running their business more seamless.
- [09:45] A very valid argument to convince shop-floor workers why they should provide live data: Having live data will help to avoid overloading them with work, pressure, and unrealistic expectations.
- [12:10] Why a manufacturing company always should go for a general-purpose ERP system such as Microsoft Dynamics 365 Business Central rather than for a special manufacturing-only ERP system.
- [14:36] An example of how efficiently Business Central allows for upgrades although the system may be customized. What were 100 days some years, came down to one week a few years ago and now is almost zero (if the customer runs in the cloud).
- [17:50] Traps to avoid when manufacturers move from no ERP or a legacy ERP to a modern system such as Microsoft Dynamics 365 Business Central.
- [21:54] A simple rule of thumb to solve the puzzle of “sufficient data quality” and “not too much detail”
- [24:47] Looking ahead into the potential value that AI technology could have when combined with shop-floor data.