Columbus ERP Software

Accurate Costing of Co-Products for Food and Drinks Manufacturers

Inside Columbus’ new guide to better managing co-products you’ll find common problems faced by food and drinks manufacturers.

Page 8 illustrates how an oat processor overcame complex processes to be able to gain a clearer view of its costs.

Issue

An oat processor produced several types of finished oats from raw oats, as well as some co-products that included oil and others that varied depending on raw material and eventual end output.

The business generally understood the process, but this was not being reflected in their ERP system due to the complexity of the formula structure.

Problem

The production of the finished oats was achieved by taking the oats through a production process that commenced with a feed preparation step, followed by a multiple production process including the pin and hammer mills that ultimately resulted in a finished product bag being irradiated.

A solvent was added to the process between the mills and then reclaimed as a co-product through an oil-stripper step. The usage and then subsequent reclaiming of the solvent could not be reflected correctly in the existing ERP system prohibiting accurate costing and planning.

The crude oil that was also produced as a co-product was refined, packaged and sold. Neither of the co-products was successfully configured as co-products within the product to allow for accurate costing and successful planning. In addition the manual reflection of the co-products back into stock was subject to inaccuracies and time delays.

Remedy

The co-products are now configured within the formula of the finished produce which allows the costs of co-products to be automatically calculated by Microsoft Dynamics. The planning calculations suggest production orders to generate co-products that meet the expected requirements and allow a full view of the net requirements of the business.

The costs of the co-product in the formula are configured using a total cost allocation method ensuring that the true cost of the final product and the co-products produced are accurately reflected.

Benefits

The co-products always result in a positive cost allocation and are considered and costed as part of the entire cost of the formula. The total cost allocation is defined, enabling the cost of the co-products to be represented correctly in the finished product of the oats. Basing the cost allocation calculations dynamically on the quantity reported as finished gives the business a more accurate picture of the costs throughout the system.

The co-products are fully tracked through production and into stock, removing the need to manually reflect stock in the system.

The calculated costs of co-products provide a true picture of total product costs, and the coordination of a co-product’s demands and supplies helps achieve production goals to efficiently plan the plant and give visibility of the inbound co-product from production.

To read the full Scenario guide on co-products click here.

Infographic: Concept Design Survey–The Latest Trends

According to recent research from our friends at PTC, more than 60% of designers, managers and senior executives agree that not enough time is spent on concept design. Plus, more than half say they sometimes need to recreate design data because their tools are incompatible.

Find out what your peers say about concept design in this Infographic: Concept Design Survey – The Latest Trends which covers:

• Information on cost, risk and tool trends
• What's working and what’s not
• How organizations manage concept design
• Team collaboration challenges
• And more

Download the complimentary Infographic now. »

How Manufacturers Can Control Warranty Claims More Effectively

Columbus has released a series of Scenario guides that highlight solutions to common challenges faced by discrete manufacturers.

In an extract from the free Managing Customer Requirements Scenario guide, we look at controlling warranty claims.

Issue

A manufacturing company provides 12-month warranties on the electrical equipment they supply to the oil and gas exploration industry. They needed to control the warranty claims tightly as there was a high occurrence of equipment misuse in the field. Additionally, they wanted to ensure that design issues affecting the equipment’s performance could be captured quickly, especially when a new range was being introduced.

Problem

Warranties had traditionally been provided as a “necessary evil” and claims were processed manually. Assessments of returned items and feedback from the field were buried in manual reports. There was therefore no easy way to analyze costs and trends.

Remedy

The service warranty feature of Microsoft Dynamics is now used to create a warranty contract at the point of sale. All complaints and claims are logged against this contract giving greater visibility of status and costs incurred. It is also easier to verify whether a claim is within warranty, or should be dealt with as a chargeable repair. The Columbus Product Engineering module is used to allow the service engineers to enter and track any engineering change requests that they feel are needed.

Engineering is therefore able to improve the reliability of equipment in the field.

Benefits

Key benefits were:

• Greater confidence in rejecting customer warranty claims which were either invalid or where there is a history of equipment mis-use in the field
• More timely and accurate information on defects in new ranges
• Better estimating of the likely cost of warranty provision, enabling a clearer view of product profitability by range

You can read the whole guide about how to more effectively manage customer requirements here.

Generate Faster Designs and Lower Costs with Effective Component Reuse

Manufacturers are challenged with a variety of product variations and versions, custom orders, engineering changes, demanding customer requirements while still having to innovate and grow their businesses. In order to be successful and ensure product quality, it is necessary to be able to capture every requirement and change accurately while keeping the flow of information moving throughout the organization.

To help, many manufacturers are investing in an end-to-end ERP solution like Microsoft Dynamics AX, and working with partners who have a depth of experience in implementing project engineering solutions to help manage change, improve collaboration, access data and reuse products.

One area that especially is important to manufacturers, specifically industrial equipment manufacturers, is the ability to reuse components and avoid “reinventing the wheel” by assigning attributes to products and components that match and meet certain requirements and are already tested.

Let’s look at an example of how using the a product engineering tool built in Microsoft Dynamics AX can help solve issues with product or component reuse:

Challenge – Purchased items are sometimes duplicated due to inconsistent naming conventions.

Solution – Establish consistent data criteria and assigning attributes to various parts or components

How can a Product Engineering module help?

Most companies attempt to use item descriptions to control the component. These are the same item:

• 10-32 X .875 SS FH PH W/NY
• Screw, 10-32 X 7/8” Stainless, Flat Head, Phillips, Nylok

Without data normalization, how would an engineer know that the record already exists?

Procedures must be put in place to ensure that consistent criteria are followed

• Free-form naming conventions can make this difficult.
• Attribute based systems allow for the criteria to be assigned consistently.
• Solution Example

Using the Engineering Product type feature, you are able to define required attributes for component families. The example below is for a product type “Screws”.

The following attributes has been assigned to the “Screws” product type:

• Hardware Type – This is a common attribute shared by other types of hardware.
• Hardware Size – This attribute allows for the diameter and thread count of the screw to be defined
• Screw Length – The length of the screw with a selectable unit of measure
• Hardware Material – This is the material callout for the screw
• Screw Head – This attribute defines the head type of the screw
• Screw Drive – This attribute determines the interface type to drive the screw into place.

Upon selection of the engineering product type while creating a new part number record, the attribute become fields that may require input to complete the part number record.

These attributes can drive the systemic creation of the part description field. The Engineering product type has the capability to map the attributes into the description field.

Here is the attribute formula for the part description

The following new item has its description created automatically at the attribute values are selected.

Now that the data is in place, parts can be searched for based on attributes.

This search would allow you to see all 10-32 Button Head screws in the database.

As you can see, the flexibility of Microsoft Dynamics and a project engineering solution allows industrial equipment manufacturers to structure attributes to meet specific needs. This structure allows companies to leverage the reuse of components, reducing costs, improving response times and increasing cash flow due to reduced stock items.

Almost Half of Manufacturers Expect Conditions to Improve in 2013

And a warm welcome to you for 2013.

Now that the resolutions and diets begin I thought I’d kick off the year with some encouraging news from our recent survey that shows 47 per cent of UK manufacturers believing that conditions in their market will improve this year. Only 12 per cent expect conditions to worsen.

Now, admittedly, our sample was relatively small, but it makes a change from the negativity we often hear in general media.

How do these results compare to what you’re seeing? Please leave your comments below.

Compared to 2011 how was business in 2012?

• 35% Better
• 47% About the same
• 18% Worse

How do you expect conditions to change in your market in 2013?

• 47% Improve
• 41% Stay about the same
• 12% Get Worse

Top 10 Business Books Manufacturers Read This Year

This year saw the launch of two books on Dynamics AX 2012 produced by Columbus’ consultant, Scott Hamilton (the first was written for food processors, and, more recently, Scott released one for discrete manufacturers).

But what else is being read at the moment?

Last week I asked manufacturers what business books they’d enjoyed in 2012 and what had stood out as particularly valuable. Today, in no particular order I list the top 10 for you to delve into over the Christmas break.

	Bounce: The Myth of Talent and Power of Practice Essential reading following an astounding summer of sport; if you’ve ever wondered what makes a champion, Bounce has the answer. Looking at controversial questions such as whether talent is more important than practice, drugs in sport (and life) and whether black people really are faster runners, the mind-bending Bounce is a must-read for the hardened sports nut or brand new convert.
	From Complexity to Simplicity: Unleash Your Organisation's Potential Complexity is one of the biggest challenges facing modern business. It is slowing companies down, costing them over 10% of their profits and harming employee morale. Yet very few people are offering practical advice on how to solve this problem. From Complexity to Simplicity will show you how to start your own simplicity revolution and achieve business success. So keep it simple and make more money!
	Thinking Fast and Slow Thinking Fast and Slow offers a whole new look at the way our minds work, and how we make decisions. This book reveals how our minds are tripped up by error and prejudice (even when we think we are being logical), and gives you practical techniques for slower, smarter thinking. It will enable to you make better decisions at work, at home, and in everything you do.
	Management in 10 Words In his fourteen years as CEO of Tesco, Sir Terry Leahy not only turned the company into the largest supermarket chain in the UK but also transformed it into a global enterprise. In Management in 10 Words he draws on his experience and expertise to pinpoint the ten vital attributes that make successful managers and underlie great organisations.
	The Fifth Discipline Peter Senge, founder and director of the Society for Organisational Learning and senior lecturer at MIT, has found the means of creating a 'learning organisation'. In The Fifth Discipline, he draws the blueprints for an organisation where people expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nutured, where collective aspiration is set free, and where people are contually learning together.
	Does It Matter?: Information Technology and the Corrosion of Competitive Advantage A bold and controversial manifesto on where information technology is headed, how its role in business strategy will dramatically change, and what this all means for business managers and IT suppliers A convincing manifesto on one of the most important business phenomena of our time, “Does IT Matter?” will play a central role in our ongoing debate about the future of IT.
	Now, Discover Your Strengths: How to Develop Your Talents and Those of the People You Manage Based on a Gallup study of over two million people who have excelled in their careers, NOW, DISCOVER YOUR STRENGTHS uses a revolutionary programme to help readers discover their distinct talents and strengths.
	The Goal: A Process of Ongoing Improvement Written in a fast-paced thriller style, The Goal is the gripping novel which is transforming management thinking throughout the Western world. The author has been described by Fortune as a 'guru to industry' and by Businessweek as a 'genius'. It is a book to recommend to your friends in industry - even to your bosses - but not to your competitors.
	The Little Book of Business Wisdom Pearls of wisdom from some of the greatest industrialists – past and present.
	Great by Choice: Uncertainty, Chaos and Luck - Why Some Thrive Despite Them All Ten years after the worldwide bestseller Good to Great, Jim Collins returns with another groundbreaking work, this time to ask: Why do some companies thrive in uncertainty, even chaos, and others do not? Based on nine years of research, buttressed by rigorous analysis and infused with engaging stories, Collins and his colleague, Morten Hansen, enumerate the principles for building a truly great enterprise in unpredictable, tumultuous, and fast-moving times.

What have you read that’s worth sharing? I welcome your comments below.

Optimising Quality Management Controls for Food and Drinks Manufacturers

Published this week is the latest ColumbusFood Scenario Guide that helps food and beverage manufacturers handle regulatory and quality control issues.

Inside the 12-page guide you’ll find a number of common problems and ways in which we’ve helped customers find solutions, including:

• Purchased material non-conformance reporting
• In-line production testing
• Batch attributes

 You can download the free guide here.

Columbus Customer Wins Manufacturer of the Year Award

Agri-services group Origin Enterprises plc has scooped the ICT in Manufacturing Award at this year’s glittering Manufacturer of the Year Awards in London.

The judging panel were impressed by Origin’s Columbus ERP solution - based on Microsoft Dynamics AX - that has helped Dublin-headquartered group standardise processes and drive new efficiencies, resulting in an impressive return on investment.

The award evening was The Manufacturer’s most successful ever, with over 600 people ramming the colourful venue, the modern Grange Tower Bridge Hotel, to the gunnels.

Lord Digby Jones of Birmingham compered the evening with characteristic bombast and zeal, lauding the assembled manufacturers as essential wealth creators on which the UK economy is based.

After collecting the award, Derek Wilson, CIO, (pictured centre) said, “I wish to convey my appreciation to the Columbus team, without whom this project simply would have not got off the ground. Their dedication, attention to detail and their focus on us, the customer, is a credit to them as professionals and to Columbus as an organisation. This award is recognition of them, as much as it is of us.”

Mary Hunter, UK Country Manager, Columbus adds: “We’re thrilled to see Origin realising improved efficiencies, better working capital and the visibility to make the right decisions. It’s well deserved that they have now been recognised by the wider manufacturing community for what they’re achieving.”

Last year the ICT in Manufacturing Award went to Fairfax Meadow after they too were commended for the results they’d achieved with their Columbus-based ERP solution.

Mary adds: “The Columbus team are committed to help our customers realise the potential from our business solutions and we are very proud that the manufacturing industry has recognised our customer implementations as industry leading.”

How Microsoft Dynamics AX Helped Transform a British Glass Manufacturer

Urgently needing to boost on-time delivery performance, glass processor Romag turned to Columbus and Microsoft Dynamics AX.

When North of England social housing company Gentoo Group acquired specialist glass processor and photovoltaic manufacturer Romag, the priorities for the new management team were clear: re-engage staff, re-open the factory – and put in place a comprehensive new ERP system, in order to put the business on a sound financial footing, going forward.

“Under our previous ownership, there had been a lack of visibility,” says ‘Dex’ Rimington, Consett, County Durham-based Romag’s systems coordinator. “We’d been using an old DOS-based system, which was no longer supported, and not fit for purpose.”

It was clear, too, that a number of operational improvements could be made. On-time delivery, for instance, was an important business requirement, and was one where the business’s performance left something to be desired.

For as well as solar photovoltaic glass and glass for transport applications, a product range of architectural and security glass is a major line of business for the company – including bullet-proof glass, and blast-resistant glass utilising glass polycarbonate laminating technology. And with specialist teams of third-party installation contractors pre-positioned on building sites ready to install Romag’s glass the moment it arrived, the ability to promise a reliable delivery date – and keep to it – was an important competitive differentiator.

“There wasn’t really a formal production planning system,” explains Rimington. “We were relying on the experience of long-serving staff in order to schedule production and promise deliveries to customers: it was all based on ‘gut feel’ and experience, rather than on a detailed understanding of the factory’s workload and each customer order’s individual work content.”

Exhaustive search

And so, in summer of 2011, Romag’s management team began surveying the ERP market, looking for a solution that would be a good fit for their needs. What’s more, stresses Rimington, those needs were fairly precisely specified.

Glass processing, he explains, is a fairly specialised business, and obviously the solution selected would need to be able to conform to the business’s technical requirements in this respect. Just as important, though, was the calibre of the ERP vendor in question, and the skills and capabilities of the implementation partner selected to deliver the solution.

“We had some very specific questions to ask of each potential supplier,” says Rimington. “How long had they been in the ERP business? What was the technology roadmap? And how was the product supported? And all of that was before getting into the specifics of how the solution addressed our particular manufacturing requirements, and what benefits we could expect.”

Similarly, he relates, a separate set of questions probed the capability and suitability of potential implementation partners.

“Again, it was important to go with a business that had been around for a long time, and which showed every sign of continuing in business for the foreseeable future: longevity was very important to us. And then, we wanted to establish how much experience they had of working with our kind of manufacturing operation, the support that they offered, and how in particular they went about the implementation process.”

By September 2011, the decision had been reached. The solution selected: Microsoft Dynamics AX , implemented by Columbus, a ‘Top 3' world-leading specialist in implementing Dynamics AX in manufacturing industry, with more than 6,000 successful implementations over a 22-year history.

And it soon became clear, says Rimington, that the combination of Columbus and Dynamics AX was a solution that was readily capable of exceeding expectations. Yes, Dynamics AX would deliver solid functionality in respect of sales order processing, financial accounting and production planning and scheduling – but undeniably, it also turned out to be able to neatly solve a number of other headaches that troubled the business.

“As our implementation team began working with their counterparts within Romag’s management, we quickly saw other opportunities to add value,” says Columbus project manager Rosalind Dechant. “Month-end accounting was labour-intensive, for instance, material shortages were a problem, and work-in-progress tracking was a challenge.”

What’s more, she adds, actionable management information was in short supply – holding out the prospect that Dynamics AX’s embedded analytic and reporting tools could deliver valuable business intelligence to in order to boost productivity, profitability, and material utilisation.

Time-to-benefit

And so it has proved, says Rimington, with the new system going live in July 2012, after a short but intensive implementation process, structured around Columbus’ proprietary implementation methodology SureStep+.

“Yes, the timescale was tight,” concedes Rimington. “And did we get every last detail correct, down to the very last bill of material? No: in any implementation, there will always be small niggles remaining after you’ve gone ‘live’. But the bigger picture was about putting in place a controlled manufacturing process, alongside back office functions to match – and there, we’ve been extremely successful.”

And what of the system’s ROI? It is, as yet, too early to say.

“The approach that we’ve taken is to provide the business with much-needed functionality, rather than trying to calculate savings,” he concludes. “There have been savings, and we’ll calculate them in due course. But the bigger benefits are clear: how do you put a value on reliable delivery dates, financial accounting, and instant visibility into work-in-progress?”

timeXtender Webinar Dates Announced

timeXtender, the agile data warehousing tool, proved to be a hit at Advantage 2012 earlier this month.

In response, Columbus and the timeXtender team are co-hosting a live webinar to take a closer look at what the tool can bring to your business.

If you want to simplify the job of consolidating data using a proven methodology, I recommend that you set aside 90 minutes in your diary to see why timeXtender is already delivering so much value to over 1500 companies worldwide.

To give you every opportunity to understand the value of this tool, we’re running the event twice across November and December.

For dates, times and an agenda outline visit the event registration page.