Cloud computing, more commonly known as “the cloud,” is all about delivering computing resources such as data and applications on demand over the Internet. The cloud uses a network of remote servers hosted on the Internet to store, manage and process data. Extremely large amounts of processing power and storage are instantly available anytime and anywhere and the ability to scale up or down as needed is a big advantage to manufacturing firms. The high-tech and electronics industry has been among the first to gravitate to the benefits that come with cloud computing.
"1st Light Energy is a very fast-growing company that is a leading installer of custom-designed solar energy for residential, commercial and public sector applications," says Trey Lackey, director of IT and logistics at 1st Light Energy. "We have offices on both coasts and thousands of successful installations from Hawaii to Massachusetts. There is no question that we would not be as successful as we are without switching to a Cloud Salesforce AppExchange manufacturing ERP."
There is a word you might have skipped over in Lackey's quote - "manufacturing." Most Cloud ERP software is designed from an accounting or customer relationship focus. Lackey knew his company's software needed to be created from a manufacturing perspective. For instance, companies such as 1st Light Energy need ERP that will -
- Define primary vendors for direct material items to insure that qualified vendors are candidates for supplying the parts,
- Manage numerous revisions for both bill of materials and routings using Engineering Change Control which supports the buying and building of the right configuration in fast changing environments,
- Provide easily customizable email templates for Sales Order Acknowledgements, Quotations, Bills of Lading, Packing Slips and Sales Order Invoices,
- Offer RMA Tracking with multiple options to manage customer returns and
- Allow default settings by commodities for planning policies and lead times which facilitate item definition,
- Let components be issued directly from work centers which supports discrete planning, costing and WIP tracking, and
- Maintain historical purchase prices supporting the setting of standard material costs.
To do this a Manufacturing Cloud ERP for high tech and electronics manufacturers must let companies efficiently manage all aspects of their Supply Chain. It must have a Production Engineering module that manages items, bill-of-materials, reference designators and routings. Engineering Change Control capabilities need to enable easier integration with industry standard PLM systems. Components issued to a work order need to be set to backflush at the point of work order receipt or at specific routing operational steps by work center.
Work orders need to be created using a standard routing for the parent item. Of course, routings should be able to be later modified on the work order without disrupting the standard routing to make special ‘as built’ versions of an item. The scheduling engine should date the operational routing steps (which can be sequential or concurrent) and process them against a comprehensive set of prioritization rules. Production control managers must be able to easily reprioritize work orders visually with drag-and-drop capacity planning screens.
Another reason the typical Cloud ERP won't work is that this industry operates in a fast-paced and constantly changing environment. ‘As Designed’ versus ‘As Built’ work order inquiry capabilities must be available to make it easy for engineering and manufacturing to collaborate around pending engineering changes that may impact production. The software has to plan, track and cost inventory items by customer, customer/project or contract – a capability especially important to high tech and electronics contract manufacturers.
Once a project budget is set, actual labor, material , sub-contract and other charges must be tracked and visible in real-time. Up-to-date project actual vs. project budget numbers need to be only a click away via the project workbench. Item serial number revisions and condition codes must be used to track field replacements, data is especially useful for field upgrades, warranty replacements and product recalls.
If the Cloud ERP Can't Do This, It's Not a Manufacturing Cloud ERP
Once companies like 1st Light Energy decide to go on the cloud, that's only half the job. The next is to make sure the Cloud ERP they select provides them with all the answers they need. And, like 1st Light Energy discovered, this is only possible with a Manufacturing Cloud ERP.