MANUFACTURING

No matter what you manufacture, a poorly managed bill of materials can lead to massive inefficiencies and missed sales opportunities. Often, poorly managed BOMs mean different departments work with different sets of BOM data, so no one knows exactly what the company’s position is regarding inventory levels, production lead times, product cost, and other critical information. You cannot quote jobs accurately, ensure delivery dates, or take advantage of new and evolving opportunities if you don’t manage your BOMs efficiently.

SAP Business One eliminates BOM information disconnects. The platform provides a ‘single source of the truth’ for your BOM data and ensures everyone sees identical, accurate information. When all departments have the same knowledge regarding the BOM and BOM-related information, your core functions align. This means you can increase your revenue via faster product releases, lower product costs, and quote projects and lead times more confidently. Together, these improvements maximize customer satisfaction and profitability.

eBook: How an Automated, Accurate, and Integrated Bill of Materials (BOM) Solution Improves a Manufacturer’s
Bottom Line

Download this insightful ebook for vital success factors, common errors, and tips for simplifying your BOM management process.

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Watch how this furniture manufacturer uses SAP Business One to manage and share multiple product configurations and hundreds of BOMs.

They quote more accurately, have more available options from stock, and consistently issue the right materials to their production lines.

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Inventory control is a significant challenge for manufacturing businesses. On the supply chain side, many manufacturers have poor visibility into supplier inventory, lead times, and other critical data, making it difficult to plan production schedules, maintain inventory levels, and fulfil orders with fluctuating deadlines. When manufacturers lack customer-facing data from EDI, it’s nearly impossible to synchronise inventory with shipment updates, which leads to double counting inventory items and creates backorders due to unexpected fulfilment delays.

SAP Business One overcomes inventory control issues by leveraging BOM information as the basis for automated inventory forecasts. SAP Business One’s ‘Intelligent Forecast’ report predicts material requirements by examining previous customer orders and associated BOMs and applying advanced algorithms to recommend future inventory requirements. The BOM report guides your manufacturing process while helping your planners make intelligent decisions. SAP Business One also leverages common EDI interfaces to integrate with eCommerce systems, automatically launching new purchase orders when inventory drops to a user-defined level and ensuring inventory is optimised and stockouts don’t occur.

How SAP Business One BOM Reports Improve Inventory Forecasting

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Many SME manufacturing businesses must wait 90 days or more to receive customer payments. But because manufacturers need cash to purchase their inventory, many have turned to financing, either by loan or factoring. Factoring involves a financial firm assuming your payment risk, so if your B2B customer doesn’t pay, your business still receives payment. The downside of loans and factoring is when SME manufacturers can’t provide the financing company with data that supports the viability of the customer orders. Without irrefutable data, the finance company takes a larger fee to account for the higher risk.

SAP Business One helps you get paid more and have more cash available to keep operations going. With all customer history and customer-related data stored digitally, you can quickly aggregate the critical data that supports your claims of customer/order viability. Information, including customer-, order-, and SKU-specific details and projected costs, revenue, and timelines lead to lower loan rates and factoring fees. The result is more cash faster. 

Competing against manufacturers who use cheap labour forces you to find innovative business practices to thrive because you can’t compete on price – usually a deal-breaker for customers. Your products running head-on against foreign, low-cost competitors no longer means the end of your business, however.

SAP Business One helps manufacturers reinvent their business models. Rather than competing solely on the cost per unit produced, they become higher-value-add businesses. They add new channels, expand sales territories, open additional warehouses, tap into CRM, and offer more services to customers. SAP Business One provides the standardisation, controls, and integrations between your business areas to enable your organisation to shift how it operates and overcome challenges. Vision33, as your local expert, will map your existing business processes and recommend how to improve the efficiency, workflows, and reporting that will benefit your business as you define your new identity.

Digital transformation is reimagining business in the digital age by using digital technologies to create new (or modify existing) business processes, culture, and customer experiences to meet changing business and market requirements.

The Vision33 Saltbox Platform [LINK] for integration and workflows provides the pathways to add new systems and processes and modify existing processes for greater flexibility and agility in changing times.

Fully integrated with SAP Business One, Saltbox allows for innovative connections between systems and new ways of accessing and using applications and data with human interactions in workflows through app-builders and forms.

With the Vision33 portals and near-real-time integration for eCommerce with Shopify, Magento, and WooCommerce, SAP Business One can easily support your efforts to engage with consumers in the eCommerce mode of your choosing. Whether it’s for making additional sales to customers or attracting new customers through your shop, SAP Business One supports your sales efforts. There are also connections available for Amazon, eBay, and Facebook shops.

Small and mid-sized businesses that don’t take advantage of a true BOM when planning their operations are missing out on dramatic business process improvements. To appreciate how ERP can help your business thrive with better, more comprehensive information management, it helps to understand all the data an ERP-based BOM incorporates.

The Four Types of BOMs Explained

There are four types of BOMs. Each serves a separate function while pulling information from the ERP’s unified database. This blog describes the four BOM types and how they ensure your departments work together.

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The Information Found within a BOM

A BOM, also known as a product structure, contains a massive amount of information. This blog breaks down a BOM and illustrates it for you at high and medium levels.

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Why You Need Accurate BOMs

Regardless of what you manufacture or the BOM you use, an accurate and well-managed BOM increases your revenue by speeding product releases. It also lowers your product costs by eliminating errors throughout the manufacturing value chain of purchasing, warehousing, production planning, production, packaging, and delivery. Proper BOM management dramatically improves your bottom line. 

Managing Production Lines and Tracking Inventory via BOMs

Because they implemented an easy-to-use product configurator, Emerald Home Furnishings can accurately determine stock levels, correctly quote made-to-order products, and issue the right product to their production lines.

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Help Your Sales Team Close More Deals with Better BOMs

Assessing the BOM report in SAP Business One ensures that your sales pros know what they can sell, when, and to which customers – with associated lead times. Armed with this data, they can optimise sales strategies and improve customer satisfaction.

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Inventory management and superior inventory control are critical to manufacturers’ ability to meet their commitments efficiently. When you can see inventory in real-time and automate around perfectly timed replenishment, you no longer accidentally understock or waste resources tied up in stock. Production runs smoothly while your customers happily experience consistent on-time deliveries. 

Advance Adapters Exceeds Revenue Doubling

The complex products of Advance Adapters require detailed information-sharing with customers and prospects. The manufacturer switched to SAP Business One and more than doubled its revenue by better managing its production lines and streamlining customer views and feedback around project-specific data.

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Whether you’re a discrete or process manufacturer (e.g., food and beverage, medical device, and auto parts), traceability is necessary for product and consumer safety. Manufacturers need to see forward and backward in their supply chain and identify where faulty ingredients or components originated, where they were incorporated into finished products or batches, and which customers received them.

 The information customers and regulators expect during a recall includes:

• Manufacturer identity
• Manufacturer address
• Ingredient/component names
• Ingredient/component supplier
• Manufacturer's batch/lot number
• Customers’ receiving data
• Transportation and distribution records
• Expiration dates (food & beverage, pharmaceuticals)

Traceability is closely related to inventory management, and like inventory management, manual tracking is overwhelming and insufficient. This is why so many small and mid-sized manufacturers have a head start in traceability when adopting SAP Business One.

Highlights of Traceability Using SAP Business One

• Understand and track a product’s complete life cycle via batch and lot codes. 
• Track materials and products from procurement through production, sale, and delivery.
• Enforce rules to ensure procedures are followed when allocating batch and lot codes.
• Batch track raw materials or components and the units created as part of a production order. 
• Incorporate workflows that create product labels and prohibit products from passing to certain stages in the fulfilment cycle before label verifications occur.
• Stay updated on the evolving rules and regulations governing product safety and quality checks.

With SAP Business One, you can leverage your current ERP system, making traceability a bonus to your deployment.

The manufacturing industry is fast-paced, and automation can help you keep up by increasing productivity, reducing costs associated with waste, and making you more agile. For example, BOM automation. With ERP, the same system that contains your inventory data can automatically create BOMs. This eliminates the data silos made by disconnected systems and prevents inaccurate materials requirements, miscommunications, and production bottlenecks and shortages.

How to Become Data-Driven with a Single, Unified ERP System

Many manufacturers struggle to share information between multiple systems. Read why SAP Business One’s single source of all product, operational, and business data automate and accelerate your manufacturing business.

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Engine Manufacturer Eliminates Manual Processes to Focus on Growth

Using SAP Business One for manufacturing, this business now enjoys automated processes for accurately quoting customers, empowering their salespeople, managing orders, and providing traceability from the warehouse through in-field service care. 

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