It’s Monday, and your warehouse manager is on vacation. Your assistant manager should be in charge but calls in sick. Soon, production has used so much of a single item that inventory level is becoming dangerously low, putting Friday’s commitment to an important customer at risk. Lead time delivery doesn’t support the schedule. There’s expediting, but that will send your margin down the drain.
If you’re in operations, manufacturing, or supply chain, this is garden-variety stress.
We’ve all witnessed – or worse, participated in – the fire drill that comes next. Does someone see if the customer will forgive late delivery? Does he call the supplier and request costly expedited shipping of the item he needs? Is either possible? If not, then what?
Run your operation smarter and plan better. With proper business automation, you can avoid such situations. Here are the top five benefits we see our clients enjoy from automating processes in your business.
Benefit #1: Respond to issues before they are issues
Newer ERP systems allow you to automate virtually any business process. The warehouse issue above is easily solved through MRP and automatic alerts (of minimum inventory levels) and can happen even if no one in the warehouse checked inventory levels that week. Rather than depending on people, an automated process would trigger an alert of low inventory levels well in advance of lead times. By having minimum threshold levels established in ERP, the system would automatically generate a notification and purchase order for any item with an inventory level below its threshold setting. For the described scenario, there never would have been an item shortage issue.
Benefit #2: Streamline processes
Workflow automation is readily available in newer ERP systems. By setting up workflows in your ERP, you can ensure that each person receives prompts (along with the necessary background content) as soon as it makes sense to do so. Moreover, when someone neglects their part of the workflow, the system can send out alerts, reminders, and even workarounds.
Benefit #3: Introduce cost efficiencies
What happens when you forget to ship an item on time? You pay more for expedited shipping. How do you handle a situation where accounts payable paid for goods you never received? That hurts cash flow and may cost more to obtain replacement goods. How many early-bird discounts have you lost because of slow management approvals? These negatively affect revenue and expenses; by automating processes, especially with rules and timing enforcement, you can save money.
Benefit #4: Minimize human error
Thinking machines have fewer bad days than humans, and many of the processes that run in ERP are data-driven and involve number crunching that people find tedious. Why have people do it at all? Your ERP software can perform calculations and serve the results for multiple uses. Free your people up to do higher-level tasks.
Benefit #5: Boost morale
The more involved they are, the more your people buy into the business – which means giving them higher-value work of which they can be proud. When people feel they’re contributing to the success of the business, they feel valued. Typically, the lowest morale exists among employees who do long hours of tedious work.
Which business processes should you automate?
Nearly every business process can benefit from automation. The ones to target first are those that drain the most employee time or cost your business the most when performed inconsistently. At Acuity, we have helped hundreds of clients identify where and how to automate their business processes for a better bottom line. Contact us today for an evaluation of your business processes.