Lately however, manufacturers are discovering that SharePoint is actually a web technology platform, capable of being configured into business process integration and workflow automation solutions.   SharePoint is becoming the IT infrastructure for custom developed applications and third-party products, like Infor's Workspace.  With the latest version, SharePoint 2010, manufacturers are reducing IT costs and increasing productivity.

Three Levels of SharePoint Use in Manufacturing:

1. Company, plant, department and project team sites - Web portals for collaboration, document management and project management
2. Point Solutions - Internal business applications using SharePoint infrastructure with custom functionality for data management, reporting and distribution
3. Line-of-business application integration - Organizing ERP transactional data, sales and operations data, quality data and customer service data together in one place and adding work flow automation

Using SharePoint

SharePoint is becoming the preferred choice for project management, even for manufacturers that haven't standardized on other Microsoft platforms.  Without a collaboration system, employees exchange ideas and plans mostly through e-mail, which overloads inboxes and creates document versioning issues. Instead, project leaders use SharePoint to easily set up a portal where team members manage tasks, store documents and post status reports and news.  SharePoint also is the central repository for all the company policy, HR and other business documents.

A packaging manufacturer using SharePoint for managing documents saw SharePoint as a natural extension for IT business tools.  When the business needed to track operations performance on the shop floor and provide a quoting tool for sales, SharePoint was the technology platform for those two custom point solutions.  In three weeks, employees had the tools with better access to information in one system, increasing productivity and visibility of information.

A petrochemical industry service provider required its project teams to track their time following the business rules in its financial system.  A custom timesheet management application housed in SharePoint and integrated with Microsoft Dynamics GP and ADP Payroll Services provides a familiar interface for employees.  The application formats and delivers the timesheet data to the Dynamics GP project accounting module.

Which SharePoint

SharePoint 2010 Foundation, Standard or Enterprise - At a glance, Foundation provides all of the base functionality, Standard adds the social elements, better search and advanced metadata functions, and Enterprise includes more advanced business intelligence and reporting.

For small and mid-market manufacturers the decision is simple - SharePoint 2010 Foundation.  This "free" edition contains all the core functionality and architecture drawn on by the other two commercial editions.

SharePoint Foundation includes document management and collaboration, wikis, discussion boards, blogs and the ability to organize data and control access.  It includes integrations with Microsoft Office, and a mobile interface.  It also includes all the Office Web Apps - web-based versions of the standard Office applications.  Most importantly, manufacturers have a web technology platform to quickly and cost-effectively implement internal business applications.

TwinEngines and SharePoint

At TwinEngines, SharePoint 2010 Foundation is our repository of all the information we want to share.  We use a custom project management template to easily create a web portal for each customer.  We track our project labor costs with a custom timesheet application tied to Dynamics GP for invoicing.

For our customers we have created .Net Windows application technology that is tried and tested over the past 15 years.  We have transitioned that proven .Net Windows platform to a web technology platform using SharePoint Foundation 2010.  Today there is still a place for each platform for manufacturers, but the line between them is blurring.

Our value is business process work flow automation, integrating data from ERP, MRP or financial systems into the SharePoint platform with custom development.  SharePoint Foundation provides a common interface for sales, operations, quality, customer service employees, and connects customers and partners to your business.

Bringing all internal manufacturing applications into one platform and providing a single view of data across ERP/financial, CRM and operations systems - including cost estimating, configurators, production scheduling, work order processing, inventory and shipping - enables manufacturers to be agile, effective and connected. 

Using the SharePoint technology platform, TwinEngines solutions enable more efficient operations and reduce your IT costs.

For a manufacturer's web presence, I advocate a lean web methodology that focuses on three important functions:

1. Adding value to customers
2. Providing a rewarding online experience for target audiences
3. Presenting your company as a professional organization and an industry leader

The company blog is the one component of a manufacture's website that helps provide all three.  The blog is where customers can learn about product updates, new product announcements, and company initiatives.  Over time the blog becomes the manufacturer's knowledge base for customers, with a treasure trove of information all in one place.

Many times, manufacturers have valuable information just sitting there, but cannot get it out to customers efficiently.  The blog is an effective, lean solution to this problem.  It is also a great communication tool for manufacturers to take all the topics of conversations each sales and customer service representative has with individual customers, and immediately make all customers aware of them at the same time.

The manufacturer's web portal is the place where customers login to find specific information such as their pricing, order history, spare parts, warranties, RMAs, etc.  The blog, however, is the place for all customers to find common information such as troubleshooting advice, demonstration videos, and answers to frequent questions about products.  Manufacturers can address these once and have the information immediately available to all customers to find any time of the day.

Manufacturers are adding social media by creating Facebook and Twitter accounts, urging customers to "like" or "follow" their company.  Followers gather on the social media sites, which is nice; but, there is not much value for the customer until there are important, timely updates about the products, the manufacturer and the industry to discover.

Twitter and Facebook become valuable tools for a manufacturer, when they lead customers to the most recent news and updates found in the manufacturer's blog.  Customers have another way to interact with the manufacturer and provide feedback.  The conversations on the social media sites center on the manufacturer, the products and benefits for customers - all topics that help attract new customers.

Of course, adding value to customers and selling more products is always a business goal.  The most successful blogs, however, are those viewed as collections of information that benefit everyone in the industry; not a blog just perceived to be run by a company trying to sell products.  This is taking the blog to another level that demonstrates the manufacturers' thought leadership and innovation, distinguishing the manufacturer above the competition.

The blog not only informs customers about products, it is viewed as a forum for ideas, trends and the exchange of information that benefits the manufacturer's industry.  Customers visit the manufacturer's website blog on a regular basis to find product information and to learn about their industry, not just when they need to find out how to solve a problem.  The manufacturer is seen as a trusted, integral partner for customers and suppliers, and as an industry leader.

Specifically, if your business has either type of transaction listed below, you can convert ordinary income (taxed at about 34 or 35%) to capital gain income taxed at 15%. The following types of income qualify for this special tax benefit:

1. Exported property which is manufactured in the United States and used outside the US or,
2. Engineering or architectural services rendered for projects located (or proposed for location) outside the United States.

To take advantage of this tax incentive, you will have to form a U.S. corporation and elect for it to be treated as a domestic international sales corporation (or DISC). The DISC is essentially a paper company and needs very little substance. Its taxable income is computed using special pricing rules, but it does not pay U.S. income tax. A DISC can earn income in an amount equal to the greater of:

• 50% of the taxable income of your export sales; or
• 4% of the gross receipts on the export sales.

The amount determined under the 4% method cannot exceed the total amount of taxable income derived from export sales. The income earned by the DISC would be subject to the 15% income tax when distributed to its shareholders.

Here's how it works:

• Company XYZ forms a DISC. Company XYZ has $3,000,000 of export sales.
• Assume that the cost of goods sold relating to these sales is $1,500,000 and other expenses are $500,000, leaving a net export profit of $1,000,000.

 XYZ Corporation would use the 50% method (described above) since this alternative would generate the most tax benefit. Therefore, $500,000 (50% of $1,000,000) would be subject to tax at 15% instead of the corporate rate of 34% (if XYZ was a C corporation) or 35% if XYZ were and S corporation (assuming the shareholder is in the top marginal individual tax rate). Assuming the later, XYZ Corporation and its shareholders would save $100,000 ($500,000 * (35% ‐ 15%)) in federal income tax per year. In addition, state income taxes can be saved by using the DISC structure. The savings is unlimited. The more your business exports, the more the potential tax savings.

Taxpayers can take advantage of these substantial savings only after they form a U.S. corporation and make an election to treat the company as a DISC.

Please feel free to contact Yelena Epova or Robert Verzi, International Tax Partners with Habif, Arogeti and Wynne, if you'd like to discuss this tax savings opportunity.

About the authors:

Yelena Epova leads HA&W's international services group. She specializes in advising domestic and international companies on international tax issues and tax planning strategies regarding inbound and outbound operations.

Robert Verzi is an international tax partner with HA&W.  He has more than 25 years of experience providing international tax solutions to publicly and privately held corporations on an array of international tax matters, such as foreign tax credit management and utilization, structuring foreign and domestic operations, international mergers and acquisitions, and export tax incentives.

According to a survey of North American APICS members, the majority of "best of breed" manufacturers are moving beyond Stage Three by extending their ERP systems to address specific needs inherent in their industry or company (APICS, January 2004). These "extensions" provide solutions that no existing ERP system can address - notably, the specific business requirements that make them unique. The efforts produce competitive advantages and business agility, and propel the manufacturer into the fourth and fifth stages of the Supply Chain Compass.

The questions then arise - what systems are necessary...how many are necessary...and how can they be added? According to the January 2004 APICS survey, "best of breed" manufacturers are able to achieve specific goals by addressing related business functionality issues. For instance, if their objective is to increase production, then the manufacturer deploys extensions (listed in order) designed to generate productivity gains:

1. Inventory Management
2. Factory Planning and Scheduling
3. Demand Forecasting and Planning
4. Warehouse Management
5. Data Warehouse
6. Product Data Management

Alternatively, if increased revenue is the goal, manufacturers deploy extensions to achieve meaningful revenue increases (listed in order):

1. Demand Forecasting and Planning
2. Inventory Management
3. Factory Planning and Scheduling
4. Quality Management
5. Call Center Management
6. Warehouse Management
7. Customer Relationship Management

According to the survey, these "best of breed" manufacturers deploy an average of five extensions to their ERP systems.

How to Extend your ERP

Microsoft provides such a platform, allowing easy extension development that integrates seamlessly with the current ERP investment, and facilitating a comfortable and familiar user experience for employees, customers and vendors.

While informative, the findings of the Bendoly/Jacobs and APICS studies leave many manufacturers asking what they should do to remain agile amid an environment of new best practices and increased competition. First, evaluate the current ERP system and its ability to support current business processes. Second, identify gaps between current capabilities and outstanding business needs. Third, identify if any gaps can be resolved through reconfiguring the current ERP solution, upgrading your the solution to its current release or accessing third party solutions available for the specific system. Fourth, commit to developing the solutions if they do not exist. The result will reduce competitive parity and increase competitive advantage now and in the future.

Agile and adaptive manufacturing means that manufacturers have visibility of their production capabilities and their manufacturing value chain, and have the ability to quickly react to changes in customer demand, supply, and conditions on the shop floor.

Manufacturers are more agile, flexible and adaptive to the changing marketplace when they have an automated management solution enabling real-time coordination, showing key performance indicator data in dashboards, and allowing employees to manage by exception with alerts. The trend is to give the decision makers one place to go to easily view raw materials availability, see customer demand and know the constraints on the shop floor - all in real-time.

Automated management solutions supporting agile and adaptive manufacturing provide a centralized, synchronized, real-time view of the enterprise - across the front office and shop floor to value chain partners.  ERP systems help, but unique gaps exist between ERP, the shop floor and SMB manufacturing partners.  Implementing manufacturing visibility solutions bridge these gaps, consolidating shop floor and enterprise data that enables efficient decision-making necessary for agile manufacturing operations.

Manufacturing operations visibility systems push data from engineering and operations into ERP systems and pull data out from ERP to the shop floor and the web, creating a unified view of orders, schedules, quality control and inventory.  They provide real-time visibility of the shop floor, event management and analytics that enhance problem solving, accountability and predictive operations.  As a result of implementing a manufacturing visibility solution supporting agile manufacturing operations, SMB manufacturers see that product quality improves and variability is reduced.  Another key result is that custom jobs and rush orders become just part of the standard process, opening up new opportunities.

Agile and adaptive manufacturing is rarely achieved at SMB manufacturers using disparate spreadsheets and standalone proprietary systems that do not share critical business data.  When different, unconnected IT systems are used to collect and maintain business data, the information is often not useful to employees for day-to-day operations due to the cumbersome nature of finding the information and pulling it all together.  SMB manufacturers end up with silos of information in each department resulting in redundant, wasteful management and usage.

It is important that the manufacturing visibility solution integrates the front-office to the shop floor and with vendors and partners.  In a recent global study by the Aberdeen Group, manufacturing companies that automate and harmonize workflows throughout their company and with suppliers and partners produced 66% greater improvement in reducing the total time to delivery. The study found that these companies gained more than 10% in market share.

Manufacturers wanting to be more agile and adaptive can start by studying their operations processes and how they respond to changing customer demand and marketplace.  An assessment is performed of the current visibility of the shop floor, value chain partners, and decision making processes.   People, business processes, information systems and technology infrastructure are noted.  Typically the first application created is automating production scheduling, implementing as an extension to ERP or as a cornerstone application of the new manufacturing visibility system.

TwinEngines' custom manufacturing operations and web portal solutions are one option for SMB manufacturers.  Our experience and solutions cover the spectrum of manufacturers using spreadsheets and Microsoft Access and no visibility of the shop floor to those that need to evaluate and extend their ERP to the shop floor and partners on the web.  SMB manufacturers find us most valuable in assessing the current ERP/MRP/financial systems in place and creating the strategic technology roadmap showing the right mix of legacy systems, third-party products and custom systems on top of the technology infrastructure needed to support agile and adaptive manufacturing now and in the future.

To continue the discussion on agile and adaptive manufacturing or to discuss your manufacturing operations management capabilities, please contact us at 404-522-4262 x606.

Problems we see in quality initiatives at small and mid-market manufacturers include:

• How to manage workflows and approvals?
• How to make sure updated procedures are being followed?
• How to manage the full impact once the problem is found?
• How to organize and analyze all the transactional information, documentation and information from the field?
• How to make up for deficiencies in the ERP system to fit their process?

The pace is getting faster for small/mid-market manufacturers.  They must not only compete on timeliness, but also quality and price.  We are seeing that disparate spreadsheets, databases and ERP systems disconnected from quality workflow processes and documentation hinders the flexibility and consistency needed to deliver the highest quality manufacturing services and cost effective product delivery.

SMB manufacturers are focusing on quality documentation, working on quality policies and procedures, using statistical process control systems, and striving to meet ISO standards. Manufacturers are discovering that their ERP system is a poor fit for their quality business processes. They employ 'workarounds' or manual sub-systems. Another approach is to build a separate IT system to make up for the deficiency; in many cases data is dumped into a spreadsheet or a Microsoft Access database.

These isolated systems and processes are fine for looking at anomalies, but they rely on people to pull it all together.  When a part fails in the field the quality manager typically has to look in the different systems and talk to the employees and suppliers involved - like a detective painting a mental picture.  It is a painstakingly slow and costly process and the analysis and resolution may be locked away in that one employee. Often times the effort fails to address the root cause and total impact on all customers. 

TwinEngines is addressing these issues with a custom technology solution that integrates people, process and information together, making quality part of the entire manufacturing process. Whether it's a repetitive manufacturing environment or engineered-to-order manufacturing, there are three core functions that a quality technology solution should provide:

1. Real-time workflow and event-driven corrective action reporting through the entire quality process tracking approvals and follow-ups in the future.
2. Integration to transactional information such as vendor, purchase orders, receiving, work orders and RMAs.
3. Capability to bring all the information together in one place for real-time resolution, analysis and compliance.

The result is a quality management tool providing:

• Visibility to all quality information and transactional data
• Real-time access to all revision-controlled manufacturing process and quality assurance system documentation
• Product quality data collection, reporting and management from incoming inspection through resolution and to periodic compliance audits
• Support for ISO initiatives

The technology solution should allow tasks to be accessed instantly by employee, customer, product or process. Once the task is displayed, all relevant information pertaining to the issue must also be displayed; activity on the task must be date stamped and audited for management control.

When there is a quality issue the velocity of resolution is critical to meet the customers' expectations and demands.  Small and mid-market manufacturers must be able to quickly identify the issue, recognize the full impact, and react to solve the issue. 

To meet these needs the trend is convergence and visibility of quality processes, information and workflows.  It is becoming too difficult to work with isolated information systems that slow the response to customers, increase the costs of management and don't ensure quality initiatives are being fulfilled. 

Small and mid-market manufacturers are turning to technology solutions that provide centralized communication, visibility to all information and integrated workflow management. 

Manufacturers in today's marketplace face pressures to provide employees with the information they need to make critical decisions, and deliver information in a way that is cost-effective. To meet this challenge, TwinEngines deploys manufacturing operations solutions used by all departments across the enterprise and with external partners in the value chain.

How do TwinEngines manufacturing operations solutions fit into the real-time enterprise?

• Providing information, in real time, to the people who impact key business processes - front office and shop floor employees, management, suppliers, partners, and customers
• Delivering  information to people the way they want it - in the most commonly used formats, touch screen monitors, mobile devices, web pages, Excel, documents, and email
• Utilizing a personalized, secure, organized approach to delivering information broadly throughout the enterprise
• Increasing people's ability to interact with information to make decisions
• Using web portal technology to meet the growing demands for collaboration across the global value chain
• Reducing development and deployment time and cost with our manufacturing visibility toolkit and technology platform

The real-time enterprise is all about working with up-to-date information, getting rid of bottlenecks, and using speed for competitive advantage.  TwinEngines' manufacturing operations systems and web solutions provide the technology that manufacturing companies need to achieve the real-time enterprise.

Here are some highlights from the presentation:

The Dynamics AX strategy includes:

• Invest in industry relevance for rich vertical ecosystem
• Focus on Global Market capabilities: multi-site, -legislation and - language; n-site central deployment
• Enable 2 Tier ERP deployment
• Continual productivity increases for ERP users
• Target organizations with 200-7,500 employees

An example of a 2 Tier ERP deployments is Dell, who uses Oracle for their financials and is using Dynamics AX at their 6 manufacturing plants.

Microsoft sees the future of enterprise software satisfying 2 sets of interlocking requirements:

1. Design for People requirements - a person's workplace, dynamic nature of that workplace and information presented in context of the workplace
2. Build for Change Requirements - the application enables the right work process changes, it evolves with pace of business change and can adapt to the changes, and preserve the integrity of business processes during change.

They are tailoring Dynamics AX to handle the transaction oriented processing of ERP systems and also be process oriented, a driver and enabler for process change and adaptable workflows for processing.

Mr. Hertogh pointed out that Gartner in July 2009 considered Microsoft Dynamics AX a 'Leader' in the Midmarket and Tier 2-Oriented ERP Magic Quadrant.  Gartner defines the Tier 2 ERP market as products with a global presence and specifically tailored to for product centric midmarket companies with roughly 100-1000 employees.

In the last quarters of 2010 and first half of 2011 Microsoft has the following updates planned:

• Industry Capabilities - Dynamics AX for Retail
• Horizontal Capabilities - Connectors for Dynamics CRM and SAP, Payroll
• Technology Capabilities -  Oracle2SQL data Migration Assistant, Azure capabilities and the Intelligent Data Management Framework.

The Intelligent Data Migration framework is a new tool to help analyze data storage and assist in removing or archiving redundant and historical data for better database performance and to reduce storage costs.

• 67% find a slow website a few times a week or more
• 84% are only willing to try a slow website a few times before giving up
• Over a third say they are less likely to return to a slow site

These are consumers that are used to sites like MSN, Google and Yahoo!  Of course not all of us have the resources available to those guys.  What makes it even more difficult these days is the variability of browsers on the market.  The latest IE browser used to dominate, but I read on Website Magazine that  IE 8 has almost a quarter of the market now, and earlier versions of IE plus the other browsers like Firefox, Safari, and Chrome account for over three quarters of the people.

So what can you can you do?  Problems can occur anywhere in the web delivery chain: from the hosting datacenter to the third-party services used by the website to the ISPs to the browsers themselves.  If you can afford it, testing networks offer a fast and easy way to test and monitor your website performance for your visitors, and determine where all the problems are and if you need to optimize for the browser.

Browsers have evolved from just rendering web pages to now being responsible for well over half of the overall processing time of websites.  There is probably room for improvement at the browser. For those of us with limited means, this means that we need to look at what front-end improvements to make for the most popular browser(s) that will yield the biggest return for your web visitors.  Only concentrate on those that the majority of your visitors use and focus on the areas of your website that are important to you and your users.

Web Analytics tools, such as Google Analytics, tell you what browsers visitors are using and what type of internet connection they use.  They also tell you what pages are viewed the most.  You know what pages you want viewers to view the most. For tips on design and performance optimization of your website, I suggest looking at 2 tools that integrate with the Firefox browser:

• Page Speed - Page Speed performs several tests on a site's server configuration and front-end code. You get a set of scores for each page and suggestions on how to improve performance.
• YSlow - YSlow analyzes web page performance by examining all the components on the page, including components dynamically created by using JavaScript. It measures the page's performance and offers suggestions for improvement.

One suggestion, don't get wrapped up and spend a lot of time and resources trying to get good scores on these tools without yielding significant improvements for your users.  There is a lot of information online to research and plan your improvements.  A good place to get best practices for speeding up your website is: http://developer.yahoo.com/performance/rules.html.

Why do shoppers decide not to buy from you during your check-out process on your eCommerce website?  According to a May 2010 Forrester Research study, respondents cited these top 5 reasons:

1. Shipping and handling costs (44%)
2. Not ready to purchase the product (41%)
3. Wanted to compare prices on other sites (27%)
4. Item was priced too high (25%)
5. Wanted to save products in my cart for later consideration (24%)

Notice that website design or performance did not make the list.  People shopping online are just like people shopping at the store.  They are there to compare products and prices.

The one big difference between the web and brick 'n mortar stores is shipping costs.  People know how much money they spend in gas and car repairs to shop at stores.  On the web, shoppers are suspicious that a manufacturer or distributor tries to increase profits with their shipping costs.  At TwinEngines, we suggest offering free shipping when possible and using conditional promotions that lowers shipping based on quantity or total cost of products. 

All eCommerce software has coupons and promotions built in, but there are times when we need to customize the software to meet a company's unique offerings.  That is one of the reasons it makes more sense to use open source eCommerce software or purchase eCommerce platforms that allow you to customize the source code.

TwinEngines works with both types depending upon the size of the small or mid-market manufacturing company and the sophisttication required on the eCommerce website. TwinEngines also focuses on lean operations starting with lean web for eCommerce.   

It is important that the web eCommerce data seamlessly integrates with your financial or ERP system and your fulfillment process.  This is another reason when being able to customize the eCommerce software makes sense - giving you the flexibility and agility to synchronize information across your organization for efficient, lean operations.