Be More Effective, Agile and Connected
Manufacturing Trend: SharePoint for Manufacturers
By Jack Burnett
Microsoft SharePoint first launched in
2001, and has been associated with document management and
collaboration. Since then large manufacturers implemented
SharePoint, most often when they needed to set up collaboration
with all their plants. Bundled "for free" with other
Microsoft enterprise software, SharePoint mostly sat unused at
small and mid-market manufacturers.
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:
- Company, plant, department and project team sites - Web portals
for collaboration, document management and project management
- Point Solutions - Internal business applications using
SharePoint infrastructure with custom functionality for data
management, reporting and distribution
- 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.
Manufacturing Trend: Blogs are for Manufacturers, too
By Jack Burnett
For years, manufacturers have been
marketing their products with sales representatives, trade show
booths and product catalogs. More recently a strong web
presence and social media sites are being added to the mix.
The blog is an online marketing tool that can tie it
all together, giving manufacturers an efficient way to tell
the marketplace about their company and products.
For a manufacturer's web presence, I advocate a lean web methodology that
focuses on three important functions:
- Adding value to customers
- Providing a rewarding online experience for target
audiences
- 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.
DISC Offers Tax Advantages for Georgia Exporters
By Jacqueline Harris
DISC Offers Tax Advantages for Georgia
Exporters
By Yelena Epova, CPA and Robert
Verzi, CPA
As recently reported in GlobalAltanta.com, Georgia
exporters are a bright spot in an otherwise unfavorable economic
landscape. There is additional good news for Georgia exporters-an
overlooked export tax incentive is available which can reduce
federal and state income tax on such exports by 50 to 100
percent!
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.
Why Extend ERP
By Jack Burnett
Your ERP solution is installed and running...think you're done?
Wrong! Surveys and the Supply Chain Compass shows that
installation is not the finishing point; rather it merely signals
that you have reached the third of five stages in the Supply Chain
Compass (Bendoly and Jacobs 2005). A crucial phase, Stage Three is
the point at which you deploy the foundational solutions needed to
truly connect employees, vendors and customers...in short...it is
your value chain.
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.
Manufacturing Trend: Agile and Adaptive Operations
By Jack Burnett
SMB manufacturers tell us that in order to be successful they
have to meet their customers' desire for shorter and unpredictable
lead times at competitive prices - with quality being a
given. The uncertainty in the US economy and global market
means they must quickly respond to changes in customer
demand. To meet customer and market demands, the trend for
manufacturers is to improve operations to be more adaptive and
agile, and thus avoiding increases in finished goods inventory.
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.