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When it comes to continuous improvement programs, what jumps to mind for many manufacturers are production and the shop floor—conjuring up images of specialized production equipment, robotics and material handling systems, or product design changes to make a product quicker or easier to produce. These are always important areas for improving the business. But front-office operations often offer equally strategic opportunities for continuous improvement.

Continuous improvement initiatives in the front-office operations can help to improve accuracy, decision-making, and efficiencies that result in long-term cost savings. Not only are front-office tasks deeply entrenched in the business; they often require more tenured employees versus workers for production jobs that can come and go over time. By automating front office tasks, manufacturers can not only maximize the effectiveness of their day-to-day business operations; they can also free more senior people to focus on high-leverage projects.

Moreover, front-office automation can result in quantifiable improvements to the business. Consider a manufacturer that has automated individual customer pricing in the company’s enterprise resource planning (ERP) system. Now manual updates that took 2.5 to three weeks are completed in two hours. The same company also cut the billing process from a four-hour manual exercise to an automated one taking 15 minutes. These moves have not only improved employee productivity; they have improved accuracy. This has led to greater trust among customers and higher profitability for the manufacturer.

Getting Started

So, how can manufacturers start automating their front-office operations? Let’s begin by understanding four key automation concepts that impact the core office team, including employees in accounting and finance, order entry and customer service, inventory and purchasing, and planning and scheduling. They include the need to:

• Have information at your fingertips.
• Utilize automatic rather than manual calculations and reporting.
• Use digital data instead of paper-based information.
• Rely on automated workflows and alerts.

Together, these four concepts interact to form a framework for continuous improvement initiatives designed to deliver information, planning and results that are simultaneously more accurate and less labor-intensive.

In putting the front-office automation concepts into practice, manufacturers typically rely on a fully integrated ERP system to drive a combination of workflows and alerts. These workflows create a digital path for data and processes while the alerts manage exceptions. But to work, they need digital data. This makes the document control functionality of an ERP system a fundamental component of automation. It scans paper data into digital images and then indexes, orders and stores digitized documents along with structured data files and unstructured data, such as emails. So, the information is digital, secure, and readily accessible to authorized team members plant-wide.

Now, let’s review five real-world examples of front-office automation concepts driving continuous improvement within a manufacturing business.

1. Fulfilling a Sales Order

Automating the sales order process is an area where a continuous improvement initiative can yield substantial gains, since it touches so many other processes within the manufacturing operation. For example, if a sales order arrives electronically, the company’s ERP system should register the demand automatically. Or, if the order comes in through a phone call or email, someone at the sales desk should be able to quickly enter the order in ERP system’s order entry feature. Either way, once the order is in the ERP system, the customer’s accounts receivable (AR) status can be automatically checked.

In this example, the customer has established credit, so the ERP software will automatically create the demand in system, triggering an audit of available finished goods inventory. If sufficient inventory exists, the software will create the pick, pack and ship instructions for the warehouse along with the new AR entries. The order will automatically ship, and nobody but the warehouse will perform any manual actions.  

But what if there is not sufficient finished goods inventory to fulfill the customer order? In this case, the order workflow will check for the available raw materials, tooling, production equipment, and labor required to build the product. If the ERP software finds all the necessary resources, the job will be automatically scheduled and run in some future production window. Alternatively, if there is a shortage of raw materials, the ERP software can produce a purchase order for those materials and create a production schedule based on the known lead time for them. Additionally, the order desk can be immediately alerted about the situation; the unmet resource needs expedited, and the customer informed of the best available delivery date.

In this example, the automation of front-office tasks goes far beyond simply minimizing manual work. It also serves to consistently apply best practices for processing an order; managing the production scheduling process along with related dependencies; and ensuring timely, accurate communications with customers.

2. Optimizing Approvals

Let’s imagine that the manufacturer receives a special order requiring the purchase of a large amount of raw materials. The workflow dictates that orders of this size must be approved by finance. The purchase order is therefore routed to finance for approval, but the controller is out of the office, and the purchase order is delayed pending approval. Alert rules can see that the purchase order has stopped and notify, or alert, the purchasing department of the need to get approval from an alternate executive, or in an even more sophisticated system, automatically push the order higher up the approval chain.

The example here demonstrates how workflows and alerts can form the backbone of a front office continuous improvement process by changing the norm from rote supervision to management by exception—all while continuing to enforce the company’s policies.

3. Honing Inventory Control

As we have seen from the previous examples, the level of available inventory impacts a number of processes in a manufacturer’s operations. Because it typically represents one of the company’s larger cash investments, optimizing inventory levels is essential. There needs to be just enough on hand to support customer needs and avoid having to pay expedited purchasing and shipping fees.  

Automated inventory control systems precisely track the flow goods and can use the information developed in conjunction with machine intelligence or artificial intelligence (AI) to quickly model inventory requirements and anticipate needs. This serves to drastically reduce both the time and potential errors associated with manual inventory audits as well as the need to expedite materials. It’s also a good example of how continuous improvement through front-office automation directly contributes to productivity, efficiency and the bottom line.

4. Resolving Production Constraints

Raw materials are just one potential production constraint. Another is available machine time. So, what happens if the equipment required is scheduled for other jobs? In this case, automated scheduling within an ERP system can quickly perform a what-if analysis, i.e., “If we move the urgent job to the top of the list for the constrained machine, what other orders are impacted?” The answers are instantaneous and will either result in an acceptable re-ordering of the schedule or a definitive answer on the best possible delivery date.

Through the automated calculations, the manufacturer also gains the near real-time insights to inform the customer and the production team with minimal time and effort. This ability to manage exceptions with little to no disruption is an example of how continuous improvement keeps the business running as close to plan as possible while maximizing efficiencies.

5. Managing KPIs

All businesses and continuous improvement programs run better when clear budgets and key performance indicators (KPIs) are in place to measure progress in meeting the organization’s objectives. A natural result of front-office automation is reportable information against key KPIs, such as: How have we invested in inventory? What new orders came in yesterday? What is outstanding AR, and what are our cash balances?

Dashboards provide an automated mechanism for publishing KPIs. They access information from all parts of the system and provide it to authorized viewers in easily read formats, such as graphs and charts. In this way, dashboards can be viewed as a form of alert. Parameters are set on what to report, to whom and when. Then they run on auto pilot. Reports are published automatically and can even be configured to only pop-up when the results measured against a KPI are either too high or too low. This frees up valuable staff time while ensuring regular consistent reporting and supporting the ability to manage by exception.

Conclusion

The scenarios presented here are just a few ways that front-office automation can create the means and processes to achieve continuous improvement. By harnessing the power of a fully integrated ERP system to automate front-office processes, manufacturers can increase their profitability and gain operational benefits that will impact the entire business for years to come.