The end of 2023 is nearly here. Companies are hustling to fill the last purchase orders before the holidays so employees can take a much-needed break. While many in the custom manufacturing industry would rather be enjoying festivities, critical end-of-year obligations cannot wait.
Typical assignments at this time usually include holiday production scheduling, financial closing, and yearly physical inventory. Often these are considered daunting and unpleasant duties for those involved. However, businesses can improve their year-end processes while planning for the coming year by using the tools available in their ERP and WMS software.
Closing the Books with Precision ERP Software
For custom manufacturers, processing a quick and painless financial closing is more than just a year-end task. It’s imperative to maintain accurate financials throughout the year as well. This applies to all types of custom manufacturing – distinctive cabinetry, unique windows, luxury recliners, or trendy window fashions. The implementation of ERP software for manufacturing is a game-changer for make-to-order businesses.
Financial Closure Process
The year-end financial close provides a thorough review of all fiscal activities throughout the year. Tasks encompass reconciling bank statements, scrutinizing accounts payable and receivable, and confirming the meticulous documentation of financial statements, invoices, and receipts. By utilizing an ERP with integrated accounting software, companies can streamline the process, making it easier to spot discrepancies.
Taxes and Compliance
The conclusion of the fiscal year signals the onset of tax preparation endeavors. It is imperative to ensure the accuracy and completeness of all financial records before filing. Also, it’s an opportune moment to scrutinize any tax changes that could impact your business in the approaching year. Frontier ERP offers an integration with Avalara tax software that takes some of the pain out of compliance. For example, Avalara hosted a webinar in December 2023 about automating the collection, validation, and storage of tax exemption certificates. It’s one of the many ways automation can improve how your custom manufacturing business handles taxes and compliance.
The ERP Platform
Manufacturing ERP software systems that include a financial module streamline accounting processes. ERP software integrates various business functions into a unified platform, from order processing and inventory management to production planning and financial reporting. The best ERP software provides a complete and cost-effective solution for error reduction and financial consistency.
A key advantage of using ERP software during financial closure is data accessibility. Accounting can easily find accurate historical records and real-time data since everything is stored in a centralized database. This expedites the closing process and empowers a company to make informed decisions based on current financial insights. Forecasting also becomes more straightforward with the aid of a quality ERP system for custom manufacturing.
Holiday Production Scheduling: Balancing Demand and Resources
The holiday season often brings an influx of customer orders. This challenges custom manufacturing businesses to balance demand and resources efficiently. Effective production scheduling is crucial during this period. Custom manufacturing ERP software plays a pivotal role in enabling optimized production planning and scheduling.
An attentive plan lies in its ability to efficiently schedule the appropriate team members during the season. Understaffing could lead to production delays and unhappy customers. By strategically planning employee shifts, custom manufacturers can optimize productivity, enhance order fulfillment speed, and maintain product quality. Additionally, a carefully crafted schedule allows for fluctuating order volumes, addressing the dynamic nature of the holiday season.
ERP software offers production management, planning, and scheduling tools that minimize the risk of overruns, stockouts, or unstaffing issues. These tools allow businesses to allocate resources efficiently and create realistic production timelines by analyzing historical data, demand forecasts, and market trends.
In addition, manufacturing ERP systems enable real-time communication and collaboration among different departments. This ensures that every department involved in the production process is on the same page. The collaborative approach enhances agility, allowing businesses to adapt quickly to unexpected changes in demand or supply chain disruptions.
Mastering Inventory Management
At the end of the year, make-to-order manufacturers face a pivotal task: doing physical inventory. This process goes beyond the routine. It serves as a crucial insight into current inventory levels, enabling informed decisions regarding future production and sales strategies.
Poorly executed inventory counts can lead to issues in the future. Imagine starting the new year with resources tied up in obsolete SKUs or dealing with a critical component shortage. These situations can strain your resources and relationships with clients.
Initiate the inventory count by scheduling it at a time that minimizes disruptions to your manufacturing operations. This may involve conducting counts during non-peak production hours or on days when manufacturing activity is typically lower.
Utilize this opportunity to analyze your inventory trends for the upcoming year. Precision is paramount, so plan for spot checks and reconcile your physical count with your manufacturing records. Any count discrepancies should be thoroughly investigated and resolved to ensure inventory accuracy. This is where the inventory management features of your ERP or an integrated Warehouse Management System (WMS) software come into play.
Utilize WMS Software for Efficiency
Many ERP systems include basic inventory and warehouse management tools, but they are not sufficient for all businesses. Depending on your company’s requirements you might need your ERP’s advanced warehousing module or additional WMS software to enhance inventory visibility and control. WMS provides real-time data on stock levels, locations, and movement within the warehouse. This transparency allows companies to manage raw materials and finished products during day-to-day operations and physical inventory.
Custom manufacturing companies can also optimize their warehouse layout, implement efficient picking strategies, and automate inventory replenishment processes with a quality WMS solution. This not only reduces the risk of stockouts but also minimizes carrying costs associated with excess inventory. Additionally, WMS software improves order management, efficient fulfillment, and shipping processes.
Integration of ERP and WMS for Custom Manufacturing
ERP systems and WMS software each bring their unique advantages to the table to improve processes. However, integrating the two systems provides a more holistic solution for businesses that want to optimize operations. The seamless flow of information between ERP and WMS systems enables custom manufacturing businesses to synchronize operations like production, inventory, and financial processes. This leads to greater workflow efficiency.
An ERP will automatically tag the WMS system with the required components for a new order upon entry. It then initiates the production process. As production progresses, the WMS system updates the manufacturing ERP software in real time. Accounting can also track the financial impact automatically, not just when the process is completed and products are shipped.
This manufacturing ERP and WMS integration eliminates manual data entry errors. It also accelerates a company’s decision-making processes by providing a comprehensive view of the entire supply chain. As a result, custom manufacturers can respond swiftly to changing market conditions and optimize resource allocation. This allows them to efficiently deliver high-quality products to their customers on time.
Add Shipping for End-to-End Efficiency
All the advantages of integrated ERP and warehouse visibility can be further enhanced by the addition of a transportation management solution (TMS) or shipping software.
With the right software integration, custom manufacturing companies can provide accurate “promise by” dates at the time of ordering. Whether your products ship via common carriers as less-than-truckload (LTL), truckload, or regular freight or parcels, integrating shipping software can quickly generate pricing and delivery time options that enable you, your dealers, installers, or customers to make informed choices.
Frontier ERP offers both an advanced warehouse module equivalent to a standalone WMS in functionality as well as an integrated TMS for shipping. Companies that use this integrated approach save money and time by allowing the software to suggest from which locations and in how many cartons or pallets an order should ship.
2024 Forecast: The WMS and ERP Software Advantage
As make-to-order manufacturers prepare for 2024, it is crucial to adopt a forward-thinking approach. Through integration, custom manufacturing ERP software, WMS, and shipping software set the stage for proactive and strategic forecasting.
By leveraging system data insights, businesses can forecast market trends, identify areas for operational improvement, and fine-tune their production scheduling and planning processes. Moreover, the innovative collaboration streamlined by ERP, WMS, and TMS integration fosters an environment where teams can adapt swiftly to emerging opportunities and challenges.
As 2024 approaches, custom manufacturing businesses equipped with these advanced tools will navigate uncertainties with confidence. They then can position themselves as leaders in innovation, efficiency, and customer satisfaction.
While not exactly festive activities, closing financials, holiday production scheduling, and physical inventory are key duties at year’s end. However, those in the custom manufacturing industry can expedite their processes. The integration of ERP software for manufacturing with WMS and TMS software emerges as a powerful strategy, ensuring accuracy, efficiency, and visibility across the entire business. This ensures that custom manufacturing businesses stay agile, competitive, and well-prepared for whatever the future may hold.
Frontier software from Friedman Corporation is a leader in ERP for custom manufacturing businesses. For details or to schedule a Frontier ERP software demo, click here.