This checklist will help you assess current business systems and profitability, and provide guidance on how to improve both

Understanding the profitability of your business is fundamental to making strategic decisions that help grow your business. But how do you accurately assess profitability? Do your current systems and processes even provide you with that information? How would manufacturing ERP software assist?

This checklist will help you understand how to measure true profitability, and the steps you need to take if the relevant information is not readily available.

Data visibility

In order to make effective strategic decisions, you need data, and the more data you have available, the more informed those decisions will be. To accurately assess profitability you must be able to see information about every process and operation across the shop floor and beyond.

Action point:
Audit your current data collection systems to assess the ease with which you can view information. How many systems do you need to collate information from to get an accurate understanding of performance and profitability?

Data accuracy

The quality of your data will affect the quality of the decisions and plans you make using it. If your current management systems rely on manually copying information between screens and spreadsheets there is an increased risk of errors and inaccuracies creeping in. Every typo or inaccurate data import has implications for your planning. And the longer these mistakes go undetected, the greater the cost.

Action point:
Take a look at how information moves around your business to see where current systems are failing you in terms of data accuracy. How many different systems are in play? How is information moved between them? How often does inaccurate data enter the system?

Bottlenecks and delays

 Every production line experiences inefficiencies and delays, but these bottlenecks can be managed or resolved – assuming you can see where the problems lie. Again, information is crucial to spotting these problems – but if you can't find the data, you can’t fix the problems.

Action point:
Check your systems and assess the granularity of performance data. Do you have enough information available to spot bottlenecks quickly – and to fix them?

Supply chain visibility and relationships

The performance of your suppliers is almost as important as your own shop floor. Suppliers who fail to meet expectations have a direct effect on output – and, therefore, profitability. But can you accurately identify the under-performers? And calculate the effect of their performance on your profit margins?

Action point:
Check your current manual systems and whether you can identify those suppliers who fall short on expectations.

Optimising the back office

The greatest efficiencies and cost-savings are realised on the shop floor – but back-office operations also offer opportunities to reduce operational costs. Time spent collecting and collating data is time that could be spent on other, more productive tasks.

Action point:
Try and quantify how much time is spent chasing down information every week/month by employees working in the back office. This will help you calculate the potential savings made available by optimising data-driven operations beyond the shop floor.

Shop-floor data capture

The ability to capture data in real time on the shop-floor will dramatically increase the accuracy of your records. And if you can capture data on the move, you can display it too. Mobile technology empowers your workers to increase productivity and the quality of their output.

Action point:
Check whether your current systems and processes allow you to capture data on the shop-floor. If it doesn’t, your information will never be truly up-to-date, and there is an increased risk of inaccuracies creeping in.

Seek assistance

As you work through this checklist it will quickly become clear that a manufacturing ERP system has much to offer. Specifically designed to centralise and consolidate data, ERP allows you to view performance at every touchpoint across the shop floor and beyond. You can even assess and manage supplier relationships from the same platform.

But to avoid the problems that cause many ERP projects to end failure, you’ll need to confirm that the product vendor is suitably engaged with their customers. Otherwise, you will always struggle to realise maximum ROI from your software investment.