Complex components based on customer requirements, shortening product life cycles and growing competitive pressure from low-cost suppliers in the Far East means fabrication and assembly companies are operating in an environment dominated by technical innovators and cool calculators. Technical competence alone is not enough to compete in this demanding market. IT-supported ERP system and optimization of all operational processes is a prerequisite for sustainable success.
You’re a specialist in your production area - you should expect the same from your IT solution!
- Custom production
- Small series
- Large series
Industry 4.0 for Fabrication & AssemblyAfter the economic challenges of the past decade, the fabrication and assembly industry is experiencing renewed growth, bolstered by technical innovations, expanding market opportunities and growing product demand.
7 Steps to ERP SelectionManaging the selection and implementation of a new ERP system is a major undertaking for any organization, which is why abas has developed a clear and thorough 7-step guide that simplifies the selection process and helps you make an informed, confident decision.
The finishing touch: abas ERP for fabrication and assembly
The rise of outsourced F&A
Whether in the automotive industry, aerospace, electronics, equipment manufacturing or medical technology, dynamic markets are making complete in-house production increasingly difficult for original equipment manufacturers. The development of new technologies is too dynamic, and the investment in machinery and building up the necessary expertise are too high, and so many of the fabrication activities that have been done in-house before is now considered “non-core” and therefore outsourced. The demand for outsourced assembly and machining of turnkey components is therefore growing continuously across nearly all industry segments.
The advantages are obvious: external fabrication and assembly suppliers are experts in their respective niches, be it metal or plastic machining, welding, milling, turning, bonding, bending, kneading or soldering. Outsourcing selected production steps ties up significantly fewer resources in pre-production and reduces the need for storage and production space. Moreover, it’s a big win for the cash flow of the outsourcing company, who now doesn’t have their cash flow tied up in expensive assets like specialized fabrication machinery.
For fabricators and assembly companies, however, the efficiency use of all available resources and assets is a must for success in today’s hyper-competitive market. What are the keys to ongoing efficiency? Having full visibility into every aspect of your operations, from the production floor to the distribution warehouse. You need to seamlessly integrate and coordinate all your business activities, and be able to follow your data in real time. So when potential problems arise, such as production bottlenecks, you can identify them immediately and take prospective action to prevent or (at least) mitigate those risks. So if “information is power,” how can you gain this power? Consideration a specific ERP for Fabrication and Assembly companies, which offers you integration and visibility into you data and operations.
The fabrication and assembly growth market: opportunities and risks
The continuing trend towards fabrication and assembly offers excellent opportunities for specialized manufacturing facilities. However, it also requires a high level of process expertise and also means handling complex supply chains and product variants - with increasing time and cost pressures. The challenge: manufacturers are shifting more and more parts of the value chain - and therefore the business risk - to its components suppliers. In many areas, fabrication and assembly no longer just involve materials processing and assembly, but also product development, testing, quality assurance, just-in-sequence delivery and the provision of spare parts and repair services.
To manage this increasing risk, you need integration and visibility. You’re doing more as a fabrication supplier, wearing more hats, which is potentially great for profitability. But doing more also carries more risks. So if something goes wrong anywhere, amid all the complex activities you’re performing, your supplier will hold you liable for the loss. If your activities negatively impact your business partner’s business, such as (hypothetically) when they install one of your components into an automobile and the component doesn’t work, the level of loss of the auto manufacturer could be in the hundreds of millions of dollars. And guess what? That automaker/business partner will come knocking on your door: (1) to fix the problem immediately and (2) to recover their financial losses. Now if you want to avoid that nightmarish scenario as a fabricator, consider a specific ERP for Fabrication and Assembly companies. It is the best insurance policy you can have.
Everything from one source - in a single system
Only manufacturing companies that are able to keep up with their customers’ speed of innovation and ensure the necessary quality and delivery reliability are well positioned for success in fabrication and assembly. It’s no less important to maintain competitive pricing in an international environment. And when it comes to keeping pace with cutting-edge industrial innovations, smart automation and digitization should not be confined to the production area alone. You’ll want to work “smart,” with automation that allows you to access and leverage your relevant data, all across your business, from the factory to the back-office and beyond. An industry-specific ERP for Fabrication and Assembly companies is essential for companies seeking to improve the efficiency and visibility of all processes, from prototype construction and materials management to the after sales service.
The key is to embrace disruption and change early. Don't react to it decades later. You can't fight innovation.
Integrated product development
Modern fabrication and assembly companies are much more than just contract manufacturers - they are involved more closely in integrated product development for their customers and manage the design data and parts lists for numerous variants throughout the entire product life cycle. Prerequisites for the profitability of these development services are highly efficient product lifecycle management and a visible cost structure. Take in consideration a specific ERP for Fabrication and Assembly companies, which can help you seamlessly receive design data from your business partners and then work with that data to generate parts lists, cost projections, and fast quotes for your customers. If you do these activities manually, maybe through Excel spreadsheets, you’ll not only be much slower and imprecise, but will also tie up your production people with boring, manual tasks that an ERP system simply does better and faster. Why waste valuable resources of time and people?
Automated materials management
A complex supply chain of purchased parts, rising raw material prices and often lengthy procurement times mean predictive material planning is decisive for successful needs-based and cost-effective procurement. Again, an ERP system for Fabrication and Assembly enables important steps in your production process to happen automatically, giving you the agility and precision (especially with cost estimates) that you need and that keeps customers satisfied.
Compared to industrial machinery engineering, fabrication and assembly companies still lag behind regarding Industry 4.0 and Smart Factory. Throughput times can only be sufficiently reduced by close integration of the ERP for Fabrication and Assembly companies, PPS, machines and workpieces. This makes it possible to meet the required delivery deadlines despite numerous variants and different types of manufacturing. We all know that more technologies are coming into the fabrication space, from “smart” manufacturing to metal 3D printing and more. When you have an ERP system for Fabrication and Assembly you can seamlessly absorb and implement new technologies, effectively “future-proofing” your operations.
For many customers, fabrication and assembly companies need to implement flexible requirements for individual industry sectors, for example, logistical special processes in the automotive industry or QA and compliance standards in high-tech electronics. When you have a flexible ERP system, you can work flexibly in meeting customer demands. When you change one variant in one place, your entire ERP system will adjust the entire process accordingly, allowing you to work fast and with agility, exactly what your customers increasingly demand of you.
Strategic corporate management
Which clients and components are really worthwhile? Where does the hidden untapped potential for efficiency lie? Simultaneous costing, current price tables and BI tools support bid preparation and cost control, and identify sales drivers and factors that inhibit returns in just one simple step. You will literally be able to see opportunities in the data, and also play around with multiple scenarios and cost out each one.
Future-oriented fabrication and assembly companies network consistently, both internally between divisions and subsidiaries and also with customers and suppliers. Modern ERP for Fabrication and Assembly companies enable the fast and flexible exchange of information via mobile apps and data transmission standards such as EDI. You are fully connected internally and with outside business partners.
abas ERP software functions designed for Fabrication and Assembly
Successful fabrication and assembly companies are all around professionals
An industry-specific ERP for Fabrication and Assembly strengthens the companies in their core competency of production, but also by providing all the necessary features for using customer-oriented services to create a competitive portfolio - quickly, flexibly and profitably.
Get both your products and processes in shape!
The most important ERP functions in abas ERP for fabrication and assembly include:
- Sales planning with planned sales orders to support scheduling and procurement
- Variant management: Standard, alternative or supplemental product structures
- Lot/Serial number management
- Lot-related documentation
- Preliminary, concurrent and final costing: Precise costing and permanent comparison of preliminary and final costing at the project and customer level
- Capacity planning
- Extended work bench/External processing
- Multiple machine operation by team members
- Logistics / Warehouse: Precise mapping of warehouse structure, configurable reservation scenarios, simple re-reservations, path-optimized picking lists, preparatory shipping planning
- Stock valuation using various valuation methods
- Key figures and evaluations for fabrication and assembly, for example, ABC analyses; incoming and backlogged sales orders as well as the production utilization rate; stock levels, coverage and turnover; production efficiency (processing times, minimized setup, machine disruptions, repair frequency and costs); purchasing efficiency (price development, batch sizes, procurements costs, vendor reclamations); evaluation of innovation efficiency (P+P costs vs. revenue with new products, new customers, cost savings)
- Mobile applications, for example: sales, purchasing, service, warehouse
- Take in consideration a specific ERP for Fabrication and Assembly companies.
abas (Hidden) Champion: WMH Group
abas ERP customer, WMH Group, is known for quality. They deliver reliable solutions and first-class products made from aluminum to a wide range of industries including mechanical engineering and aerospace: They produce aluminum sheets, plates, profiles, tubes and rods made from off-the-shelf and rare alloys.
ERP for fabrication and assembly companies: advantages in series
Many industrial machinery manufacturers, electronics suppliers and specialist manufacturing companies have recognized the future potential of fabrication and assembly and are using their niche expertise to establish themselves as a fabrication and assembly company - either as a second area of activity or as part of strategic realignment. Often the existing ERP for Fabrication and Assembly companies is unable to cope with the additional requirements of fabrication and assembly - classic manufacturing software is rarely adequate. The need to implement Industry 4.0 has also increased the specifications and the ERP landscape in fabrication and assembly is consequently undergoing major changes.
Delivering the required speed and range of services at competitive prices without any concessions in terms of quality or profitability will only succeed with an ERP for Fabrication and Assembly companies that maps, automates and networks all processes throughout the company. But what criteria and features play a role when selecting a modern IT solution for fabrication and assembly suppliers?
The automotive industry in particular sets high standards for their fabrication and assembly suppliers’ logistical processes. To avoid expensive extra trips or contractual penalties, the smooth flow of materials is a top priority. For automotive components, the ERP system must therefore support the required workflows of the OEM (just-in-time/just-in-sequence), as well as customer-specific logistics concepts (string of pearls/NLK). Take in consideration a specific ERP for Fabrication and Assembly companies.
Whether 10 or 1000 individual components: a mix of in-house production, purchased parts and customer components is typical for bills of material in fabrication and assembly. As a result, it is important to use business software that controls the workflows of the extended workbench and manages consignment stock.
Many fabrication and assembly companies are intensively involved in development and manage increasing model diversity. The integration of CAD and PLM data in the ERP for Fabrication and Assembly companies ensures that calculations, parts lists and production schedules are based on the latest design data and that design changes are visible and available to all departments.
An industry-specific ERP system for fabrication and assembly includes machine utilization, shift schedules, delivery dates and stock levels in the detailed planning. It automatically delivers parts list changes to production and dynamically customizes order sequences.
Quality management and compliance
OEMs are increasingly transferring quality assurance to their fabrication and assembly suppliers - as this is very challenging for most medium-sized providers in a situation where there is an increasing number of quality and legal requirements and environmental guidelines. Complete test documentation and integrated batch and serial number management enable the easy traceability of all parts in the event of warranty claims or repairs. The visible traceability of material specifications is simplified by an industry-specific ERP for Fabrication and Assembly companies.
High degree of automation
Fabrication and assembly suppliers are responsible for their customers’ delivery reliability. ERP systems in fabrication and assembly must exploit all the efficiency potential and, as far as possible, predict and minimize the manual effort involved in materials management and production through automated processes, such as order proposals and invitations to tender.
Scalability and internationalization
Medium-sized fabrication and assembly suppliers are increasingly managing complex international networks of partners and suppliers or establishing subsidiaries abroad. A multi-site enabled ERP system offers the advantage of easy integration of company subsidiaries, suppliers and partners.
Fabrication and assembly companies must ensure smooth data exchange with customers and suppliers and map sector-specific workflows - ERP solutions with open interfaces and stable connectors are ideal for this.
The path to the smart factory inevitably leads to the cloud: partners, machines and workpieces must be networked via a common technology platform that can manage the growing volume of data. ERP for fabrication and assembly should also be available as an SaaS model.
Everything fits, but you’re still unsure?
Then think about which software vendor you trust to accompany your business on the path to digital transformation. Because only a development partner that understands the challenges of fabrication and assembly can provide tailor-made solutions in the ERP system.