Manufacturing and Job Shop

Untangle Work Order System Processes with Essential Growth Components

Written by Andi Conti | Jun 27, 2013 5:00:00 AM

The role of work orders is to initiate certain manufacturing/maintenance tasks, clarifying how and when a certain job must be done. Since the work orders corresponding to particular maintenance assignments are usually numerous, using obsolete work order tracking systems is a bad idea because they’re unable to perform the tasks that an advanced system typically completes. This may negatively impact specific areas of your business, including labor usage, dispatch times, and service quality, reducing your revenue, working capital, and bottom line, implicitly. Considering this, none can deny the symbiotic relationship that exists between a work order system and the profit margin of a company.

Effects of Using a Work Order Tracking System

Although maintenance activities vary in time, scope, and skill required, most professionals focus on three main aspects when performing certain tasks: operation optimization, waste reduction, and personnel safety. Fortunately, using a work order tracking system allows you to go beyond all these by improving different aspects of your business, including your bottom line. To understand the impact this system has on your company’s finances, it’s vital to assess its stages together with its areas of influence.

  • Work Orders: Work orders are the base of any manufacturing/maintenance process. Defining an order received from a client, a work order is reviewed and scheduled before being executed. By opting for a modern work order system in which an ERP system, such as Microsoft Dynamics AX, is used to facilitate order assignment, tracking, and reporting, you can respond to requests and coordinate tasks efficiently. This leads to better project management, positively affecting your working capital and profit margin.
  • Scheduling: Scheduling is very important because it directly influences the inventory/purchasing stage, on one side, and the execution stage, on the other. During this stage, you can select the systems and tools your workers must use to achieve the expected outcomes; solicit bids from outside contractors; check your stock; and order the materials and equipment pieces you need in order to complete particular maintenance tasks. If you use an advanced work order tracking system, you can reduce the costs involved in a maintenance project by strictly controlling bids, stocks, and purchases.  For example, many end-users have leveraged standard AX functionalities to achieve this without having to indulge in additional products and services.  Keeping costs down has a rippling effect on your working capital, increasing it continuously.
  • Inventory/Purchasing Management: A significant part of your working capital is invested in stocks. This means that increasing inventory turns will free up a lot of cash. But, how are you going to do this? Well, one thing you can do is to get a work order system that calculates and centralizes the materials and equipment you need in order to perform certain maintenance jobs. This way, you can minimize purchases and focus on using your stock items to make more working capital available for new projects.
  • Execution: The execution stage consists in performing a series of tasks required to complete a work order. This stage exists for one main reason; namely, to enable you to find the most appropriate ways to coordinate people and resources in order to reduce execution time. Short execution times lead to profit growth.
  • Closing: This stage requires you to finalize all the activities partially performed across certain maintenance process groups in the factory. During the closing stage, the client accepts the work, pays for it, and ends the contract, if applicable. Getting paid for the maintenance tasks you’ve performed indirectly means that you’ll see an increase in revenue. Although revenue growth is beneficial to your business, a company whose income increases continuously needs high levels of cash flow to operate efficiently. Thus, constant revenue growth is possible only if you ensure additional working capital.
  • Cost Analysis: The work order tracking system allows you to assign costs to each operation performed during the maintenance process. Besides assigning costs, you can use this system to run a variety of analyses, such as cost-benefit analysis, investment analysis, cost-trend analysis, milestone-trend analysis, and target-actual comparison. 

An advanced work order system is also able to simulate calculations. By using this function together with many other features of this system, you can create a functional strategy that will improve not only individual maintenance tasks, but also the overall financial situation of your company.

 

Tags: Microsoft Dynamics AX, Manufacturing ERP Software, ERP Software