manufacturing industry kpis that matter - oasis...

SL Associates

Manufacturing Companies Run Better on NetSuite.

Manufacturing Industry KPIs that Matter

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C SL Associates. All rights reserved.

SL Associates

Improved Results from Businesses Like Yours

C SL Associates. All rights reserved. 1

Business Visibility

360o Visibility & Actionable Insight

Revenue Recognition Management

Improved 45% - 65%

Time required for Compliance Support

Decreased 25% - 45%

Audit Completion Time

Reduced 30% - 40%

Financial Management

Reporting Time and Resources

Reduction 70% - 90%

Time to Close Financial Books

Reduced 75% - 90%

Accounting Staff Productivity

Increased 30% - 50%

General Ledger Consolidation Time

Reduction 75% - 95%

KPI improvements are estimates based on discussions with NetSuite customers

Increased 70% - 90%


SL Associates



Manufacturing Visibility and Performance

Staff Utilization

Improved 10% - 25%

Inventory Carrying Costs as % of Revenues Reduced 2% - 5%

Obsolete Inventory Carrying Costs

Reduced 60% - 80%


Payroll Processing Costs Reduced 50% - 75%

Production Efficiency

Improved 50% - 80%


SL Associates



IT Management

IT Support Resource Costs Reduced 50% - 70%

Cost to Purchase and Maintain Servers

Reduced 100%

Business Continuity/Disaster Recovery Costs

Reduced 35% - 55%


Sales and Marketing

Sales Pipeline and Productivity Improved 40% - 60%

Order Processing Efficiency

Improved 45% - 75%

Cloud-Based Business Solutions Suite Delivers Key Performance Improvements Real-time business visibility and end-to-end business management

SL Associates

Many firms – including those in the manufacturing sector – have achieved more efficient and agile

business operations by using cloud-based ERP.

Executive Summary

In the popular mind, manufacturing companies are old-school businesses, the polar opposites of high-tech software and services firms.

In reality, manufacturing operations are among the most sophisticated users of advanced IT solutions. Factory floors are highly

automated and precisely monitored, and they are fed by supply chains and inventories that must be coordinated and optimized. Once

produced, manufactured goods must be shipped and tracked through often-complex distribution and retail networks, and a product’s

quality must be measured and ensured from its creation on the factory floor to its performance at the end customer.

Given the breadth and diversity of their operations, manufacturers must be able to identify and measure key performance indicators

(KPIs) for everything from their financial operations to their factory-floor and shipping efficiencies. By doing so, they have a baseline on

which to improve and track their critical business processes and to achieve higher levels of business effectiveness and success.



• Sourcing: Manufacturers must track parts and materials availability, costs and quality from both primary and secondary suppliers.

• Factory: Manufacturers must measure equipment, as well as worker, productivity and efficiency, production bottlenecks, inventory turns, and many other variables.

• Inventory: Inventory levels must be managed and balanced based on orders and forecasts, a particularly difficult task for lean/just-in-time manufacturing operations.

• Orders and Shipping: Orders for goods must be closely managed and matched with inventories and production, goods must be efficiently packaged and shipped.

• Customers: Manufacturers must ensure their customers, be they distributors or end buyers, are satisfied with the finished products they receive.

Addressing Manufacturing Industry Challenges Aligning business operations to meet these challenges

SL Associates

Average Deal Size Reduction in DSOs

External Systems Customers

CEO CFO SRP ERP

PROJECT MANAGEMENT

WAREHOUSE MANAGEMENT

CORE BUSINESS

CUSTOMER MANAEMENT Sales Rep/ Manager

Shipping Manager ORDER MANAGEMENT

INVENTORY GLOBAL FINANCIAL MANAGEMENT RESOURCE MANAGEMENT

MANAGEMENT

BILLING MANAGEMENT

REVENUE MANAGEMENT

TIME & EXPENSE MANUFACTURING

Ecommerce Manager

Support Manager SUPPLY CHAIN

MANAGEMENT PROJECT ACCOUNTING

Vendors Partners

Unlimited Expansion Revenue Growth

Intelligent Order Orchestration


Operational Challenges

• Financial: In addition to standard financial metrics, such as time to close the books and overall profitability, manufacturers must track everything from cost of materials to the value streams of individual production units.

• Reporting: Workers ranging from the finance team to factory-floor supervisors and workers need accurate and, often, real-time reports spanning the full range of relevant operations.

Supply Chain Challenges


• Siloed applications and data provided an incomplete and point in time based view of business

• Analytics solutions not integrated

• Not possible to quickly assess all aspects of a business in response to opportunities and challenges due to siloed applications and data

• Lack of support for budgeting, performance management and forecasting

• Excel-based, non-integrated system; manually intensive

• Significantly improved real-time visibility into all aspects of business, allowing faster strategic decision making

• Real-time visibility into all aspects of business

• Easy to spot inconsistencies to find out root cause through drill-downs

Business Visibility Business value for company management

SL Associates

Before NetSuite With NetSuite



Increased in 360o visibility and knowledge of operations

70%- 90%

Improved business agility

Improved budgeting, financial planning and forecasting

• Agility from planning to execution

• Support better decisions, improve cost control, and increase the profitability of products, customers and channels

• Streamline the bottom-up and top-down financial and operational planning process

• Ability to create multiple budgets

• Support for quarterly reviews and tracking of variance


• Excessive time required to allocate revenues correctly

• Lost revenues due to missed billings

• Error prone Excel spreadsheet-based operations

• Efficiency issues due to lack of automation

• Difficulties in getting reports in a timely manner

• Customer quote systems not integrated with accounting system

• Difficulties in spotting missed contract renewals due to fragmented data

• Significant increase in accuracy of revenue recognition

• Identify missed opportunities

• Convert active contracts into revenue

• Enable audits and review of variances and risks of customer revenues

• Identify and remedy gaps

• Better management of customer contracts

• Integrated customer facing and back-end accounting systems make the process fast and accurate

• More efficient processes save time and costs

Financial Management (1 of 3) Business value for revenue analysis and management

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Improved revenue recognition

45% - 65%

Increased recurring revenue

Faster quote-to-cash processes


• Relevant information not readily available or needs to be pulled from multiple sources

• Data analysis difficult or impossible

• No central repository for the information required to support audits

• Difficulties in getting reports in a timely manner, often days after they are needed

• IT required to develop custom reports

• Real-time availability of required financial and operational reports

• Availability of accurate, detailed and actionable information to support compliance needs

• Since all the information required for audit is available in NetSuite, companies see significant reduction in audit time required

• Report access and delivery when needed

• Real-time drill down to the lowest level of detail

• Users able to build their own custom reports

Financial Management (2 of 3) Business value for financial reporting

SL Associates




Decreased in time required for compliance support

25% - 45%

Reduced in audit time

30% - 40%

Reduction in reporting time and resources by

70% - 90%


• Extensive time spent on reconciliations, especially when multi-division, multi-region and multi-currency

• Accounting teams overwhelmed

• Almost no time for analysis

• Inefficiencies as a result of manual processes

• Use of spreadsheet based accounting

• Difficulties in consolidation of data from multiple entries

• Difficulty in consolidation of accounts in different geographic regions with multiple currencies and tax structures

• Increased efficiency through integrated reconciliations and reporting

• Reducing need for large accounting staff

• Better utilization of accounting to support up to 4 times more A/R and A/P transactions

• Real-time consolidation of data from multiple entries, regions and currencies

• Support for real-time consolidation of financial information in multiple currencies

• Helps reduce time to close books on a monthly and yearly basis

Financial Management (3 of 3) Business value for accounting department

SL Associates




Reduced time to close the financial books

75% - 90%

Increased in accounting staff productivity

30% - 50%

Reduction in time for general ledger consolidation

75% - 95%

• Earlier availability of financial results through faster period-end processes and more accurate reconciliations

• Ability to do monthly reconciliations instead of yearly

• More time to spend on analysis


• Lack of visibility into inventory of parts

• Order for an assembly immediately launches the work order irrespective of order delivery time due to separate systems

• Inefficiencies as a result of manual processes and resource utilization

• Manual or spreadsheet-based inventory and assembly tracking

• Lack of visibility into inventory of parts

• No visibility into obsolete part inventory

• Integrated NetSuite solution with inventory data and customer data make this much easier to track

• Order for an assembly synchronized with inventory of parts and delivery timeframe

• Better tracking of resource and capacity utilization due to real-time tracking of production

• Resource scheduling synchronized with assembly and delivery timeframe

• Complete visibility into all inventory parts required for assembly of work-orders to reduce stock-outs and production delays

• Easy availability of data to review obsolete inventory to eliminate carrying costs

Manufacturing Visibility and Performance (1 of 2) Business value for manufacturing operations support

SL Associates




Improved staffing utilization due to automation

10% - 25%

Reduced inventory carrying costs as percentage of revenue

2% - 5%

Reduced inventory efficiency and obsolete inventory carrying costs

60% - 80%


• Lack of real-time visibility into inventory of parts

• Information and analytics on demand variations not easily available in a timely manner

• Inefficiencies as a result of separate applications and related errors

• Additional time and resources to process payroll information and export data to separate application

• Siloed applications and data provided an incomplete view of manufacturing production planning

• Integrated NetSuite solution with customer order tracking and inventory data reduce backorders during peak demand periods

• Integrated NetSuite solution with payroll provides payroll processing efficiencies

• Complete visibility into all process enables involvement of the right people

• Integrated solution enables identification of problem areas and develop plan for corrective actions

Manufacturing Visibility and Performance (2 of 2) Business value for manufacturing operations support

SL Associates




Reduced payroll processing costs

50% - 75%

Improved production efficiency and lead times

50% - 80%

Improved support for continuous process improvements


• Sales-relevant information not readily available

• Limited sales tracking and management support

• Lack of integrated online sales tools

• Lack of integrated solution and data lead to inefficiencies

• Lack of EDI support for document distribution and receiving orders

• Real-time visibility into key customer metrics and purchase history

• Better management and categorization of leads by opportunity

• Support for multi-channel sales

• Increase in sales pipeline by tracking leads and opportunities by using CRM

• Monitor effectiveness of individual sales reps

• Integrated customer information, inventory and order processes reduce errors

Sales and Marketing Business value for integrated sales and marketing

SL Associates




Increased capacity of customer cross-sell and upsell

Improved

Improved order process efficiency

45% - 75%

sales pipeline and productivity

40% - 60%


IT Management and Resources Business value for company operations

SL Associates




Reduction in number of IT support people, IT cost savings of

50% - 70%

Eliminated the need and cost to purchase and maintain servers

100%

Reduction in need for business continuity / disaster recovery solution

35% - 55%

• IT resources needed to implement and maintain ERP solutions

• IT resources needed to install and maintain IT hardware

• Capital expenditure required to acquire and maintain servers for on-premises ERP application

• IT resources and infrastructure needed to support business continuity/disaster recovery

• Implementation is complex and costly

• No need for IT capital expenses as NetSuite is a cloud delivered solution

• Business continuity/disaster recovery are a significant benefit of the NetSuite SaaS solution

• NetSuite has redundant data centers to support this at no additional cost to customers

• Cloud-based solutions minimize the need for internal IT staff to support ERP application

• Faster to implement and earlier productive use of ERP solutions

• Reduced need for security, QA resources and database manipulations

manufacturing industry kpis that matter - oasis...

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