Apps in the factory: how apps are improving the manufacturing process
The UK manufacturing sector will play a vital role in ensuring that the economy remains robust after we leave the European Union.
At present it accounts for 11% of GVA and nearly half of UK exports but expectations are that it must grow further driven by innovations and product quality.
Technological advancements will be at its core from 3D printing to smart AI powered automation but increasingly the use of mobile apps linking the factory floor with management can also help improve efficiencies in areas such as inventory and order management.
Guy Earnshaw, Senior Solutions Consultant at app aggregator BlueHub helps small and medium sized firms including manufacturers make the switch away from Sage and Excel systems to less costly cloud-based accounting products such as Xero or Quick Books.
It then recommends to its clients which stock/order management add-on apps such as Unleashed or Cin7 will best integrate with these accounting systems and suit their business model.
‘There are 27 different inventory management and manufacturing apps that integrate with Xero. Out of that there are around 6 or 7 which are suitable for UK firms,’ he says. ‘With inventory only apps manufacturers can have visibility over where their stock is across third party providers, their components, cost and stock availability, traceability and bill of materials. Some bespoke manufacturers can also take the spec of their products, enter their requirements into the app and then have it produce bill of materials data which gets pushed into the inventory system.’
Cin7’s app provides manufacturers with precise cost of goods sold taking into account freight, duty and landed costs. It can also recalculate cost of goods sold for a sales order if landed costs change and posts it to the same period as the sales order.
It can also allocate stock according to the kind of customer being sold to, transfer stock to where it sells best and plan purchases based on historical trends.
Unleashed says it provides a centralised location for managing Bills of Materials and keeps track of all assembled products as well as the quantity of components required for production.
It helps manufacturers get an accurate finished goods cost and boosts production planning such as allocating stock for future assemblies.
With both apps data can be exported and integrated with accounting systems like Xero.
These developments can seem a step too far for some manufacturers who Stephen Jones, sales leader at Unleashed says have not been as quick to embrace digital as other sectors.
'They have been slight laggards in this, but manufacturing is a complex process. However, having providers such as ourselves working with accountants in manufacturers to create a comprehensive support app network is the way to go to create better value,' he says. 'With Unleashed operational and production staff on the factory floor can use their mobiles or laptops to input real-time information and data as product moves through various processes. Management and accountants above these worker bees in their offices can track work in progress, cost anomalies, update price points and create audit trails. They can make clearer, consistent and quicker decisions.'
From an accounting perspective the inventory apps can generate every sales and purchase invoice for stock and have that information moved automatically into the accounting system. “For any given day you should be able to know the exact stock position of that business without regular stock-takes,” says Earnshaw. “They also send journal entries through to Xero so if you are building a table it is moved from inventory into work in progress, then finished and cost of goods sold with no manual effort required.”
Going forward Earnshaw sees the apps increasingly working with smart machines. ‘They will be able to feedback information to management such as exactly what stock has just been produced and used. We will continue to see more connection to machines recording actuals such as cost and time to produce. It won’t have to be typed in manually anymore,’ says Earnshaw.
Jones agrees: ‘We have to keep finding ways of interfacing directly with Internet of Things hardware devices on the factory floor. We will be looking at more scanning functions and RFID. You see that in the enterprise software space and we are trying to bring that power to a level where the average SME can afford to take it on.’
The views expressed are the author’s and not ICAEW’s.