Although there is growth in the furniture and home furnishings sector, it is difficult to escape the rising costs of raw materials, energy and logistics. For furniture companies to maximise their profit margins, a re-engineering of core business processes with ERP software can be a worthwhile exercise. Sales, planning and production, warehousing, and distribution can all be enhanced to improve your competitive advantage.
Implementing product configuration software
A product configurator is a computer-aided manufacturing system that can be used to simplify the process of creating a custom product. The tool will enable customisation based on available design options, so salespeople can create accurate quotes based on the options the customer wants. For example, a customer picks a sofa style, then a selection of fabric is shown as options. This is called a guided customisation flow and will allow you to collect data on what the customer wants whilst simultaneously helping you create a bill-of-materials for the factory floor and obtain an informed lead time.
Taking this approach is more customer-centric, and will help you reap the benefits of lean principles as you will only be manufacturing products that have been ordered, minimising the waste and inefficiencies that could come from building furniture with little demand. The optimisation of processes is an essential component in running an efficient business and maximising profits, and product configuration software is a powerful tool to help achieve this.
The value of ERP software in helping promote lean principles
Enterprise Resource Planning (ERP) software contains a range of features and tools that can further streamline your order processing and reduce waste. It can improve your Material Requirements Planning by managing the inventory processes and the materials required for outstanding orders. All data can be tracked and processed to minimise all time and material inefficiencies, grouping similar orders into the same bracket and operating different purchasing techniques.
Efficient stock management can also help optimise manufacturing processes, providing information on materials that are available in real-time. And material costs can be factored into the system, allowing accurate calculations of profit margins. Further to this, the varying combinations of materials inherent in custom orders can be more accurately met by combining stock management tools with the aforementioned product configuration software.
Essentially, a furniture manufacturer will be able to create and process bespoke orders and automatically refer them to the available materials in order to save time and minimise the risk of waste caused by inaccuracies. All of this works towards the objectives of maximising profit margins in every area of business.
The importance of a lean manufacturing environment
Using software and hardware solutions that work to apply lean principles to your processes is important for so many reasons. It will enable you to optimise the supply chain and processing of custom orders to minimise waste with a holistic approach, which will immediately increase your profit margins. But saving on waste also helps to decrease your company's carbon footprint; a goal that is looked upon favourably by companies, agencies and customers in the modern world.
WinMan ERP is a comprehensive all-in-one system that can enable you to implement the strategies discussed in this article from a centralised system. It is a powerful tool, and WinMan can support you in setting up the software in the appropriate way for your business, and deliver ongoing support as your business evolves and grows down the line.