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The furniture manufacturing sector in India is far from achieving its true potential. The main reasons are that the industry is heavily unorganized and grossly underdeveloped. The industry focuses too much on handmade products and shies away from using the best quality tools and techniques. With modern technology, management methods, and machinery, domestic demand and exports are rising. The Indian furniture manufacturing industry is going through a golden period.
An ERP for furniture manufacturing is a software bundle that provides all these functionalities. Let’s go through them one by one.
Challenges in the furniture manufacturing industry
Like any other industry, the furniture manufacturing industry is full of challenges. From management and manufacturing to technology and support services, problems are many. Companies require access to capital and top-notch technology to solve them, but unfortunately, these things aren’t available to everyone.
The following are the management challenges that the furniture manufacturing market is facing:
1. Planning problems
There is no proper planning and management in the furniture manufacturing market. Managers either cannot create blueprints and work-plans, or they ignore it. The industry lacks step-by-step operational processes that cause widespread mismanagement, which ultimately decreases the final output. There are high incidences of backlog orders that cause customers to lose trust in the company. Since there is no efficient process for recording the inflow of raw materials, companies usually have a large unused stock kept in the inventory. Many furniture companies don’t have a warehouse to store finished products leading to their wear and tear.
2. Lack of reporting and information systems
Furniture companies lack a database to store business-critical information. They store inaccurate or outdated information that harms the business in the long run. The data sheets aren’t updated regularly and are littered with errors. The available data is rarely used while decision-making and for conducting market analysis. Obsolete data-analysis techniques are used for finding solutions and assessing results. There is a communication gap between managers and their subordinates. The organization lacks strict policies to monitor the workflow and doesn’t know how to react against competitors.
Also Read: ERP for the Furniture Industry
3. Presence of Information Silos
Information silos are invisible walls that restrict the flow of information from one department to another. Since business-critical data cannot flow freely, the organization fails to work as a cohesive unit. It leads to poor communication and coordination that cause delays and the inability to meet manufacturing goals.
4. Organizations structures aren’t defined
Employees are, more often than not, unaware of whom they have to report. In most cases, there exists no official hierarchy that creates disorganization. Duties aren’t’ defined, and employees’ skills are either obsolete or not updated. There is no human resource department to listen to employees’ pleas. Workshops and employee development programs are out of the syllabus. The company lacks a solid expansion strategy. It neither has the data nor the skills to forecast the future. Moreover, the organization doesn’t monitor the new developments in the industry and fails to keep a tab on its competitors.
Now we will take an in-depth look at the manufacturing challenges that the furniture manufacturing market is facing:
1. No manufacturing planning and control mechanism exists
Furniture MSMEs don’t have a fully developed manufacturing planning and control mechanism. They lack the technical expertise to conduct manufacturing operations efficiently — Implementing technology, decrease cost, and build a top-notch quality assurance system. They also find it challenging to keep raw material usage low.
2. High wastage of resources
Furniture companies lack the technical know-how to improve their resource utilization. They produce a lot of waste in the manufacturing process and don’t have a well-defined strategy to effectively use their workforce. Most furniture companies are either under-equipped or lack the best-quality tools for performing their operations. There is also a considerable fluctuation in quality in any two random lots.
3. Low production effectiveness
Work inefficiencies mentioned in the above points often cause a significant difference between the planned cost and the actual cost. Numerous furniture MSMEs have inadequate production capacity due to which they don’t get contracts from multinational corporations. Moreover, they have poor equipment arrangements, insufficient space, and lack a mechanism to eliminate redundant work.
The recent COVID-19 outbreak has further exacerbated the situation. Funds have dried up, the customer base has shrunk, government regulations are tightening, and global trade is at an all-time low. Furniture companies will have to bring a significant transformation in the way they function. They need to adopt innovative work strategies and technology to solve organizational challenges and improve their efficiency.
1. It provides a 360-degree perspective of your business
A furniture ERP software keeps a tab on different activities inside the company, from manufacturing and finance to inventory and supply chain. It collects, stores, and shares business-critical information with the relevant stakeholders. This enables each department to work together as a cohesive unit. It also has dashboards that provide relevant summaries and essential data to the upper management, thereby helping them make better decisions.
2. It improves inventory management
Every furniture manufacturer has to deal with tons of inventory daily. It’s challenging to monitor the incoming raw materials and the outgoing finished products with manual work processes. ERP for furniture manufacturing software monitors the influx and outflux of materials 24/7. It provides an added advantage of automatically ordering raw materials as soon as the inventory falls below the set threshold. It records multiple data points regarding the stock — including characteristics, attributes, dimensions, material, location, quantity, quality, etc.
Also Read: Inventory Management – A step closer to better Customer Relations
3. It makes the supply chain management even better
The furniture manufacturing industry demands top-notch products at the lowest possible prices. To reduce the final cost, they import cheap raw materials from foreign countries. The furniture ERP software takes care of all the complexities — contracts, time, government regulations, etc. It also allows companies to manage multiple warehouses across various locations. This process eliminates duplicate work as employees don’t need to fill various Excel sheets.
4. It brings quality control
High-quality materials are in demand in the market. Furniture ERP software helps businesses to run periodic quality checks to ensure all processes are running efficiently. If the ERP detects a defective product, it brings it to the notice of the concerned authority.
5. It makes the production process smooth
The furniture ERP software smoothens the production process. It efficiently handles Bills of Materials (BoM), work orders, and routing procedures. It also automates various tasks such as speeding up the production cycle, creating work orders and storing work-related information. It also uses a well-structured barcoding system that provides real-time data on the raw materials’ quantity and their location in the warehouse.
6. Application in the cabinet manufacturing industry
The cabinet manufacturing industry is a small yet highly competitive industry. It requires a combination of smart business strategies and technical expertise to grow in this field. Here is how ERP software for cabinet shops will help you:
1. ERP software for cabinet shops will keep the inventory costs low and eliminate waste.
2. ERP software for cabinet shops can perform numerous cabinet manufacturing production strategies — including make-to-order, make-to-stock, configure-to-order, assemble-to-order. It makes use of both the pull and push production control mechanisms to execute the cabinet manufacturing output.
3. ERP software for cabinet shops uses the Gantt chart to schedule and reschedule jobs. It has a scheduling engine and a unified resource model that optimizes scheduling across the company.
4. ERP software for cabinet shops uses numerous inventory dimensions — catch-weight calculations, multiple units of measure, and packaging codes.
Conclusion
In today’s cut-throat competition, when your customers demand the best-quality furniture at the lowest possible price, you cannot remain in business without implementing technology. Furniture manufacturing ERP software has become a need. It will make your processes efficient and error-free. It will help you maintain business-critical records and allow you to adhere to government norms. Further, it will also ensure that you always remain one step ahead of your competitors.
At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. To know more about it, SMS SAGE to 56767. You can also write to us at sales@sagesoftware.co.in
Disclaimer: All the information, views and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views or objectives of Sage Software Solutions (P) Ltd.
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