Cost Management: An explanation of the fundamental knowledge, objectives, and utilization methods of cost management, which is important for small and medium-sized manufacturing industries.
大塚商会 生産管理システム担当
For the manufacturing industry, cost management, which is directly linked to corporate profits, is one of the important initiatives.
However, especially in small and medium-sized manufacturing companies, many face challenges in cost management, such as "not being able to secure sufficient profits" and "inadequate pricing leading to manufacturing at a loss."
In the article we are introducing this time, we will summarize and explain the basics of cost management, the purposes and necessity of cost management for small and medium-sized manufacturing companies, methods for visualizing costs, ways to utilize costs, and case studies related to the implementation of cost management systems.
If you are interested, please refer to the details from the "Related Links" below.
For manufacturing industries, cost management, which is directly linked to a company's profits, is one of the important initiatives. However, especially in small and medium-sized manufacturing industries, many companies face challenges in cost management, such as "not securing sufficient profits" and "setting prices inappropriately, resulting in manufacturing at a loss." This article summarizes and explains the basic knowledge of cost management, the purposes and necessities of cost management for small and medium-sized manufacturing industries, methods to "visualize" costs, and ways to utilize costs.
Explaining the introduction process of a production management system divided into three phases: consideration, implementation, and operation.
【Our Production Management Package System】
◎ Integrated Production Management System "Production Innovation Fu-jin"
◎ Hybrid Production Management System for Repeated and Individual Orders "Production Innovation Raijin"
◎ Production Management System for Repeated and Mass Production "Production Innovation Ryu-jin"
◎ Cloud-based Production and Sales Management System for Small Lot Production "Production Innovation Wun-jin"
◎ Formulation-based Production Management System "Production Innovation Blendjin"
◎ Bill of Materials Management System "Production Innovation Bom-jin"
An explanation of how to choose production management systems tailored to each industry: assembly, processing, blending, and fabless companies.
【Our Production Management Package System】
◎ Integrated Production Management System "Production Innovation Fu-jin"
◎ Hybrid Production Management System for Repetitive and Custom Orders "Production Innovation Raijin"
◎ Production Management System for Repetitive and Mass Production "Production Innovation Ryu-jin"
◎ Cloud-based Production and Sales Management System for Small Lot Production of Various Products "Production Innovation Wun-jin"
◎ Formulation-based Production Management System "Production Innovation Blendjin"
◎ Bill of Materials Management System "Production Innovation Bom-jin"
The most easily implementable production management system for small to medium-sized assembly manufacturing companies [No. 1 in implementation share for companies with annual sales under 10 billion yen*].
◆Automatic arrangement of components based on backward calculation from order delivery dates
◆Inventory management capturing planned effective stock over time
◆Management of order backlogs and purchase backlogs by customer, supplier, item, and delivery date
◆Support for "individual customized configurations" of standard components
◆Automatic switching between obsolete parts and successor parts
◆Support for multiple company purchasing
◆Barcode support (order forms, manufacturing instructions)
◆Foreign currency management support
◆General data output/import functions for master and detail data
etc.
*Already implemented or planned products/services (for companies with annual sales of less than 10 billion yen <most significant ones>) with the number one market share in implementation
Source: "2024 Edition Report on the Actual Use and Evaluation of IT Applications in Medium and Small Enterprises" (Nokri Research)
Hybrid support for repetitive and individual production, achieving true end-to-end integration through collaboration with the design department [No. 1 in implementation share among companies with annual sales under 10 billion yen*].
◆ A hybrid type that accommodates both repetitive production and individual production management forms
◆ Automatic arrangement of component parts through backward calculation from order delivery dates
◆ Inventory management that captures planned effective inventory over time
◆ Management of order backlogs and purchase backlogs by customer, supplier, item, and delivery date
◆ Support for "individual customized configurations" of standard components
◆ Automatic switching between end-of-life parts and successor parts
◆ Support for multiple company purchases
◆ Barcode support (for order forms and manufacturing instructions)
◆ General data output and import functions for master and detail data
◆ Creation of estimate parts lists for cost estimation and issuance of quotations (optional)
◆ Direct integration with the parts configuration management system 'Bom-jin' (optional)
◆ Cost aggregation management by production number and project (materials cost, outsourcing cost, labor cost, expenses, etc.) (optional)
◆ Support for foreign currencies
etc
* Ranked first in market share for products/services already implemented or planned for implementation (for companies with annual sales of less than 10 billion yen <most significant ones>)
Source: "2022 Edition Report on the Actual Use and Evaluation of IT Applications in Medium and Small Enterprises" (Noh Research)
Supporting inventory optimization and delivery compliance for manufacturing companies that mass-produce automotive and electrical components [No. 1 in adoption share for companies with annual sales under 10 billion yen*].
▼ It is possible to formulate an optimal production plan considering inventory and load by process. Based on forecast and internal notification information as well as confirmed order information, the necessary production quantities are calculated for each process, including outsourced inventory and semi-finished and finished product inventory, to create a production plan. Additionally, the load against the plan can be checked by process/machine, allowing for adjustments.
▼ Reduction of product, work-in-progress, and raw material inventory, and improvement of on-time delivery rates. By accurately capturing the inventory of raw materials, work-in-progress, and finished products, it is possible to maintain optimal inventory levels without unnecessary production instructions, thereby reducing excess inventory and preventing stockouts. Furthermore, by considering inventory between processes, it supports the improvement of on-time delivery rates with the shortest plans that efficiently capture the flow of goods.
▼ Quality improvement and increased reliability with customers through lot tracing. It is possible to accurately grasp when and where the raw materials used in the products were purchased or produced.
* The leading share in implementation among products/services (for companies with annual sales of less than 10 billion yen <the most significant ones>) that have already implemented or are planning to implement production management. Source: "2024 Edition Report on the Actual Use and Evaluation of IT Applications in Medium and Small Enterprises" (Nokri Research)
Support for strengthening arrangements, manufacturing, inventory, and quality control in accordance with the coordination table (recipe) [No. 1 in market share for companies with annual sales under 10 billion yen*].
【Total business support from production planning to ordering, production, and sales】
From production planning, it is easy to issue ordering instructions for raw materials and production instructions based on the formulation tables and recipes for each product. Furthermore, it comes standard with comprehensive sales management functions, allowing for seamless management of production, shipping, and sales.
【Flexible production management that supports multi-stage formulation】
It enables "multi-stage formulation" through stepwise formulation of intermediate products and common materials, allowing for the planning and ordering of flexible production schedules that accommodate small-batch, diverse production.
【Strengthened quality control through lot traceability and expiration date settings】
The lot traceability function allows for bidirectional history verification from "product to raw material" and "raw material to product." Additionally, it enables expiration date management for each lot number of raw materials, semi-finished products, and ordered items.
*Ranked first in market share for products/services already implemented or planned for implementation (for companies with annual sales under 10 billion yen <most significant ones>)
Source: "2024 Edition Report on the Actual Use and Evaluation of IT Applications in Medium and Small Enterprises" (Noh Research)
Achieving true end-to-end integration in manufacturing from upstream to downstream through BOM construction for reuse and standardized design - Reuse and Standardized Design Platform.
【Features】
○ "Item Ledger" that realizes parts standardization and improves parts reuse rate
○ Powerful "Item Search Function" that allows you to find what you want when you want it
○ "Similar Item Management" that suppresses new parts
○ "Code System Management" and "Automatic Numbering Function" for each item type
○ "Free List Editing Function" that makes conceptual design and parts composition editing easy
○ "Batch Output Function with Stamps" that supports drawing output tasks
○ "Latest Version Management" that makes old items easily identifiable
○ "Word Dictionary Function" that achieves company-wide standardization of item names
○ "Item Information" that allows you to grasp item history and design history
○ "Title Field and Parts Field Linkage Function" that improves design productivity in CAD drawings
○ "Document Link Function" that manages various documents related to items
○ "Latest Item Update Function," "Batch Version Up Function," and "Configuration Change Difference Display Function" that support design change tasks
● For other functions and details, please download the catalog.
We are offering the latest edition of "Successful Case Studies of Production Management Implementation in Manufacturing Industry 2022," refreshed in March 2022! Solve the challenges of the manufacturing industry using IT and digital solutions!
If you would like a collection of success stories, please request a catalog through "Contact Us" or view it as a PDF from "PDF Download."
We are offering a handbook that explains the essential knowledge of "BOM" for manufacturing DX! Achieve cost reduction through the reuse and standardization of products and parts!
If you would like a handbook, please request a catalog through "Contact Us" or view it as a PDF from "PDF Download."
Related catalog
Key Points for Successfully Implementing a Production Management System
