LIGHT MANUFACTURING (light industrial SME)

Type of business:Light manufacturing SME (assembly) — finished products made up of sub-assemblies and components (e.g. kits, simple equipment, assembled parts).

Size:15–60 employees, with a workshop + a small office (ops/purchasing/sales/finance).

Organization:production “make-to-stock” and/or “make-to-order”, variable volumes, high sensitivity to disruptions.

Initial tooling:Excel + emails + sometimes a partial ERP (purchasing/sales) butwithoutindustrial control (BOM, work orders, costs).

Initial situation (observable symptoms)

• Teams are “chasing information”: stock, progress of work orders, material needs.

• Decisions (workshop priorities, purchasing) are made “on the fly” due to lack of reliable visibility.

• Margin management is done afterwards… when it’s too late.

Management control & profitability

• No real-time visibility on project margins, variances between budget and actual, or profitability by client
• Tough compromises: project overruns are “felt,” but recognized too late.
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Execution & capture (time sheets / expenses)

• Time sheets and expenses are incomplete or submitted late
• The administrative burden weighs on consultants
• Risk of errors and unbilled costs.

Inter-team coordination

• Sales sell → Delivery discovers constraints too late
• Finance bills → Delivery has not validated the deliverables
• Contracts, SOW, change orders: scattered information.

Billing & cash flow

• Inconsistent invoices (formats, rules, terms)
• Recurring delays → pressure on cash flow
• Higher DSO (Days Sales Outstanding) because billing is done late.

• Control costsby product andsecure the margin(full cost + variances).
• Ensure inventory reliability(materials / work in progress / finished products) and reduce stockouts.
• Implement asimple planningand a “real” workshop tracking (production orders).
• Haveactionable dashboards(production, inventory, costs, OTIF, delays).
• Reduce emergencies, errors, and administrative time.

Principle: “operational clarity first, software second.”

Avoid overly heavy industrial models and build a simple foundation, adoptable by an SME.

Typical steps

1. Framing & diagnosis (S0–S1)

   • Flow analysis: order → plan → purchase → receipt → production → stock → delivery → invoice

   • Selection of 'pilot' products and definition of the level of granularity (BOM, routing)

2. Standardization of processes (S1–S3)

   • Stock rules, nomenclature, production orders, control points

   • RACI workshop/purchasing/logistics/finance

3. Configuration & gradual deployment (S3–S8)

   • Pilot on a product family, then extension

4. Adoption & piloting (S6–S10)

   • Training, routines, KPI, stabilization

A. Nomenclatures & routings (BOM + routings)

• Multi-level BOM(components, sub-assemblies)

• Versions(if needed) + simple substitution management

• Routings: stations, operational times, 'light' capacity

B. Production: planning & monitoring

• Production orders (PO): creation, launch, consumption, closure

• Progress tracking (in progress / completed / blocked)

• Management ofdeviations: scrap, overconsumption, actual vs planned time

C. Stocks: raw materials & finished products

• Replenishment rules (min/max, reorder point)

• Integrated workshop movements (consumption → material exit, finished product entry)

• Cycle counts / controlled adjustments

D. Costs & dashboards

• Standard cost + actual cost (based on maturity)

• Margin analysis by product / family / order

• Dashboards:

  • Stock (value, shortages, turnover)

  • Production (delays, WIP, yield)

  • Costs (material/time variances, unit cost)

Operational impact

• Better control over what is produced, when, and with what material

• Reduction of workshop errors (wrong component / wrong quantity)

• Fewer shortages and emergency purchases

Financial impact

• Clear visibility ofcost price→ quick price/margin decisions

• Reduction of cash tied up (overstock) and losses (undetected scrap)

Examples of commonly observed indicators (order of magnitude)

• -20 to -40% of emergency purchases related to shortages

• -10 to -25% of inventory variances after stabilization

• Reduced decision cycle (end-of-month reporting → weekly/daily)

Deliberate simplicity: we avoided the “gas factory” ERP.

Standardized processes before the tool: rapid adoption in the workshop.

Pilot deployment: we prove the value, then we expand.

KPI + routines: performance is managed, not just measured.

Production

• OTIF (On Time In Full) / on-time delivery rate

• WIP (work in progress) and average OF cycle time

• Scrap / rework rate

• Actual time vs planned time variance (efficiency)

Stock

• Material / finished product shortage rate

• Inventory variance (quantity & value)

• Stock turnover (days of coverage)

• Value of dormant stock

Costs & margin

• Actual unit cost vs standard (material / labor variances)

• Gross margin per product / order

• % of under-margin orders (alert)

Phase 0 — Framing (S0–S1): scope, pilot products, baseline KPIs, migration plan

Phase 1 — Design (S1–S3): BOM/routing/stock rules + processes + roles

Phase 2 — Build & Pilot (S3–S6): config + tests + training + 1 product family

Phase 3 — Rollout (S6–S10): extension to other families + dashboards + routines

Phase 4 — Stabilization (S10–S12): optimization, variances, continuous improvement

Risk: incomplete BOM data

→ mitigation: start with 20% of products that account for 80% of volume + BOM governance

Risk: workshop resistance (perceived workload)

→ mitigation: minimal input, simple screens, visible benefits (breaks/delays)

Risk: low stock discipline

→ mitigation: clear rules + rotating inventories + rights/validations

Risk: actual cost too complex

→ mitigation: gradual approach (standard → variances → advanced actual)