Cost Reduction and Your Glovia Solution

Reducing costs is one of the most important goals for any business and Glovia customers are no different. Other than manufacturing the highest quality goods possible and delivering them to customers, there may be no more important goal in your enterprise.

To start, though, we must define 'cost.' There are standard costs, or costs that relate to production — both expected and actual, with the cost variance being the difference between the two. You also have your administrative costs, the expenses you have to maintain and operate your business. Further, you face customer costs — the costs you incur to provide service and help customers do business with you. Finally, you have the cost of your Glovia system itself, as well as its maintenance and support.

In examining each of these cost areas we find opportunities for you to reduce costs.

Standard Cost/Production Cost
The important aspect of your standard costs — labor, machines, material — is that you know where the costs are coming from. Through the use of glovia.com Costing, you have a variety of tools for developing, monitoring, and managing your product and service costs. These costs roll back into your planning engines — such as MRP, Factory Planning, and Supply Chain Planning — so you can further minimize cost and maximize throughput. When your products spend less time on the floor, there is the likelihood of less damage and loss and therefore higher overall customer satisfaction.

Another key component to this equation is glovia.com Shop Floor Data Collection. In order to have a complete loop you need information flowing from your shop floor back into your planning systems — often known as Manufacturing Execution Systems. Too many critical things are happening in real time on the floor and a data collection system that provides mobile and fixed data support for the wide array of device types and locations in your operations will greatly help you to increase productivity, reduce errors, cut inventory, and, again, improve customer satisfaction — all of course with a direct effect on your bottom line.

Customer/Incurred Costs
While the customer has always been right, in recent years this has become akin to religion. Businesses have almost literally bent over backwards to serve and preserve their customer relationships at all costs — as the cost of acquiring a new customer is often ten times that of retaining an existing one. While the current climate of competition assures this dynamic is here to stay, an enterprise furthers itself by having visibility into these often-mercurial costs and by having the ability to analyze and manage these costs in the most intelligent, far-sighted manner.

Customer costs accrue in services and attrition. By maintaining your customer volume you can control and reduce a number of your expenses, particularly inventory. With visibility into your demand stream, you know what you need, purchase the right quantities, and avoid overruns.

This is the essential argument of Lean Manufacturing and Demand-Driven Manufacturing strategies: if you only make what you know has already been ordered, and you make it in the most streamlined and sequentially sensible way, you minimize your costs while maximizing your performance. Glovia has been embedding Lean and Demand-Driven capabilities into its solution for over thirty years and you may wish to review our whitepapers and prior newsletters devoted to the topics.

What the glovia.com extended ERP solution gives you is the visibility to understand how customer-related demands are mapped to your operational expenses. You see what you are doing, what inventory is being committed and when, and also the impacts of changes as they come — which they almost always do. Because our planning systems have "what-if" scenarios that allow you to assess your options, you are in a position to make decisions that will not waste your time or money and will still allow you to keep original promises to customers and accommodate their subsequent requests.

Supplier Portal
Glovia's newest product, debuting in Spring 2005, is the Supplier Portal. In brief, the portal — based on powerful, collaborative XML technology — provides real-time access to your suppliers where they can obtain instantaneous information about what you need from them and where in turn they can update their status and communications with you, also in real-time.

Just as Glovia's Customer Self-Service modules enable you to distribute costly, time-consuming, labor-intensive customer service functions outward towards the customer and onto the web, so does Glovia's Supplier Portal distribute similar types of responsibilities and procedures to the supplier side of your operations. The net result is you rid yourself of often-large, margin-crunching expediting costs and you minimize "fire-fighting" and the damaging effects it has on your team, floor, and of course the general ledger.

Total Cost of Ownership
We know how important cost reductions are to your business and that costs associated with your Glovia solution need to be justified and returns on that investment need to be demonstrated.

So we focus on value from the start. Our solution has one of the industry's lowest total costs of ownership, typically a fraction of others. One large, global customer even concluded that their company's Glovia investment was 1/10th what they would have paid for the similar solution from another provider.

We fully leverage you existing investments so you gain tangible business benefits right away. We also put you in control of the implementation rate. Our solution is fully integrated — you can easily add more capability when you choose.

Better, Faster, Cheaper
This is just a brief overview of how your ERP system can help you to reduce costs. We believe the basic Deming principle that if you are not adding value in everything you do, you are adding cost. If something is not adding value, you get rid of it. glovia.com has been and always will be developed to add value at every touch point in your enterprise. We want you to see what you need to see and find out what you need to find out to make the best, fastest, most lucrative decisions for your company.

If you have further questions about how Glovia solutions reduce your costs, please let us know.