Why it’s good to go paperless in manufacturing

One of the more interesting issues affecting manufacturers today is how to handle paperwork. This isn’t just a matter that affects accounting: A bill of materials is an example of something that requires a paper trail. At the same time, it’s very easy for a business to lose money and productivity because of a misplaced change order or similar issue. That’s why many businesses see the future in going paperless in all operations. Of course, that’s not necessarily an easy task, even in a small job shop or fabrication outfit. Understanding what benefits a company gains from digitization is essential in order to plan the transition effectively.

A more secure and efficient operation

There are many particular benefits that come from switching from paper-based to paperless operation. The first is simple data security. As a tangible object, paper is prone to damage and destruction from physical wear, fire and flooding. A study from Dassault cited by Product Design and Development noted  70 percent of all businesses would fail within three weeks if they lost their paper records in event of a natural disaster. By going paperless, a business can have this information backed up to a server that is off site. When the time comes, a company can recover the data without too much effort.

Money also plays a role in going paperless. Consider an average of 15 percent of a company’s revenue goes toward creating, managing and distributing paper documents. That doesn’t include the space, boxes and filing cabinets required to store important records for various regulatory and tax purposes. A significant amount of that money can go back into improving operations as a whole if a business digitized its records and operations.

There is also the matter of streamlining operations. A change order or bill of materials would have to change hands a number of times and placed in a memorable spot. Otherwise, they’re hard to track and can get easily misplaced, disrupting productivity. In a digital setting, these documents would be sent directly to the operators or engineers through a computer or mobile device in a manner that’s easily tracked and accessible. This is particularly useful in a make-to-order environment, where alterations can come at a frequent basis.

The gradual rollout

Of course, going all-out on digitization is not as simple a task as one would make it, even in a small shop. With different aspects of the operation requiring various forms of paperwork with specific management and distribution prerequisites, even moving to enterprise resource planning software such as Microsoft Dynamics NAV may not necessarily present the benefits right away. It can also be expensive initially. As Dynamics World suggested, it may be ideal to take a more gradual approach at first. For example, supervisors could start by throwing out the notepad and typing notes on a computer through Microsoft Word or OneNote, both of which interconnect with NAV. That can help organize things significantly.

At the accounting level, various changes could help push the paperless initiative in the right direction. If a company still gives out paychecks, a great idea is to consider a couple of paperless options. Direct deposit to bank accounts is one direction to take, while those without accounts can receive employee pay cards, which are debit cards filled with their pay. Payroll can go further by killing off paper slips as well, allowing workers to access this information online and print it for themselves if necessary. In addition, with states and the IRS already requesting electronic reporting, it may already be in a company’s best interest to switch to digital tax records. Finally, instead of printing out an invoice, emailing it directly to a customer may work best. All of these require little upfront cost and can help manufacturers get on the right path to paperless.

Manufacturers interested in learning more about more efficient ways to create a bill of materials should download the white paper “Microsoft Dynamics NAV Supply Planning” today.

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