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Announcer: You're listening to Manufacturing Ignition Hot Topics, bringing you right up to date on the latest trends and discussions within UK manufacturing, sponsored by Bonfire Recruitment, helping manufacturing leaders across the UK to attract the best talent for their manufacturing company. Ignite your business or career today by visiting www.bonfirerecruitment.com. Here's your hosts, Terry Mallin and Scott Buchanan.
Terry Mallin: On this episode of the Manufacturing Ignition Hot Topics, we are going to discuss are you effectively planning all the resources within your manufacturing company, and I'm pleased to say we have a guest today, Scott.
Scott Buchanan: We do indeed.
Terry Mallin: Yeah.
Scott Buchanan: That's a big surprise.
Terry Mallin: That is, it is. I would like to welcome Hannes Kert. Hannes is co-founder and operation manager for a business called Katana MRP. Now, Katana MRP is a new cloud-based software for small manufacturers. Hannes' background is all within management consulting. He has also advised a number of manufacturing companies. He's very well experienced within our sector. And actually what he noticed was a gap in the market in the past couple years, and he's been involved in a few startup businesses, which the latest of which is Katana MRP.
Terry Mallin: The reason why we wanted to do this topic today is that actually over the past episodes, we have been discussing automation robotics, IoT, cloud-based factories being the future, and we even mentioned that on our latest news today, and we feel that Katana MRP being a startup business, being very forward thinking and innovative, could potentially have a product that could benefit our manufacturing leaders who are less than[inaudible 00:01:48].
Terry Mallin: So Hannes, I would say over to you. If you can give us a real sort of brief introduction, give us an idea of how do manufacturers currently plan resources, how do you see that from your research, and then obviously what challenges you've seen, and give us an idea of what Katana MRP can do for our business.
Hannes Kert: Yeah, sure. Hi, and thanks, Terry and Scott, for inviting me today. It's good to be here.
Terry Mallin: You're welcome.
Hannes Kert: Actually, you predicted earlier that by 2019, about 50% of manufacturers will be collaborating directly with consumers regarding product design, right? And I strongly believe in this prediction. We already see that more and more manufacturers are actually becoming vertically integrated, also in sales, so they're cutting out the middle man, and they're going straight to the customers. It's now so easy to set up your own web shop, and many small manufacturers are actually just doing that. And actually, these are exactly the manufacturers that Katana MRP is meant for, manufacturers who are vertically integrated, who sell online, built their own brand, and want to be visible.
Terry Mallin: So, seeing the current market today, what are manufacturing companies using, because obviously Katana being a new product, what's the current products that people are using at the moment, and what challenges, if any ... yeah, if any ... and what challenges do you see with these systems that people are using?
Hannes Kert: I'll tell you a little story how. Imagine there's a girl who really loves design, especially designing leather bags and accessories for example, and she's really good at it. At first, maybe she just makes a bag for herself, then maybe a couple more to her friends, family. Then the word starts to spread, and she gets more orders from friends, and she somehow needs to start keeping track of those orders, right? So, what does she do? She opens up a spreadsheet, starts marking the orders down, keeping track of everything in a spreadsheet, right?
Hannes Kert: Everybody seems to like what she's doing, so what we talked earlier, she decides to open up a little web shop in Shopify, for example, just to see what happens. So, she does a little bit of marketing, and suddenly more orders start to come in. What does she do? She hires a couple of assistants, quits maybe her day job, and starts doing this full-time. Now, she has more complicated business to manage. She creates some new spreadsheets for purchasing, for calculating the cost of making the cost, for keeping track of orders and scheduling the work, and so on.
Hannes Kert: But if you have one or two assistants, maybe five orders a day, that's good enough, right? So life is pretty good, but when you start to scale and things start going really, really well, then usually life is not so good anymore suddenly. So, she spends maybe most of her day, then, shuffling through different spreadsheets, updating them manually, trying to keep on top of operations, and so on. And also maybe she feels that she might have bought too much of some raw materials, but she is running out of some other materials too often. Deliveries start running late, of course customers are complaining, and so on. So it's growing over head, and what's worse, she doesn't have time anymore for what she actually loves to do, which is design bags, right?
Hannes Kert: So at this point, she needs to find a solution. Well, one option could be that she would just hire a new person who would take care of the extra spreadsheets, but that's a bit too expensive usually, and small manufacturers are short of cash anyway because they've usually invested too much in stock, and what's the other option? She can go online and try to find a software solution that would make things easier for her, but if you Google it and try to find something for small manufacturers, what you usually find is only really complicated, expensive desktop solutions that are not meant for small manufacturers, but rather for large factories-
Scott Buchanan: Okay, okay.
Hannes Kert: ... and enterprises, right? There are a couple of cheaper options, of course. We're not alone on this market, but the user interfaces of those solutions usually look like Windows 95, and actually the next version of my own works, they belong to one of our test customers, who said that other products feel like databases, where you can enter a lot of data, but it's difficult to get anything back, right? In short, none of the solutions that you can find actually help her do her job and save her time to concentrate on what she loves to do.
Terry Mallin: So, what's that mean? You mentioned a couple [inaudible 00:06:39] that this person, take this hypothetical person who has started doing business, doing very well with her leather bags, so why they choose, or why would they work out using Katana [inaudible 00:06:53] USD in the market?
Hannes Kert: We are targeted at small manufacturers, that's what I'm saying. We build the software-
Terry Mallin: So small manufacturers, give me a sort of idea of size on those.
Hannes Kert: Actually, small in our terms doesn't mean the number of employees or the amount of sales or revenue you have.
Terry Mallin: Okay.
Hannes Kert: It's more to do with the processes you have and how complicated they are, but usually, just trying to make an estimation, we're usually best fit for companies who have maybe something like five to 20 employees and their own products and selling online as well. So we seem to be a best fit for those.
Hannes Kert: And how we are different from others is that we focus on actually helping people do their job. So we have visual dashboards and visual auto management, which gives the user a really good overview of the status of all orders at any time and also the availability of product and materials to fulfill those.
Hannes Kert: Also, if you compare the spreadsheets that the girl was using before, right? Inventory levels and spreadsheets do not update automatically, but in MRP, in Katana MRP, they update automatically based on your sales, based on your manufacturing, based on your purchasing. And we also help the users keep optimal stock at all times, so you wouldn't have too much, which means that you have cash tied up in your stock, and you wouldn't run out either. And it's all in the clouds, so you can access it from anywhere, any device, anytime.
Terry Mallin: So I think that's a great thing, especially these days, so I'm guessing that a business leader, someone that sees a business doing very well can actually ... who's very technically advanced can use it on their iPad, they can look at it on an iPhone, desktop. They'll have access to it anytime that they want. Would that be correct?
Hannes Kert: Exactly, exactly, so everyone has more work today, so you need to, if you're running a small business, even maybe when you're on vacation, you every now and then when I check what's happening, so-
Terry Mallin: So picture us sitting on a sun lounger and spin with a pina colada, looking at Katana MRP [inaudible 00:09:15], checking how the factory and the leather bags are doing, and actually she was doing-
Hannes Kert: Yeah, I would recommend resting during your vacation, but you can do that.
Terry Mallin: Yeah, good. So, back to what the topic is. So, the topic was are you effective planning all resources within your manufacturing company?
Hannes Kert: Right.
Terry Mallin: And in fact we have been reiterating on that, so for those of us who may have set up their business, it doesn't matter the size and [inaudible 00:09:42], but if they're still at that stage of scaling and then working on various spreadsheets that's kind of grown arms and legs, to put terminology around that, but actually it's taking up a lot of time, it [inaudible 00:09:56]. But actually, what if you're looking for a platform that you can access 24/7, anywhere in the world, so if you're the leather bag designer and you're having a flight and you need to do some research on the latest leather bags, you can access how your factory is doing from the catwalk in Milan, whenever that is during the year, but actually you can check that out and see how that's performing, and that's the beauty of Katana. And you explained the USD very well, so probably flapping on his head a little bit, some of the [inaudible 00:10:31] as well being medium and large manufacturing companies with established systems in place, could Katana MRP benefit these guys at all.
Hannes Kert: Medium-sized manufacturers who have more advanced systems?
Terry Mallin: Yeah. Is there any benefit of using Katana at all, or-
Hannes Kert: Yeah, sure. As I mentioned, it depends on how complicated your processes are. At the moment, for example, if you have really different workstations which have different capacities, and you have 50 employees rotate, you have specific working hours and shifts for those employees, then you need really detailed manufacturing planning, which would take all this into account, right? This is not what we have at the moment. We see that actually small manufacturers do not need to plan in this detail, and this is actually the shortcoming of our competitors. They tend to over-complicated things and not actually listen what small manufacturers need, so we-
Terry Mallin: Yeah, see-
Hannes Kert: Our planning and our scheduling is actually done at a more higher level, which tends to be more suitable for most small manufacturers, who doesn't need all that detail.
Terry Mallin: Yeah, so I guess then you're potentially well-suited for a reactor business as well so that whereby one week you can have an order of 10 things, or the next week ... or 10 units rather ... you could have an order of 1000, and because of the nature of what your product does, keeping everything in check, keeping the processes in check, and being able to control things without letting go or letting one part of the process go by the wayside, and-
Hannes Kert: Yeah, the main thing is that Katana can save you time. You don't need manually update stuff. We will also have inspirations with virtual platforms, like Shopify or WooCommerce for example, so you can save time there as well and save some manual work. We help companies scale and focus on what they love to do and what they need to do to scale.
Hannes Kert: Now, being a relatively new company ourselves, we still have a lot of new features coming, and having said earlier that we, at the moment, are not really targeting those medium-sized companies with more complicated processes, I believe that probably in the years to come or in months to come, we will also add some more complicated functionality that will help those medium-sized businesses as well. But at the same time, we need to keep it simple for the small, so there's the-
Terry Mallin: Yeah, yeah. Get your ducks in order and then scale it from there. I am thinking, what was I going to say? So this dashboard, so picture the leather bag manufacturer, okay? What could that person potentially see? Give me a quick overview of what that person can see from the dashboard.
Hannes Kert: All right, so let's imagine an order is made on a website-
Terry Mallin: Yep, a thousand leather bags have came through fairly, a brand new design, her business is booming, everybody's loving leather bags.
Hannes Kert: Yeah, you're not the small manufacturers if someone orders 1000 bags, but okay. So, but okay, order comes for 1000 bags, let's say through Shopify. This order gets automatically imported into Katana. You can see either sales order list or a sakes order grid, as we call it, which uses a red/green/amber color code, so you can for example ... If order comes in, you can immediately see, for example, the product availability, so it will tell you if you have already this product in stock or is it maybe expected to come out from the manufacturing or it's not available, so you would need to actually start making it.
Hannes Kert: And talking to various manufacturers, especially small manufacturers, they are now moving towards make-to-order principles, so they don't keep high stock, but they make the product when the order comes in. So in this case, it's also really important to keep track of your raw materials so that you can fulfill those orders and start producing when you need to produce to deliver the products to customers at the right time. So, in Katana, you can also see whether you have all the materials needed for producing the products that the customers have ordered. So this is the product and material availability.
Hannes Kert: You can also change the status of your manufacturing process. You can track your deliveries, your payments, and so on. And I think one thing that is unique as well compared to our competitors is that you can actually drag and drop to change the priorities of different orders and different jobs, and based on that, the availability of products and materials recalculates automatically, so if you have a really high priority customer, royal customers who send you an order, you can drag it to the first rank and maybe then this order will have a priority of taking the product from your stock, and you can push some other orders down a bit. So it's actually all about flexibility, which small manufacturers need, and all the changes that happen on a day-to-day basis and hourly even. You need to somehow manage that conveniently.
Terry Mallin: Okay, and then one final thing that's kind of on my head. So we're talking about leather bags as our product, right? And actually selling them on Shopify or another some sort of website where actually we sell our products. I'm guessing the platform will handle any type of manufacturing process, from metal manufacturing, metal furnishings, to foods, to plastics, whatever it may be. It doesn't matter, a product's a product; however, is this heavily weighted on manufacturers who sell mainly online through a website, or can it be used for manufacturers that might sell into bigger businesses, like customers, bigger customers. Like for example, a company that makes the specific parts for Rolls Royce for their engines, they wouldn't sell those parts on a website [inaudible 00:17:17]. They've got agreements with customers. Would that be useful for these type of businesses, or is it mainly for businesses that are operating online through a website?
Hannes Kert: Yeah, sure. It can definitely benefit those companies as well. It's just a matter of how you insert your sales orders into the platform. If you're selling online, you can do it automatically, sync automatically. If you receive your orders through mail, or actually email for example, you can then just create those sales orders manually in Katana MRP, which you can do. So, also if you're selling multichannel, as many manufacturers are, maybe they have their own web shop, they have a little retail-like outlet as well somewhere, and maybe some others coming through phone as well, so you can combine all those on one platform and manage everything in one place by automatically getting orders from Shopify to Katana and manually entering the other orders. But they will all appear in the same list. You can change the priorities and manage the product and material availability for all those orders on the same dashboard.
Terry Mallin: Yeah, no. Perfect. Okay. And so, can I ask you one final question?
Hannes Kert: Yeah, sure.
Terry Mallin: Where did the name Katana come from?
Hannes Kert: So, as I said, many small manufacturers are now leaning towards make-to-order and sort of trusting time and lean manufacturing is trending. And where does lean manufacturing come from? It comes from Japan, and Katana actually is a Japanese sword. And it also refers to cutting edge manufacturing, which we try to bring to small manufacturers as well, so it's sort of a bow to Japanese lean manufacturing and at the same time it's also cutting edge.
Terry Mallin: Oh, okay. I like it even more. That's good, that's good. So I heard you mention if people are looking to have a test run of the software, what could you offer?
Hannes Kert: Yeah, we're actually currently free of charge for everyone. So last time to sign up. We-
Terry Mallin: So, how long is ... so it's free of charge currently. If you want to trial it out, you can test out the product. If you like it, when's a sort of deadline? When are you moving to a sort of paid platform.
Hannes Kert: The first paid plan will be available in January, or end of January next year.
Terry Mallin: Okay.
Hannes Kert: You will still have about one and a half months to enjoy the free version. Then all of the users will be converted to the paid plan, but there will also be 30-day trial, so first month you would need to pay is actually end of February or March.
Terry Mallin: End of March, okay. I'm guessing obviously you would look after people who have supported you from the start. [inaudible 00:20:17] as well on that basis, and that's good, the fact that these people are going to have a free trial. Guys, take that summarizing of that. If you're a small or medium-sized, growing, [inaudible 00:20:32] manufacturing company and you embrace technology, you also sell products that can be online a lot, and you're looking for a cloud-based business platform dashboard which you can access anywhere on any device, and you can see how your business is operating even if you're at the Milan fashion show checking out the latest bags, you can check in, then please do get in touch with Hannes and have a discussion on the Katana MRP software. You can contact Hannes at firstname.lastname@example.org, or visit the website, which www.katanamrp.com.
Hannes Kert: Yeah, sure. Thank you.
Terry Mallin: Thank you very much, Hannes. We really do appreciate that, and why don't we catch up in maybe three months' time and see how business is going and get an update, and we'll get you back on the broadcast?
Hannes Kert: Yeah, sure. That would be great.
Scott Buchanan: Best of luck, [inaudible 00:21:37].
Hannes Kert: You too. Cheers.
Terry Mallin: Cheers, Hannes.
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