Enterprise resource planning (ERP) software can be a game-changer for your manufacturing operation. ERP solutions allow organizations to harness the power of data generated by processes, tools, and customers while dramatically improving operational efficiency.
In this strategic guide to planning manufacturing production cycles, you will see the ways that manufacturing ERP software can transform the way you think about myriad operational processes.
The challenges and opportunities in manufacturing today
Manufacturers today face several key issues that can create challenges for growth. According to a recent Berntson Porter & Company survey, two-thirds of manufacturers are expecting revenue growth this year, but face several challenges, including:
- A lack of alignment between revenue strategies and operations
- Growing competition from traditional and nontraditional players
- Government regulation
- Technological barriers
Technology is a critical part of most manufacturers’ strategic planning going forward. Digital transformation is changing the way companies approach their work. In addition, manufacturers have to be aware of not just traditional players, but disruptive new players who are embracing new technologies to gain market share.
Technological innovation will continue to influence production in 2018. Robotics, which have played a role in manufacturing for decades, continues to get smarter. Artificial intelligence, edge computing, and blockchain technology are likely to continue to shape the future of manufacturing across all sectors.
The role of ERP
ERP solutions at their most basic provide integrated data collection, storage, analysis, and access. An ERP solution provides the ability to integrate functional areas, including operations, research and development, sales, marketing, finance, human resources, distribution, logistics, and audit capabilities in one place. Data, often in disparate formats and systems, is housed, accessed, integrated, and used by multiple players within the enterprise.
For key decision makers, C-suite leaders, and other employers, the advantages of an integrated approach to data and systems allows for new approaches to solving problems. Data reporting and displays allow for a better understanding of systems, performance, patterns, and opportunities.
As a comprehensive software approach, ERP solutions allow for business processes to be integrated in a holistic view of the business, the work, and the needs.
Today, businesses can choose from on-premises ERP solutions or, increasingly, cloud-based products that allow for rapid scalability, cost control, and reduction or elimination of maintenance and security costs.
For the operations areas of your business, an ERP solution can have a dramatic impact on the work and how the work is done. Here is a closer look at several operational areas that can reap considerable benefits from an ERP approach.
Streamlining supply chain management
Today, your manufacturing is only as effective as your supply chain. As more companies have a global approach to manufacturing, the need for transparency and collaboration is critical. An ERP solution allows you to collect and share data, and to see the correlations between key supply chain components, from material sourcing to distribution.
An ERP allows you to integrate the information throughout the supply chain, from suppliers to customers. By bringing together disparate players and allowing for remote access to information, companies can more rapidly solve problems, control cost, and boost productivity.
Perfect inventory control
Manufacturers face near-constant challenges related to inventory management. Overstocked materials are costly and wasteful. Market fluctuations create uncertainty regarding demand and need for materials and supplies.
Inventory control features in the right ERP solution allow for more accurate management, with trace functionality that reaches the lot, sub-lot, and serial number level. With a full, real-time understanding of inventory levels, enterprise organizations can gain better control of materials on hand, needs, valuation and revaluation.
Making order fulfillment more productive
By integrating the finance, production, shipping, enterprise labeling, customer service, and transportation functions in one centralized location, companies are better able to fulfill orders quickly and accurately. Documentation necessary for order fulfillment, picking, packing, labeling, and shipping can be integrated, shared, and accessible to all employees and functional areas.
Picking will be more accurate and orders will be shipped on time, improving customer satisfaction and repeat business. Compliance issues related to exploring, materials shipment requirements, and safety will be integrated and documented clearly to ensure adherence to federal and international regulations.
Putting quality back in quality control
Real-time access to information is a significant benefit for your quality control teams. With access to data, processes, mixing, ingredients and recipes, intermediary products, and grading data, these teams can better value, label, assess, and monitor products throughout production and while in inventory.
An ERP system allows for customized assignments of quality assurance criteria to be used for expiration dates, inspections, upstream and downstream traceability assessments, and record-keeping. When faced with an inspection or audit, documentation can be provided quickly.
Strategizing production schedules
Manufacturing ERP software allows for better scheduling of production to time it to customer demand, orders placed, and anticipated needs. Production cycle planning will be transformed by better capacity planning, bill of materials planning, and shop floor control management.
When your ERP solution ties in performance management tracking and financial reporting, your planning can be even more anticipatory by factoring in lead times, material needs and supply delivery scheduling.
It becomes clear quickly that the impact of ERP solutions on manufacturing can be profound and powerful. At its core, ERP solutions are about leveraging data.
Today, there are terabytes of data available to every manufacturer. The smart factory floor has equipped machines with sensors that can collect and transmit information about operational efficiency, needed maintenance, temperature, and performance indicators. Products themselves can generate information either as finished goods or as raw materials. Finally, customers generate information on how products are used and consumed.
What data is needed varies from manufacturer to manufacturer and department to department. Without ERP solutions, the challenge is knowing what data is available in other areas of the enterprise. And when there is a belief that sharing and integrating data will improve operations, the enterprise is often hampered by system incompatibility or challenges in integrating and reporting on the collective data.
With an ERP solution, you’re better able to collect and reconcile this information, often using automation tools and connected devices that will share and store information in the right format and in the right place.
Business intelligence tools help to make sense of the information collected. BI tools, integrated with or a part of your ERP software suite, can help pinpoint trends and opportunities that otherwise may not manifest themselves.
BI tools and your ERP can also reduce the number of redundancies in the collection and reporting of your data coming from disparate sources or in different formats. Data will be presented in real time in an actionable format that allows for better and more accurate decision-making.
With the growth of globalized demand and production, companies face increasing domestic and international compliance issues. An ERP helps to maintain compliance with different agencies and regulators, using automated tools to track and record lots, generate audit trails, create reports and automate the data needed to comply with legal and fiscal requirements across different jurisdictions.
In the case of a recall event, your ERP solution also provides powerful tools to identify issues faster and resolve them. Powerful track-and-trace tools allow for rapid identification of sources and destinations of affected product. Streamlined processes allow for the identification, notification, and tracking required to ensure public safety and reduce the risk to brand, bottom line, and reputation alike.
With geopolitical instability an ever-present threat to manufacturers large and small, the need for more efficient operations is more critical than ever. ERPs can provide more certainty in the projections and assumptions that are used to plan and predict, and they can provide manufacturers not just with operational efficiency, but also more flexibility and confidence in decision making.
The ERP system is also critical for manufacturers looking to become more customer-centric and responsive to evolving customer needs and demands. Customers expect to interact more with brands and for those brands to know them and how they use products. With ERP tools, especially integrated with customer service functions, companies can be more responsive to customer expectations and needs.
Some manufacturers are even adopting manufacturing-as-a-service, providing on-demand access to desired products, customizations, and flexibility. With an ERP solution, manufacturers can be more responsive to the way customers want to access product.
Why the Cloud
Cloud ERP solutions offer considerable advantages to the manufacturer. Among the top benefits:
- Lower upfront costs that are shifted from capital expenditures to operating costs
- Lower operating costs as cloud solutions reduce or eliminate the need for onsite storage, maintenance, security, and cooling costs
- Fast implementation and scalability. Cloud solutions allow for companies to adopt quickly and gradually migrate data and systems to the ERP over time. Most cloud solutions allow you to pay for what you use, meaning that demand and usage can grow as needs present themselves.
- Updating capacity that is rapid and responsive, allowing for the newest versions of software and the newest technologies to be adopted and used quickly.
The need for powerful ERP solutions is clear. Knowing how to choose the right system is often not. NexTec Group helps enterprise organizations to determine selection criteria, evaluate vendors, and choose a solution. Contact us to see how NexTec can help your company choose the right ERP solution for your manufacturing needs.