3 Benefits of a modern ERP system to the manufacturing industry

3 Benefits of a modern ERP system to the manufacturing industry

Many enterprise resource planning (ERP) applications or systems were made especially for manufacturing environments. With so many moving parts and complex processes to manage, ERP applications have become key to optimizing all of it, reducing margins for error, and gaining a competitive edge.

Once the exclusive advantage of large manufacturers, ERP applications are now a must-have for small manufacturers as cloud services like Software-as-a-Service (SaaS) have made them very affordable. Take a look at the many ways ERP applications benefit manufacturers of any size.

Related article: IT solutions every manufacturing firm should have

Automated processes

Automation ensures that the wheels of manufacturing keep turning and production deadlines are met. Automating large-scale operations, in particular, frees up time, minimizes human error, and improves productivity.

Many aspects of supply chain management can be automated. For instance, inventory purchase orders and re-orders can be automated. Mission-critical stock will never run out for as long as inventory requirements are automatically updated according to current stock and orders received. This makes inventory more efficient because it does away with permissions for every purchase order.

Small tasks such as reporting can also be automated. Reporting is crucial to understanding day-to-day operations and events in manufacturing environments. An ERP application can provide a stream of visualized data from daily operations on business intelligence dashboards so management can make better-informed decisions. This reduces human error since operation variables are automatically monitored and assessed even when workers can’t keep tabs on conditions. This ensures that a plant operates at an acceptable or even optimal state.

Automation isn’t limited to the manufacturing floor or the supply chain, as ERP systems have modules for various business functions. For instance, human resource management (HRM) modules can manage and automate an array of HR functions of your manufacturing firm such as staff training, annual leaves, sick leaves, and payroll to ensure that they are always on track and personnel are not overwhelmed by manual tasks.

Reduced costs and maximized production

Cost reduction in inventory management is one of the main reasons to use ERP applications. Through a combination of automated reordering, calculation of material usage, and better inventory tracking, stock inventory can be kept at minimal levels. This reduces costs by not having to expend cash on stocks until necessary and consequently minimizing warehousing expenses.

Managers can also run plants with a view of maximizing workflows, as the ERP system keeps tabs on production problems and flags them as they happen. This allows managers to achieve accurate production planning and to reschedule workflows so that disruptions are minimized and production deadlines are met. The ability to reschedule workflows can result in increased production, which is a distinct advantage in a competitive manufacturing industry.

Related article: Highlights of lights-out manufacturing

Greater data visibility

An ERP system can be used to store all the company’s data in a central database or one that’s accessible to all departments. If engineering recognizes the need for additional raw materials on the plant floor, they can update this database immediately and, in turn, inform other departments that can act on the need. This accelerates processes, which also reduces administrative and operating costs.

An ERP system will allow your firm to observe every aspect of the supply chain and do the following:

  • Optimize workflows around deliveries
  • Monitor costs and price fluctuations
  • Run daily reports showing the status of orders and supply
  • Gain full accounting visibility of your supply chain
  • Gain full management control so that the right people make the right decisions regarding your supply chain

An ERP system provides a 360 view of operations, which will bring about the following strategic advantages:

  • Awareness of bottlenecks and other problematic areas in production processes and workflows
  • Greater operational insight and optimized workflows for all plants
  • Teams that are able to compensate for sickness and absence so that productivity can be maximized in spite of a lack of personnel

Keep your plants operational 24/7 and at optimal production times, avoid unnecessary costs and delays, and stay competitive in demanding markets. To enjoy these advantages, you need to fully integrate ERP systems and applications into your firm with the expertise of a managed IT services provider (MSP). Spectrumwise not only has a deep understanding of ERP technology, but also of the challenges and demands of your industry. Contact us today for a demo.

Like This Article?

Sign up below and once a month we'll send you a roundup of our most popular posts