Manufacturing ERP: A comprehensive guide
Estimated reading time: 8 minutes
Whether you plan to expand your business or your company is facing constant bottlenecks and can’t grow, it is safe to say that investing in an ERP System is a wise decision.
Nevertheless, picking the right ERP System for the first time, upgrading the one your company already works with or even switching to a new provider can be a difficult task for managers. There are many options available on the market and to evaluate them is pivotal for choosing the one that suits your company best.
This guide will help you understand what an ERP is, its benefits in manufacturing, how it Works, and which one better fits your company’s needs.
What is an ERP system?
An ERP (Enterprise Resource Planning) is a software that helps manufacturers manage the daily activities of a company in one single system. This powerful tool can assist financing departments and human resources, manage inventory, plan maintenance scheduling among other operations of the company.
It is a great solution for companies of all sizes since it saves on costs, time and workload. In addition, an ERP System gives a clear view of all the business activities, collecting real-time information that helps managers take more efficient decisions when needed.
As a whole, an Enterprise Resource Planning (ERP) is a software that helps manage and automate the business resources and operations from different areas in real-time, making the management of a company more agile and efficient, obtaining better results.
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Why do manufacturers need ERP?
There are many motives why business of all sizes invest in an ERP software. One of the most important reasons is that it streamlines the operations of all the areas of a company by combining them in one reliable system. This helps an enterprise to be more productive and competitive.
Another justification is that an ERP gathers real-time data of a company’s processes, allowing full visibility and helping to avoid miscommunication. It also analyzes all this information, like past sales or the inventory status, forecasting future trends and outcomes. Thanks to these, decision making can be more confidently and can help a company grow.
In addition an ERP system can be customized according to a company’s needs. This means it can work on specified orders and saving time.
How ERP can improve manufacturing?
A way to understand the profits of having an ERP system in your business is to understand how it works and how it’s benefits can apply to your company. This list will provide you with a better insight:
- Accurate Stock Management: An ERP gathers the data of a company’s inventory in real-time. This makes storing, tracking, shipping and purchasing an easier task. This helps create a more strategic schedule programing to avoid production delays and supply shortages.
- Enhances Supply Chain: The management of the flow of goods will be more transparent thanks to the ERP System. The supply chain network of a business will have better communication with external partners. This streamlines logistics, saving money and time.
- Maintenance and Equipment Control: Having the equipment in optimal condition will not only help a company be more productive, it averts wastage of labor and financial loss. An ERP assists the maintenance team by monitoring the overall performance of a company’s machinery, tracking preventive and corrective maintenance requests and implements schedules based on priority, reducing bottlenecks.
- Better Workforce: Human capital is also a key part of a company’s success. And ERP can analyze employees’ reviews, track performances and can assist in training new recruits. This helps to minimize the workload of the Human Resources Department.
- Better Communication between departments: Managers and members can have access to the ERP information. These make departments be synchronized and reduce waste of resources and workforce.
- New Business Opportunities: The world is constantly changing and therefore its demands are too. An ERP can leverage this information, identifying business opportunities locally or internationally. This helps to prospect and develop new profitable chances for expansion and make a company grow.
What are the most common ERP systems in manufacturing?
There are three types of ERP Systems. The two presented here are the most common. Knowing their differences can help to pick the right one that your company needs.
Generic ERP Software
As its name states, it can work with many types of industries besides the manufacture sector and the investment is not big. This is a great solution if your company doesn’t need customization. It helps a company to have a better workflow process on daily tasks such as financing and accounting management . Nevertheless this software is not the best for floor operations and would need add-ons and extensive modifications to get the best of it. At the end it would create more costs than benefits.
If you are planning to expand your business and you already have this software or if your company is from a specialized sector, switching to a Specific ERP software would be a wise decision.
Specific ERP Software
This tool provides all the perks of the Generic ERP System but it is tailored for the particular needs of a sector. Easy examples are the medical and food industries. Each of them have specific raw materials, need particular processes in manufacturing and demand special care for their products. Having the Specific ERP will not only make a company to work more effectively and save workload but also will help a company be more competitive and reliable.
On the other hand, this system is more expensive than the Generic ERP Software, but it is a smart investment in the long run since it doesn’t need much customization or upgrading as the Generic ERP.
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Regardless of which ERP System you choose, both can be great solutions depending of what your company needs. Adding some customizations such as Skyplanner and AI driven production planning can be a game changer.
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