Over the years, the manufacturing landscape has become increasingly competitive. Manufacturing firms of all types and sizes are expected to create, build and deliver superior quality products at a rapid pace and at the lowest possible costs to grab a substantial market share and win new customers while retaining old ones. This can be a tremendous challenge for manufacturing firms as they need to continually excel in all processes involved in production, sales, and distribution to truly be efficient.
ERP for manufacturing firms help leverage advanced features and functionalities to improve all facets of their manufacturing processes – from sourcing and procurement to production, warehousing, quality testing, and delivery. Thus, ERP for manufacturing can enhance efficiency, diminish costs, and increase sales and profitability. Furthermore, an ERP solution for manufacturing can be a gateway to solving your manufacturing limitations such as poor production scheduling, excess manpower and more.
Here are 5 ways manufacturers can gain from ERP solutions:
Automation of manufacturing processes
The biggest benefit that an ERP solution offers to a manufacturing firm is the automation of processes. Manufacturing process automation not only speeds up the overall production process but reduces the instances of errors significantly. By moving from manual to automated manufacturing, a firm reduces its dependency on humans and therefore the process become simple and more accurate. Automating tasks improves profitability and the customer experience.
As manufacturing ERP solutions are centralised, all departments of the organisation can access and view the production data in real time. For instance, the engineering team can monitor the progress of the production floor and update the purchasing and finance departments about the requirement of additional raw materials. Today’s ERP systems often offer integration capabilities, which make it easier to centralise information so that all the key employees who need access to data can get it easily from one place. Essentially every department has complete visibility into designing, production status, quality control, inventory levels, and more. This enables seamless coordination and execution of all related processes and procedures, thereby, streamlining the entire manufacturing process.
Improved collaboration and communication
Manufacturing ERP systems enable firms to share important production-related data with not only internal employees but with external stakeholders such as suppliers, distributors and sometimes even end customers. This improves communication and collaboration leading to smoothening of activities among these key business partners. For example, when a vendor is falling short of inventory, he can use the ERP software to communicate the requirement to the sales team. The information for orders provided by the sales team can be communicated to the operations team and the additional products can be manufactured. Thus, ERP for manufacturing process allows department heads to effectively manage data from external parties to enhance decision-making efforts.
ERP systems for the manufacturing vertical significantly reduce costs despite the high initial investment. By increasing worker productivity, the ERP solution minimises overtime and related labour expenses. Enhanced precision and lower error rates in production floors reduce the scrap and re-work that can drain financial resources. Better tracking of inventory, spare parts, and components, combined with more accurate production planning, eliminate excess inventory and warehousing costs. Finally, improved visibility into all financial aspects of production can help identify potential areas for savings and reduce the cost of goods sold.
Enhanced control over inventory, accurate production planning, streamlined scheduling, and coordination of distribution channels enable companies to improve on-time delivery of products, a critical performance metric for today’s manufacturers. Being able to get products on time to their destinations is critical to maintaining customer satisfaction. ERP solutions for manufacturing processes offer data in real-time so decision makers can get a realistic view of inventory levels at any time.
With further development in the ERP realm such as cloud ERP and mobile ERP, manufacturing firms can improve productivity within the enterprise. Manufacturing ERP solutions help enhance collaboration, automation, and improve process tracking. This in turn helps you increase productivity and profitability while keeping the end customers satisfied.