ERPs: The Ultimate Solution for Manufacturers

Smart factories. Digital operations. Informed decisions.

These are the concepts on everyone’s agenda when referring to smart manufacturing. Let’s examine what this means for the manufacturers of tomorrow and how they can leverage ERPs to stay ahead of the curve.

Manufacturers worldwide are under increasing pressure to adapt after the rise of digital technologies and the spread over global networks have taken the industry by storm. One thing is certain — the future of manufacturing is here and it is impacting the entire value chain, including research and development, production, customer delivery, and support.

And the stakes are high — there is no other industry that creates the economic value that manufacturers deliver on a daily basis. So let’s take a look at the increasing demands that currently shaking things up for manufacturers worldwide: 

• The emergence of global manufacturing networks driven by high customer demand
• The switch from hardware to software and IoT that are speeding up time to market
• The need to focus on enhanced flexibility and lower operating costs
• The importance of enhancing the quality and control side to manufacturing

Given the current state of the industry, it’s increasingly important for manufacturers to embrace digital technologies and adopt smart tools in order to help them compete in the market. And Enterprise Resource Planning (ERP) solutions can help them do just that. Let’s explore the importance of ERPs for the manufacturing industry and the benefits they can gain by using one in their business.

Manufacturing for the Future with an ERP

In short, what an ERP solution does is enable an organization to use one system to manage different business processes. The solution is particularly oriented towards accounting and operations and can be useful to identify and plan resources across the enterprise. As a result, it can have a meaningful impact on the following areas:

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The Importance of ERPs for Manufacturing

ERPs unlock several smart capabilities for manufacturers and prepare them for the operations of tomorrow. Let’s explore some of the most important benefits in more detail:

1. Automate Processes Across the Manufacturing Value Chain

ERPs help manufacturers advance their automating efforts, especially related to their reporting tasks and understanding what goes on a daily basis. In this sense, higher management benefits from the business intelligence they need to make reliable and informed decisions.

Moreover, effectively employing automation decreases the incidence of errors, as important tasks will get done even if someone forgets about them. This can be particularly important during busy periods or conflicting deadlines. The ERP makes sure that the plant operates according to procedures. And with automation reports, keeping an eye on the operation process is seamless.

2. Saving Costs Saves Efforts as Well

One of the main advantages of ERPs is cost reduction. Even if they imply a significant investment in the beginning, the ROI is equally significant. One of the most important areas where the lower cost is reflected is inventory management. This helps manufacturers keep minimal stocks by automating reordering and considering the material usage. As a result, they no longer have to hold large stocks, which in turn translates into lower costs.

And the cost-effectiveness does not stop there. With ERPs, manufacturers have the possibility to manage human workload and resources more effectively. All they have to do is enable certain modules that help them with their staff training, annual leave, sick leave, and so on.

These benefits can also be extended to the payroll management area, which allows tighter business integration and visibility. By leveraging automation, the ERP makes sure that all HR functions work according to schedule and that the overall business is on track.

3. Better Operations and Enhanced Profitability

With ERPs, plant managers can ensure plant operations are running smoothly and with a maximized workflow. If a problem occurs, the ERP will flag it immediately and alert managers can conduct changes to optimize the workflow schedule. As a result, there is minimal downtime and the production will stick to the adhered deadlines.

In turn, these optimized operations will have a positive impact on the plant’s bottom line as production increases and the production line remains uninterrupted. Moreover, by benefiting from actionable business intelligence, production issues will never turn into significant problems and production levels can stay on track. This is a significant competitive advantage in the manufacturing industry.

What’s Next For Manufacturers?

In general, ERP solutions can work together with new technologies, such as the adoption of additive manufacturing or 3D printing that is currently gaining ground in the manufacturing industry. Right now, 51% of manufacturers are actively using 3D printers in their production processes, and this number is only likely to increase in the future. And the benefits are considerable: lower costs and better efficiency in the manufacturing process.

In spite of the benefits, 3D printing cannot work on its own. Companies need a lot of data to feed into the 3D printer, and this is where the ERP comes in to make sure that companies make the most of their 3D printing efforts. It also keeps track of the entire manufacturing process — from start to finish — meaning production, shipping, and delivery.

In this context, ERPs are likely to help companies deal with the avalanche of data and make the most informed decisions based on evidence-based insights.

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How About ERPs for Manufacturing SMEs?

Up until now, SMEs operating in the manufacturing industry mostly relied on manual or a spreadsheet-type of approach to managing their operations. Perhaps they would add a consortium of software applications to streamline some areas, but the results have not been great. Most struggle with low operating margins, delayed payments, increased overhead costs, and so on. Opting for an ERP system is likely to unlock the following benefits:

• Real-time data access
• Better custom modules and tools using low-code development 
• Smooth integrations with third-party applications
• Enhanced operations with data analytics
• Optimized orders with self-service portals

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It’s All About the ERP — Or Is It?

As we have already seen, working with an ERP in the manufacturing process can unlock several critical areas for plant operators worldwide, including:

Operational excellence — work with customized strategies to achieve peak performance while driving down costs and meeting quality objectives. 

Smart decisions — use production data to inform future decisions by comparing outcomes to other benchmarks.

Streamlined costs and management — achieve top-class performance by streamlining costs and transforming operations.

Improved quality and ongoing improvement — use automation and digital technologies to unlock cost efficiencies and drive better quality management.

All these benefits sound good on paper, but they actually require hard work to make sure that the ERP actually works for you. But rest assured, we’re here to help. Contact us today and learn more about how we help manufacturing companies make the most of their ERP investment. And not just on paper — in their real-life operations as well. We’re on a mission to help manufacturers compete, in the future and beyond.