Enterprise resource planning can help organise inventory, prepare for customer demand and improve productivity.
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From better inventory management and productivity, to improving quality and lead times, companies with manufacturing operations are constantly looking for ways to improve efficiency. However, this requires coordination across the entire enterprise, from the back office to production.
Without achieving synchronisation across all operations, manufacturers cannot effectively manage fluctuations in demand, increasing competition, and supply chain issues.
Although many manufacturing companies already have multiple software’s installed manage their operations, relying on several vendors for different processes can become extremely costly.
Fortunately, there is an alternative that allows all processes to be operated through a single, streamlined solution that listens to your business’ unique needs. With this in mind, here are six ways enterprise resource planning (ERP) software can revolutionise your manufacturing process.
Optimise Inventory Management
There are two sides to inventory management - materials and product inventory.
Materials management is the processes that go into ensuring an organisation has the appropriate materials to complete the manufacturing process; whereas product inventory includes the products that are produced through the manufacturing process and how they’re transported to customers.
However, if these two equations aren’t synchronised, difficulties might arise with having the appropriate materials at the right time and product levels being incorrect or insufficient to satisfy orders.
By implementing ERP software, processes such as billing of materials, tracking materials and inventory management can be updated automatically - for smaller manufactures, these are most likely updated manually through spreadsheets; which are prone to human error.
Introducing an ERP system can help reduce these human errors and automate inventory requirements so that materials always arrive when needed, instead of taking up space your business can’t spare.
Prepare for Customer Demand
When data is tracked manually and historically, it’s difficult to tell what levels of inventory are necessary from one term to another. The business can make an educated guess based on previous data, but this doesn’t account for current changes in the market.
With an estimation about customer trends, it doesn’t account for deviations in customer history, for example, if one of your business’ top clients, goes out of business and you’re working on an estimated guess, the results will be costly.
With a manufacturing ERP system, it will alert your business to these significant changes in customer demand, both from previous data and real-time. This makes it much easier for accurate future customer demands.
Refine Human Resources
Refining human resource operations with training and attendance tracking can also have a positive impact on your business operations. By integrating human resource management (HRM) and your ERP system, your business can automate many of the paper-based admin tasks facing your HR department.
Which will allow HR to focus on the development your businesses workforce, which results in a huge win for saving time and optimizing human resources.
A good HRM can be crucial to maintaining a lean workforce who on a daily basis respond to many challenges. Your business will be rewarded with employees who are more committed, inventive and productive.
Streamline Collaboration with Customers and Suppliers
ERP can optimise business processes and drastically improve response times. This will improve virtual communication across the supply chain and internal communication between unrelated departments. This can have a positive impact on collaborating across your business.
With these close collaborations with partners can mean that specific challenges are met in a timely fashion.
With a quick response to change, it can ultimately improve your customer relationships is just one of the ways ERP software can impact as a continuous business improvement tool. By finding important information with satisfaction, your business will be more prompt in leveraging development opportunities.
If a process is definable and repeatable, then chances are it’s better off automated.
ERP systems such as Pegasus Opera integrates quality control and manufacturing management – purchase invoices matched against goods, job profits can be assessed and stock control managed all from one place; creating a streamlined, cost-effective manufacturing solution.
The time saved through automation can then be reinvested into your business for other projects that are more pressing.
Improve Employee Productivity
Businesses that still try to run their manufacturing by using manual processes are more likely to have high labour costs. The same can be said, however, for some lean manufacturers too. Even in a lean environment, these indirect labour costs can be a potential problem.
A great ERP system can help businesses improve these processes and efficiencies so less labour time is required to complete the same amount of work. Additionally, an ERP that can automate manual process, freeing up more labour hours that can be reinvested into higher-return activities.
In the past, ERP software was a system many manufacturers wanted to make their everyday processes more efficient.
To stay competitive, however, manufacturers need to now invest time and money into ERP software to optimise inventories, be aware of customer demands, automate processes and more. It’s only with these capabilities that a manufacturer can streamline processes and stay in competition.
Martin Craze is founder and managing director of Applied Business, a business management and accounting ERP system consultancy.