ERP for the Manufacturing Industry

What is ERP?

Enterprise Resource Planning or ERP is organizational management for a business that manages the business through a series of system integrated applications. ERP software collaborates all aspects of business operations namely, product planning, development, manufacturing processes, sales, and marketing.

ERP works as a multi-functional enterprise system which operates through a suite of software incorporations that allows for the smooth functioning of business operations. ERP software provides real time view of the integral processes of a business such as production, order processing, and inventory management, tied together through intrinsic integration through a number of applications which share the same database.

In simpler terms, an ERP software connects the business owners and executives to relevant information which they seek. It also creates new information through data analysis and manifestation for the effective multidimensional running of the business. Research has demonstrated that during the growth phase of its lifecycle, a company has to rely on technology for a J-curve growth. The technological improvements within a company also prevent it from hitting a plateau. ERP software is an example of such technological incorporation which tracks business resources (such as cash, raw materials, and production capacity) and the status of commitments made by the business (such as customer orders, purchase orders, and employee payroll) irrespective of the business department.

Demand and supply can both be facilitated using ERP software. An ERP software also allows for synchronization between both of them, thus smoothening the entire business operations.

The manufacturing industry

The manufacturing industry is highly competitive and violently dynamic in nature. Problems are known to spring up every now and then and before you solve one problem, another one erupts. Therefore, it becomes necessary for the runners of a manufacturing firm to install such a service which not only diminishes and solves the existing problems but also identifies future threats and suggests measures to eradicate them. All this while increasing profits while improving productivity.

How Can ERP help the manufacturing industry

Among the innumerable benefits of ERP for Manufacturing Industry, the major ones are as follows

  1. Streamline business process through great flexibility

 A comprehensive ERP solution is driving force behind automation in any industry. Since all business related information is available in a centralized platform, unnecessary intermediate steps are eradicated, thus streamlining the entire operation. A complete ERP solution provides coherent collaboration between development, designing, inventory, procurement, production, finance, sales, delivery and more. Moreover, production status can be viewed in real time. Such a beautiful amalgamation of processes brings efficiency into the system, smoothens the operations and allows the company to deliver on promises. The reduced dependency on manual labour improves accuracy and overall technological state of the organization.

  1. Quicker response to market conditions

Real time data analysis through ERP helps the business to prepare, plan and estimate for a change in market conditions. Decisions can be based on statistical evidence and not gut instincts. ERP allows for data manifestation and preparation useful reports based on the collected data. These reports can be analyzed an referred to while making any difficult decisions. Such decisions are quick and well thought of. Studies have shown that a decision made on statistical evidence is three times more likely to prevail. The data analysis we just mentioned also allows managers to remove forecasting errors.

  1. Strategic decision making

An ERP software implementation that is comprehensive hastens the decision making ability of an organization, without compromising on the quality of decisions. Insights given by the ERP software help the business owners and executive make informed decisions. The key feature which allows for this is data access. Data related sale, orders, purchase, inventory, attendance, accounts, etc help the benefactors to make quick decisions. A central information conduit makes it easier to gauge if the internal decision and company’s vision fall in the same line.

  1. Reduction in costs

Organically, ERP software does not alter the cost of production in any way. However, ERP allows for such smooth collaboration between the factors of production which maximizes the resources and reduces wastage. Moreover, by fastening the production time and decision making ability, there is ample time for disposal. This time may be devoted to increase production or formulate strategic plans for business development. The effective integration of inventory management into ERP software removes the fear of overstocking and stocking less. This saves money for the organization. Better visibility of all operational procedures makes saving possible wherever there’s an opportunity.

  1. Thorough customer satisfaction

Advance planning, inventory control, streamlined operations, improved coordination between the factory of production and shipment tracking allow the company to make consistent on time deliveries to the customers. Moreover, quality management through batch inspection ensures that the quality of the finished products are consistent and at par with the industrial standards. All of this ensures that the customer is satisfied with service as well as the product. Satisfied customers are the keys to expanding the business. Strong word of mouth and repeated order make the organization more profitable in the long run.

The benefits of an ERP system are plenty and not just restricted to the ones mentioned above. Probably the best part of ERP is that it is completely customizable to suit the needs of every organization. In the era of globalization, ERP allows a company to develop an international outlook while keeping it true to its origin. There are a number of ERP implementations in the market. Be sure to choose the one which caters to your organization.