Manufacturing businesses are always looking for ways to cut costs, increase efficiency and productivity, and have a better understanding of their market. Enterprise resource planning systems (ERPs) are solutions that encompass supply chain and inventory management, accounting, manufacturing, and many other aspects of day-to-day operations. The best part: many modern ERPs allow businesses to access data for all of these departments in one centralized location.
Many businesses are on the fence about introducing an ERP into their operations because they believe that implementing them can be expensive or difficult. However, this is not the case. ERPs have a fast return on investment and can be seamlessly integrated with your organization. In this blog, we will discuss 13 ways that implementing an ERP system can benefit a manufacturing business.
- Automate and streamline your workflows & processes
ERP systems automate and streamline company processes by storing real-time data in one centralized location while allowing for complete insight into all operations. They eliminate the need for assistance by other team members when end users are monitoring production statistics. This greatly reduces the risk of any miscommunication and allows employees to be more productive in their roles.
Using an ERP in manufacturing also reduces the need for manual procedures which, in turn, results in accelerated production, lower probability of errors, and increased profitability. - Easy reporting
Real-time reporting is one of the biggest benefits of using an ERP. Reports can be easily customized along a variety of functions (like procurement, accounting, engineering, etc.). Not only do ERPs hae the ability to track KPIs across these departments, they also allow the ability to compare those departments to understand what is driving business and what may be holding it back.
Receiving data in real-time as sales are happening and components are being used is essential to making fast, informed decisions about business operations. - Better decision making
When making decisions about your business, you want to be as informed as possible. An ERP has the ability to collect and sort essential data into a single location while ensuring that it always remains up-to-date. For example, an ERP can allow you to see information about profitability, costs, and expenses in real-time. This can help leadership to identify and solve problems as they are occurring instead of finding them after the fact and wasting time and resources.
ERPs can also give leadership a detailed overview of each team and the business cycle, giving them the ability to view situations accurately. - Increased employee efficiency and productivity
A good ERP solution has the ability to identify areas that could benefit from efficiency overhauls. Many have the ability to manage schedules, streamline financial operations, reduce data errors, oversee sales, produce real-time data, and ensure prompt (and up-to-date) communication between employees and departments. Implementing one is guaranteed to find ways to save employees time that is normally wasted doing tasks that can be easily automated and allow them to focus on improving production times. - Improved profitability
Many executive decision makers have an idea of the factors that drive profitability but they do not have the ability to dive into the nitty-gritty details. ERP solutions help managers to zero in on the exact details that matter the most. They allow business leaders to identify activities that are driving the largest margins (as well as the activities that are losing profits).
For example, in manufacturing businesses, costing always has to account for labor, materials, scrap, machine time, and setup time. By identifying which of these areas is the most and least efficient, managers are able to adjust accordingly in order to maximize profitability.
- Integrate with your supply chain
Some ERP systems offer supply chain management resources. These can optimize the inflow and outflow of materials. They can also optimize distribution requirements for centralized purchasing locations as well as multi-warehouse distribution channels. - More adaptable to market changes
Because ERP systems offer real-time data, they allow decision makers within a business to forecast, plan, adjust, and respond to the ever changing markets they operate in. Most softwares have the ability to generate detailed reports on a regular basis in order to help with the overall understanding of the market. These reports help to reduce forecasting errors and capitalize on consumer purchasing trends so manufacturers have the opportunity to grow their businesses. - Reduced cost
Reducing the overall costs of operations is one of the best ways to increase a business’s profitability without increasing the price of the finished product for the customer. Because ERP solutions offer such in-depth insights into the operations of many different departments in manufacturing companies, they can help to identify problem areas that are raising the cost of operations.
Say, for instance, that an ERP system is implemented and leadership notices time is being wasted by searching for inventory. Some ERP solutions, like COUNTERPART®, also allow for features like inventory location tracking. Inventory location tracking allows the user to be able to see a component’s real-time location. This reduces the costs of wasted time searching for components as well as the cost and risk of shrinkage. - Superior customer relationships
Increasing efficiency and productivity while simultaneously reducing costs are not only beneficial to a manufacturing business’s bottom line. They also nurture relationships with customers and allow businesses to become a trusted name in their market. An increase in productivity coupled with greater visibility of inventory and supply chain management means that companies are able to fulfill customer orders faster. Customers are left satisfied that they received high quality goods in a convenient time-frame at a reasonable cost. Happy customers are more likely to become repeat customers and increase business by word-of-mouth. - Manage cash flow
An integrated ERP manufacturing solution allows businesses to better manage their cash flows. It has the ability to produce planning and purchasing reports, get real-time information on what is coming in and out of the business, and follow up on past-due invoices. Accounting personnel and leadership will always know where the cash flow stands because every transaction will always be recorded without delay. - Reduce Redundancies
Redundancies are one of the biggest contributors to manufacturing headaches. They double the work, the cost, and the time needed to successfully complete an order. Having three different employees enter the same information into three different systems is time-consuming, tedious, and allows for too much room for error. An ERP system eliminates the need for repetitive, manual tasks, thus freeing employees up to efficiently and effectively complete projects and manage their time. - Improved business insights
When quality management, project planning, simplification, and sales chain alignment are done quickly, it is easier for businesses to increase output. ERPs give precise data so management always has a realistic view of where inventory levels currently are and where they are likely to be in the future.
An ERP program, like COUNTERPART® can help manufacturing industries improve profitability by improving their insights into their company’s operations. - Data security
With cybercrime on the rise, manufacturers are becoming an increasingly enticing target. Keeping confidential information confidential is crucial in protecting a business and maintaining the integrity of customer relationships. Modern ERP systems give organizations the benefit of having all of their data in one place while securing it with a proven system that safeguards its confidentiality. Improvements in software, solutions that offer round-the-clock monitoring by experts, and frequent back-ups are all substantial data security benefits that ERPs supply.
Now you know the major benefits of using an ERP system in your manufacturing organization. But, with so many options available, how do you choose the right one? At COUNTERPART®, we want to be an ERP solution for your business needs, not just a system to implement. Schedule a demo today to kickstart your journey to efficiency.