Manufacturing ERP can allow your employees to see how progress is occurring across the supply chain.
Most ERP systems contain a data visualization feature that allows staff to quickly take a peek at data points and gain actionable insights. For example, you might have a visualization that shows which materials are in transit to your distribution center.
Some systems also contain project management functionality, which enables users to see the tasks that employees are working on and to use this information to allocate labor resources as needed. Project status can be updated, and budget requirements can be altered based on current tasks that are in process and estimated cost and completion time. ERP manufacturing systems may include the following workflow visualizations:
- Inventory levels
- Project status
- Employee schedules
- Machine downtime
- Customer conversion rates
- Number of leads closed
- Percentage of packages delivered on-time
Having data accessible in one location is a key benefit of ERP manufacturing. With centralized data, one can easily analyze information across departments and workflows to form a more holistic view of a company. For example, users with appropriate permission levels in the system could look at finances segmented by department and measure profitability, operating cost and how much of the team’s fiscal year budget has been spent.
Another key benefit of holding a centralized data repository is that it makes pulling reports easier and can help users gain statistical insights that may not have been possible in a siloed system. This alleviates the time spent searching for data and enables users to gain insights across the entirety of a business.
ERP manufacturing often provides automation of specific tasks. This automation can streamline business processes by performing tasks such as the reordering of materials based on inventory levels. When you spend fewer human resources on tasks that have the potential to be automated, your employees get more time to spend on other business processes.
Other workflows that can be streamlined include employee payment, notification of delivery and email marketing. Automation technology enables companies to facilitate important processes more quickly and therefore increase organizational productivity.
Reduce human errors
Reduced human error is another benefit associated with manufacturing ERP automation. Unfortunately, human error is incredibly prevalent and can negatively impact businesses. By removing tasks such as manual data entry from the equation, you can ensure fewer internal mistakes and improve the likelihood that data integrity is high.
Some systems can also detect and clean duplicate data entries to help ensure that statistical insights are accurate. This can help alleviate the need to comb through data points to make sure that each one is correct before sending off an important report.
Create better customer experiences
Ultimately, ERP is meant to make business processes easier and faster so that you can retain and obtain customers. For example, you might see speedier shipping times with ERP manufacturing. Improved service leads to happier customers and can boost customer retention.
Many manufacturing ERP vendors either include CRM (customer relationship management) tools out of the box or through offered add-on functionality. This may include capabilities such as interaction tracking and purchase history so that sales collateral can be better targeted. Once your collateral is narrower in reach, sales personnel can provide users with a more personalized experience, therefore improving rates of customer retention. Some additional CRM functionality includes:
- Database management
- Contact management
- Lead management
- Marketing and sales management
- Sales automation
What Is ERP?
When looking into ERP manufacturing, it’s important to discuss and define what enterprise resource planning software is as a whole. ERP solutions are a way to consolidate data and workflows into one unified system. Its main benefit is the desiloing of data. One of the benefits of this unified data hub is the generation of new insights through the interconnectivity of systems. For example, you might be able to track how shipping time affects a customer’s likelihood to purchase goods or services from your business on a repeat basis. This would be possible through the integration of CRM and distribution modules.
In addition to the centralization of data, ERP systems also assist in the automation of various business tasks. By connecting different departments and workflows, day-to-day tasks can be streamlined through elements such as automated file transfer and push notifications. The specific features that you connect and include in your ERP solution are personalizable and dependent on your business needs. This is especially beneficial because you don’t have to waste time or money on features that aren’t relevant to your business.
What Is ERP Manufacturing?
ERP got its start as manufacturing software and therefore contains a lot of modules that are relevant to the manufacturing and distribution industries. However, manufacturing ERP didn’t always function as it does today. Manufacturing ERP came into existence in the 1990s as an offshoot of MRP, or material requirements planning software. You might have heard of MRP while conducting your software research, as it remains an option in the software industry.
The big difference between ERP and MRP is scope. MRP is solely focused on manufacturing tools, whereas ERP is more widely applicable to business functions that aren’t related to the manufacturing or distribution process. For example, ERP software often contains tools for operations such as accounting, customer relationship management and project management. Manufacturing ERP modules are integrated with front-office tools to generate data and reflect information across workflows. For example, if you order two units of lumber, an integrated ERP might take that information and automatically record it in your accounting program. On the other hand, MRP software solely focuses on manufacturing processes and therefore is less integrated than an ERP suite.
What Are Some ERP Manufacturing Features?
Now that you are aware of some of the benefits associated with ERP manufacturing, we can examine some of the specific tools that are available. You should note that the availability of these functions varies from vendor to vendor, so make sure to write down any features that specifically stand out to you.
A popular feature of ERP manufacturing is demand planning. This function uses internal and external data and events to create an efficient fulfillment schedule. The goal of a demand planning tool is to reduce the amount of excess stock on hand while also maintaining the ability to fulfill orders on time.
Warehouse management tools contain a variety of features. For example, if your product has an expiration date, the warehouse management system can keep track of when those dates are approaching so that you can discount that product accordingly in an attempt to generate revenue and reduce waste. This tool may also improve the traceability of products and reduce the likelihood of errors associated with shipping and handling.
If you get audited, you’ll be glad that you had quality management functionality on your side. This tool can keep track of audit trails, trace lot and serial numbers, and keep track of certificates of conformance among various other tasks. It also can help ensure that you meet regulatory standards pertaining to material use and item quality.
Optimizing and keeping track of your product and material inventory is the meat and potatoes of your business. This tool may contain functions such as serialized inventory control, detailed transaction logs and cost standardization.
When coupled with automation, you can reorder materials instantly based on levels set by users while also predicting inventory needs based on historical demand. This helps reduce spoilage and optimizes your warehouse space by only holding items in inventory that are going to actually be sold or used in the development of a popular product.
Shipping and Distribution
This feature is incredibly important because it supports the stage in which customers become involved in the manufacturing process. For example, if you ship icing tips to a cake decorator a day later than projected, the customer may be unable to make that special princess birthday cake for his daughter’s birthday. This negatively impacts a customer’s perception of your business and may even lead to bad word of mouth. Shipping and distribution tools may also contain functions such as the ability to respond instantly to customer delivery status requests and the ability to track shipments in real time.
The labeling function can automatically print labels as products move across the supply chain. This feature may also support printing of tags that contain information such as special characters and barcodes while also making it easier for users to select different label sizes or layouts.
Labeling is especially important when it comes to RFID tracking, as these tools can help you visualize the geographic location of products and supplies in real time. With these tracking capabilities, you could trigger automatic notifications to customers when an item reaches its final shipping destination.
Factors to Consider Before Implementation
There are some aspects to keep in mind before taking the plunge on manufacturing ERP. Factors such as cost, deployment method and vendor experience should all be taken into consideration when selecting a vendor. Here are some of the elements that you will want to look at when you’re searching for the best ERP software for you.
Developing a software budget is essential to a successful implementation project. It’s no secret that ERP software can be expensive, so make sure you can afford a system that includes all of the components you need.
Depending on the current software that you use, you might prefer either on-premise or cloud-based ERP software. There are pros and cons to each of these methods. For example, on-premise ERP software has a higher installation cost than cloud-based ERP. Many vendors are beginning to offer both deployment methods, but this element should still be a factor when you’re considering vendors.
Vendor Industry Experience
When looking at ERP manufacturing vendors, you should inquire about how much experience the vendor has in your specific industry. Because ERP has such a wide variety of functions available, you will likely prefer to go with a vendor that has dedicated experience in the manufacturing or distribution industry. If a software company does not have much experience in your industry, it might be best to move along to the next option.
Manufacturing ERP vendors differ in terms of the company sizes that their solutions best cater to. In addition to asking vendors about industry experience, you should also inquire about how large the businesses that they typically work with are. ERP software for small companies wouldn’t work for an enterprise, for example. You should also note whether the scalability of manufacturing ERP aligns with your projected organizational growth.
Another essential factor to consider is whether or not training is included with an ERP manufacturing system. Training is often a separate cost that you will need to account for in your software budget, but it’s important to note whether vendor staff conducts the training or if you will need to hire an independent ERP consultant.
IT Resource Allocation
Making sure that all of your employees are on-board with the new ERP system is integral to a successful implementation. This is especially true in regards to your IT department. Your IT staff will be a general point of contact for your employees in regards to implementation challenges and questions, so it’s crucial that they are knowledgeable about your new ERP product.
Additionally, you should make sure that there are IT resources available before, during and after implementation to improve the likelihood of a smooth transition. A 2018 study from Panorama Consulting found 66% of surveyed companies experienced operational disruption when implementing their ERP.
How Do I Know if It’s Time to Implement Manufacturing ERP?
ERP manufacturing is incredibly beneficial to businesses. However, it’s important to first determine whether this type of software applies to your specific company and if there’s potential for a high ROI. It might be time to implement manufacturing ERP if your business is growing steadily and you are noticing a slowdown due to a volume increase. Enterprise resource planning software might also be beneficial if you have noticed human error affecting the company.
If your company relies heavily on manufacturing and you haven’t automated any tasks yet, manufacturing ERP can free up employee time to work on other projects. You might wish to speak to employees in your manufacturing or distribution departments to learn how much of the day they spend on tasks that can be automated. If a large amount of time is spent on processes that could be streamlined through technology, then it’s likely your business would increase productivity through manufacturing ERP.
ERP software could also benefit your company if user error is prevalent in your manufacturing processes. As mentioned above, user-generated mistakes are a huge issue when it comes to productivity, so if you have noticed its existence in your business, it might be time to consider automating functions that have a high probability of human error.
How Do I Select an ERP Manufacturing System?
There are a few crucial factors to consider when selecting the manufacturing ERP system that’s right for your business. You should analyze elements such as deployment method, operational needs, your company’s budget, industry and size. These components can make or break manufacturing ERP vendors on your shortlist.
The process can be daunting, which is why at SelectHub we’ve created a user-friendly requirements checklist to help you find the vendor that checks off all of your manufacturing needs. We’ve got a range of resources to help you learn more about these software systems, no matter how far along in the decision-making process you are. Check out our Manufacturing ERP Requirements Checklist and our list of industries served by manufacturing ERP to get the information you need to make the best software selection possible.