Eight Reasons Manufacturers Need ERP

two people working

In addition to improving both productivity and profitability, there are underlying reasons why your company should purchase an ERP system. Let’s look at some of the key improvements your business will likely realize once your system is implemented:

1. Real-time data access: One of the greatest benefits of your ERP system is that it will permit real-time access to all your business data and information, which is (in an up-to-date solution) secure and cloud-based. This lets your personnel, as well as authorized partners and vendors, see business-critical, up-to-date information in real-time, so that all stakeholders can make informed decisions and take informed actions. It also eliminates the need for time-consuming communications to find out information that is now visible in real-time to all authorized users.

2. Centralized data: While your ERP system increases productivity, it also eliminates the costly errors associated with manual, decentralized, and non-digital processes. This results in time, money, and resource savings, because your integrated ERP solution will help your staff utilize their time more effectively and efficiently. With your ERP system, users no longer must hunt for a piece of information across multiple and disparate systems. Instead, by accessing a centralized and integrated database, needed information is much easier to locate and retrieve.

3. Better business insights: Closely related to having access to real-time analytics is that your critical business decisions naturally improve. Your ERP system frees your team from having to work across multiple spreadsheets, charts, and graphs with an all-in-one system. The result is consistent, reliable, timely business decisions, based on actionable insights into your operations, revenue streams, customer base, and orders.

4. Improved business operations: Another key feature of an ERP system is that it helps to reduce costs, increase overall efficiency, and improve the flow of products through your manufacturing system. ERP does this by streamlining processes within and between business functions. This benefit, in conjunction with flexible cloud-based delivery, allows you to customize the software to your changing needs and seamlessly scale as your business grows.

5. Inventory tracking: One major challenge for growing companies is the accurate tracking and monitoring of their expanding inventory. ERP systems use barcoding, radio-frequency identification (RFID) tags, and serial numbers to track your inventory at every level of the supply chain. These tools can help you in a variety of ways including tracking of inventory levels at different warehouses and seeing which merchandise is stored on shelves, in transit, and has been received. Another major benefit is increased visibility of inventory in warehouses, by precise locations, making it much easier to pick, pack, and ship.

6. Streamlined manufacturing processes: Closely related to managing your inventory, ERP systems also help manage your manufacturing functions. They provide transparency into all your manufacturing operations, including raw materials and component ordering, and shop floor operations. The result of this awareness is optimization of production schedules, equipment, and labor to achieve maximum capacity without unnecessary expenditures for new production equipment.

7. Asset management: ERP systems also manage your bill of materials (BOMs) and fixed assets because users can easily create and edit BOMs and keep track of all changes. Because an ERP system helps to manage fixed assets, users can easily schedule needed maintenance on equipment, which results in less unplanned downtime.

8. Customer relationship management: One of the most important benefits of your new ERP system is its likely impact on customer satisfaction. We all know that the best way to improve customer satisfaction is to deliver what customers want, when they want it, and at a price that they feel good about. ERP systems have raised customer expectations across industries. Your ERP system will help you deliver on these expectations. and many systems are equipped with a customer relationship management (CRM) module or feature. This software helps your team to see your customers more holistically to create internal consensus around what they want and need. Using CRM should yield an improved sales strategy, including stronger lead generation for future sales.

Bob Sproul

About the Author

Bob Sproul helps businesses across the manufacturing spectrum improve their operations for more than 40 years.