Discover eight ways an ERP will put your manufacturing company on the road to success.
If your company plans to grow, it must take steps early on to lay the foundation for that growth. No step is more important than the decision to select and implement an enterprise resource planning (ERP) system. ERP is not just accounting or materials planning, as some people believe. ERP software encompasses automated processes that touch every aspect of your business, from managing inventory to order entry, shipping, procurement, quality management, and reporting. In short, an ERP solution helps you become more efficient, ensure regulatory compliance, improve customer service and on-time delivery, and effectively use your resources, machine and labour alike. Read on to learn more ways in which ERP will put your manufacturing company on the road to success.
1. Create Efficiencies
If you’re running things manually via Excel spreadsheets, scheduling whiteboards on the floor, or paper documents everywhere, you might find it hard to enforce common processes across your organisation. Chances are your employees are using their self-taught methods, which limits flexibility when it comes to cross-training people and providing coverage should someone leave the company, be away for an extended period, or simply just go on vacation. ERP helps you manage these resource constraints and optimise throughput. It will help you automate tasks so you and your employees can shift focus to value-added activities and be more efficient and productive with your time.
2. Consolidate Disparate Databases
If there is a lot of paper moving around your company, but very little real-time data sharing or communication occurring, managers in your company probably feel a bit out of the loop, too dependent on other areas of the business, or may simply be running on assumption. A cloud-based ERP solution can help. ERP provides a single source of truth and enables you to improve communication between departments. Instead of storing important documents and spreadsheets on personal computers, you can house all your important documentation in a centralised database. Cloud ERP provides a fully integrated technology environment, where databases for customer relationship management, accounting, quality, production, and more are all connected and talk to each other. Your employees can now see everything that is happening across the business that can affect their department or individual performance, enabling them to make better decisions in real time.
3. Manage Compliance and Regulatory Requirement
Do you operate in a regulated industry such as electronics, medical devices, or food processing? If so, missing quality and compliance standards can lead to large fines as well as unhappy customers or simply lost business due to the inability to win contracts. ERP helps you avoid such situations by helping you define processes to manage regulatory requirements and deal with compliance issues. An ERP system makes it easier for you to keep detailed records of all activities for audits and other historical purposes without the fuss of tracking everything by manual processes. With ERP in place, you can rest easy knowing that your team is adhering to proper procedures.
4. Conduct Accurate Material Planning and Control Inventory
Perhaps you have trouble maintaining accurate inventory counts and your physical counts seldom match your perpetual inventory records. This wreaks havoc with your production efficiency since parts are not available when you need them due to stockouts or priority customer jobs requiring the parts instead. Now you’re dealing with delivery delays that upset your customers who will eventually find a vendor that has a better handle on their business. With an ERP solution in place, you can improve your on-hand inventory visibility, increase accuracy, and reduce overhead. As a result, in only a short period, you’ll start to see planning, scheduling, and customer service improvements.
5. Enable Growth
Many companies feel that using spreadsheets or manual lists is enough to manage their business, but this decision may make growth a slower and a more painful process than it needs to be. If you’re struggling to keep up with the increasing demand for your product because of inventory issues, lack of resources, or unreliable information, ERP can help. By putting an ERP system in place, your company will not only be able to better manage your inventory and resources, but you’ll also have access to more reliable information upon which to base important business decisions that will fuel growth. And if you’re thinking you can’t afford an ERP system, that’s simply not the case. If you choose the right vendor, ERP is affordable, even for a small business.
6. Accurately Cost Your Product
An ERP solution will help you quantify the cost of labour, time, and equipment to understand exactly how much material and labour every order, part, and operation consumes. Use ERP to track cost variances for material costs, labour costs, and purchase costs. Your accountants and auditors will be able to see a full range of reports and enquiries that will help them analyse cost performance and easily compare actual costs with planned costs. This accuracy will also enable quicker quoting and estimating with historical data that matches the job being quoted, and ensure you get the right profit margins on every job instead of absorbing unplanned costs and variables mid-production.
7. Deliver Product on Time
Your customers expect to be given reliable shipment and delivery dates when they place an order. They do not want to wait for a call-back, and they won’t accept bad dates for too long before they move on to another supplier. . ERP gives you available-to-promise capabilities so your sales and customer support teams can better manage opportunities and provide accurate delivery information from the start. Material requirements planning (MRP) and production scheduling capabilities provide the information your teams need to make decisions on expediting, overtime, or other factors.
8. Easily and Efficiently Create Meaningful Reports
Manual systems are prone to error. Without an ERP system in place, you may find that your business information is not reliable. You (or others at your company) may also be relying too heavily on guesswork or “rules of thumb,” which can lead to ineffective decisions. An ERP system such as JobBOSS2 will help you combat these challenges by collecting a robust amount of data that can be used to build meaningful reports. With those reports, you can achieve the level of transparency you need to make sound business decisions.
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