The manufacturing industry is constantly changing and is often at the forefront of utilizing new technologies. For example, many manufacturers are now using Industry 5.0 technology to help assist workers on the plant floor. And others still struggle with manual processes, QuickBooks, Excel spreadsheets, and maybe a poorly integrated inventory system. Yet with customers pushing for faster deliveries, increased convenience, and lower costs, can manufacturers stay relevant if they don’t digitally transform?
What is digital transformation, and is it necessary for manufacturers?
Digital transformation provides digital technology to improve operations, processes, and customer value.
With digital technologies prominent today, it’s hard to keep up if you’re not utilizing them. When a business implements core digital business systems, it can more easily adapt to change and meet customers’ needs. They also can improve the work environment by enhancing the productivity and accuracy of employees as well as providing the digital technologies employees have come to expect. Therefore, manufacturers should invest in technologies that can satisfy the needs of customers and employees and help them stay competitive.
When businesses invest in themselves and provide the technology that will give them a digital backbone, it helps them be more agile. It allows them to take on new challenges and opportunities. New technology helps businesses by enabling the organization to be more innovative and encouraging greater growth and change.
How does ERP help manufacturers with digital transformation?
A modern ERP system handles operational processes within a business and provides greater capabilities to meet customer needs and better compete. It allows an organization to digitally transform and incorporate other technology that can help improve business operations, such as Industry 4.0 technologies like IoT, machine learning, robotics, and blockchain, to work more efficiently and grow faster.
Since manufacturers have unique needs, they need an ERP that can handle not just front-office business functions but also cater to the production area and the warehouse, and that can help with quality control and supply chain management. Manufacturing ERP helps manufacturers meet their unique business needs to increase organizational productivity and efficiency.
Benefits of digital transformation using Manufacturing ERP
Below is a breakdown of the benefits of digital transformation from implementing manufacturing ERP.
- Enhanced customer satisfaction – Improves forecasting, planning, scheduling, quality control, supply chain management, and inventory management, all while reducing costs to provide a better quality, lower priced product on time for greater customer satisfaction.
- Faster, more efficient production – Optimizes the shop floor by allowing workers to log in and out at workstations quickly, easily view instructions, verify quality, assign workers to machines for which they are knowledgeable, and provide connectivity to other parts of the organization to keep things running fast and smooth.
- Reduced costs – Improves efficiencies, reduces waste, automates processes, and minimizes errors to reduce costs and increase profits.
- Streamlined workflow – Connects all departments, so the workflow is fluid across the organization, and collaboration is improved with one database for real-time updates.
- Increased visibility – Provides visibility into all departmental processes, retrieves data instantly, and helps you gain insight into all critical business areas.
- Improved decision-making – Gather more data, view trends, understand costs, discover opportunities, and forecast demand using business intelligence and reporting. That information helps you make better organizational decisions for more significant growth.
Challenges to introducing digital transformation
There are many benefits, as we’ve seen, but what are the challenges to introducing an ERP system for digital transformation?
- Management approval – An ERP system isn’t cheap; proving its value to decision-makers can be challenging since you can’t measure it until after implementation.
- Support of staff – It’s hard to bring new technology to a company unless employees understand its value. They may fear it will put them out of a job or be reluctant or afraid to learn something new. They may see it as a hassle that they don’t feel like dealing with when what they already have works well enough.
- Funding – To implement a new solution, especially an ERP system, is costly. Although it will bring about positive change, the budget doesn’t always allow it.
- Plant floor – Operations on the plant floor are critical in manufacturing. Anything that could delay production, even temporarily, might not be welcomed, even though it will improve it in the long run. Your vendor should be able to help you make the transition as painless as possible.
- Future plans – When you transform digitally, you must ensure it sets you up for the future. However, planning for what’s to come is difficult. Competition, the market, customer needs, and political changes come into play. It can be challenging to figure out how to incorporate these into your digital transformation strategy.
Planning for digital transformation in manufacturing
Digitally transforming your manufacturing business won’t be simple, but the benefits outweigh the long-term challenges. The need for modern digital technology will continue to increase, and so will customer demands. Here are some helpful steps to prepare your business for a digital transformation with an ERP implementation.
1. Create a digital strategy – Evaluate your business processes and determine what needs to be changed to provide a more efficient and effective organization. Your executive team will need to be involved in supporting the digital transformation efforts. Creating your strategy is essential to ensure you follow the right path and have an adequate foundation as you move forward in other steps.
2. Plan for deployment – Implementing software is not as easy as pressing a button. There is much to do, so it’s essential that you have the necessary people involved and that you have a solid plan in place. Understand the best way to roll out the software, when it will happen, and each person’s role. In addition, your ERP vendor should be able to provide you with best practices to plan for your implementation.
If you have multiple locations, it’s best to tackle one at a time. Then, once you have one site up and running, you can use any lessons learned at the next one.
3. Update processes – You will likely need to restructure some processes to work best with the system. Your implementation partner can help you map out your processes to achieve the full benefits of the software.
4. Organize your data – This is critical as you want to be sure you add accurate data to the system. If your data isn’t correct going into the system, the data coming out won’t be either. Enter it accurately initially, so you don’t have to make corrections, which can significantly slow implementation. Once entered, the ERP system will keep all the data in one database, so everyone works from the same real-time information.
5. Become customer-focused – As you prepare for your ERP implementation, determine how you can best use the software to provide an excellent experience for your customers. What can you do to make their experience dealing with your business exceptional? Remember your customers throughout your digital transformation to improve satisfaction and increase growth.
6. Train your staff – Users must be fully trained on the software to hit the ground running and achieve the greatest results. As you prepare your team for the digital transformation, help them understand how it will benefit them, the company, and your customers. Have a variety of training methods, so you have options to suit different learning styles.
Manufacturers must do what they can to maintain customer satisfaction and remain competitive. Having the right technology is essential for business growth and success. A modern manufacturing ERP system lets manufacturers incorporate Industry 4.0 technologies, improve processes, gain insight, lower costs, enhance the customer experience, and achieve greater success.