This blog is part of a three-part series on how cloud ERP enables manufacturers to achieve operational excellence. In the series, we also cover how cloud ERP helps manufacturers deliver a best-in-class customer experience and drive companywide value through adoption and digitization.
These topics and more are covered in our Achieve Manufacturing Excellence with Cloud ERP: A Practical Guide for Small and Midsize Manufacturers.
Business owners, CEOs, and CFOs know that positive cash flow is the heart and soul of rapidly growing manufacturing and distribution businesses. They constantly look for ways to incentivize faster customer payments to maintain a healthy cash flow. Whether it’s positive or negative, cash flow impacts business growth, new ventures, capital expenditures and the acquisition of investors.
Let’s take a quick look at some of the ways that a manufacturing or distribution enterprise can use positive cash flow as an advantage. It can be:
- Leveraged as an overnight loan to earn interest
- Used to expand operations or hire additional staff
- Invested in additional assets
- Focused on future acquisitions
- Paid out in dividends to shareholders
- Used to settle debts
- Saved as a cushion against future financial challenges
Without process visibility, positive cash flow becomes elusive and ever harder to achieve.
If I had to run a company on three measures, those measures would be customer satisfaction, employee satisfaction, and cash flow.
– Jack Welch, Former General Electric CEO, author and chemical engineer
Manufacturers and distributors live or die by real-time data. But how do they gain better visibility into their operations? Through cloud-based Enterprise Resource Planning (ERP) software.
How Cloud ERP Delivers Process Visibility
Cloud ERP solutions enable real-time visibility into financial and operational data, making decision making and forecasting easier and more accurate. But it does something even more profound to maintain positive cash flow. Cloud ERP incentivizes customers to pay their invoices faster through process visibility.
Full visibility into every part of your business helps you incentivize customers to pay faster in a variety of ways.
- Invoice creation is automated so businesses can invoice more frequently
- Invoices are emailed in batches so customers receive them in a timely manner
- Companies can easily trace and search customer invoice information to quickly answer customer queries
- Invoice ageing reporting options uncover customers who lag in payments and require reminders
In other words, process visibility incentivizes faster payment, which then improves cash flow.
The Benefits of Cloud ERP for Manufacturing and Distribution Businesses
When manufacturing and distribution businesses experience dynamic growth, process visibility is essential. Cloud ERP brings much needed visibility into the supply chain by enabling small and midsize companies to:
- Integrate production functionality and synchronize production, sales, financial management, and warehouse management
- Enhance customer satisfaction and cost efficiency by integrating material availability data with delivery dates, and real-time manufacturing capacity
- Eliminate the need for manual production scheduling and reduce overhead expenses with a just-in-time inventory strategy
- Deliver insight into point-of-sale transactions, shipping data, procurement and production data – all from one source of intelligence
- Use real-time dashboards and reporting options to monitor inventory at all locations and to ensure optimum stock levels
- Inform decision making and forecasting
Read more about how ERP improves inventory visibility in your supply chain.
Process visibility also helps business owners, CEOs and CFOs answer such questions as:
- How timely are our collections?
- Are our inventory levels too high, too low, or appropriate to our business?
- Are we taking advantage of all possible discounts?
- And more
Xiris Automation, Inc. of Ontario, Canada, specializes in optical quality control (QC) systems that give manufacturers the ability to detect, recognize, and interpret quality defects in the tube and pipe, automated welding, and specialty print industries.
Management at the optical QC systems manufacturer knew the company needed process visibility to improve collections and to automate planning, especially in material purchases and production scheduling. Its disconnected legacy software and manual spreadsheets meant too much information was siloed, and decision making was hampered. With OptiProERP, the company gained complete transparency into its operations, including scheduling, inventory, financials and full-featured MRP and CRM modules.
The decision to find an ERP system was based on our need to get all the information in one place.
– Maxim Fisun, Financial Controller, Xiris Automation, Inc.
Questions to Ask in Your ERP Selection Search
Looking for greater process visibility and operational transparency?
Ready to forego manual spreadsheets for automated efficiency?
Do you know which questions you should ask when reviewing ERP options?
We’re here to help. Please contact us here.