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What are the Benefits of ERP in the Manufacturing Industry?

What are the Benefits of ERP in the Manufacturing Industry?

The manufacturing sector has gone through a massive overhaul.  

Sought-after manufacturing practices encourage mobility of information, it manages growth and boosts productivity.  

Fortunately, with best of breed software solutions, it has become possible for employees to work collaboratively, no matter where they are, irrespective of the time. How is that possible? Let’s see.  

Manufacturers are now investing in high-end devices and resources, which will indeed focus on improving the response time, streamlining the business process and driving productivity while creating a collaborative workplace.   

Moreover, these devices can be integrated with a powerful ERP solution, which will allow businesses to have a 360-degree view of the entire organization. It enhances the quality of manufactured items and brings every department on the same page.  

What is ERP and how does it lead to productivity?  

ERP or Enterprise Resource Planning software comprises an array of integrated business management tools and processes, which is used to manage information within a company. It can also be aligned with the machines so that the concerned person can have an overview of multiple departments, operations, and data. Benefits of ERP in manufacturing industry cannot be stated in words.  

You’d be glad to know that as per Allied Market Research, global ERP software market is expected to rise up to $41.69 billion by 2020, registering a CAGR of 7.2% during 2014-2018 (forecast period).  

benefits of ERP in manufacturing industry

Here is a look at some of the benefits of ERP for manufacturing industry –  

  1. Improved productivity  

Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning and focused effort.

– Paul J. Meyer

ERP lets you manage the daily schedules in a timely and systematic manner. It promotes a centralized database support and helps the management to utilize every resource optimally in order to bring out the best in them.

ERP fosters refined strategic planning, prompt and diligent decision-making, enhanced speed, better synchronization and management of huge chunks of data.

Following are a few ways how ERP improves business productivity –  

  • It streamlines financial operations, manages the sales process and other departmental processes, which are the crux of a company.  
  • Enterprise Resource Planning solution provides accurate, real-time information to the concerned person and therefore, helps users navigate the process and reduce data redundancy.
  • Businesses get significant ROI by analyzing and strategizing the operations in real-time.
  • Modern employees ensure prompt communication between the employees – this encourages employee productivity.  
  • It integrates the departmental data and makes it easily accessible to the employees.
  1. Saves time and money

Reduced business cost is synonymous to higher profits and growth. This is the ultimate goal of every business owner. Right?

Thus, when tasks are automated and information is consolidated in a single platform, ERP eliminates the need for revising paper documents, searching for paper documents in files and storing these paper documents in cupboards and cabinets. ERP reduces errors, saves time and ensures no additional costs crop up.  

With a powerful ERP solution –

  • You don’t have to invest in multiple software as one will serve
  • More work can be done in less time
  • It cuts operational expenses while improving employee efficiency
  • IT team can focus more on the critical areas of business as ERP eliminates the unrequired IT costs

ERP decreases cost and improves profitability in an organization. It encourages lean manufacturing, which lowers your production costs in multiple ways –  

  • Lowers financial expenditures
  • Reduces supply expenses
  • Modernizes your marketing efforts  
  • Boosts efficient time strategies
  • Encourages your employees and their skills  
  • Retains your customers and employees
  • Improves the quality of the products – this indeed lets you meet customers’ expectations
  1. Easy forecasting and reporting

Why forecast?

  • To understand the factors that are actually responsible for enhanced sales (eg. season, trends etc.)
  • To determine optimal inventory levels (it eliminates the situation of excel inventory or stock out)
  • To boost sales and encourage better customer relationship  
  • To ensure enough stock in hand to meet customers’ demand  

In manufacturing organizations, planners usually face a crisis-like situation when their company experiences an unexpected demand for a particular product. It is the same scenario when in a slack season, the warehouse overloads with unsold excess inventory.  

Thus, to avoid such unfavorable situations, businesses prefer to use an enterprise resource planning software system, which does not disturb the logistics and the entire supply chain process.  

ERP brings sanity to the production, sales, procurement and inventory plans. It helps you generate forecast and sales reports based on history transactions. This avoids the clutter by minimizing out-of-stock or excess inventory situation.

Plus, the intelligent report capabilities ensure that the company responds easily to its complex data. Users can also run their own reports without relying on the IT personnel.  

User-friendly ERP modules make the life of planners easier and less tedious. With ERP – no more manually fetching of data and spending hours to create reports.

Users can predict future demand and design material requirement plans appropriately. Powerful BI tools make reporting simpler so that the higher-ups can get a bird’s eye view of the entire organization.  

  1. Integrated information leads to collaboration

Is your data still divided into different databases, and the data difficult to access? ERP holds the key to integrate disparate organizational data and make it easily accessible for relevant users.  

  • With an ERP, no need to invest in multiple software such as CRM, HRM, MRP, Accounting tool etc. You get all this in a single system. Data becomes centralised and easily accessible.
  • ERP eliminates redundancy and helps you maintain the consistency, accuracy, uniqueness, and quality of the organizational data.
  • Consolidated data encourages ease of use, employee efficiency, and productivity.
  • This indeed promotes inter-departmental and collaborative efforts.
  1. Enhanced data security

Data is the workhorse that powers the company’s growth. So, you cannot afford an unsecured infrastructure.  Here comes yet another benefit of an ERP system – data security. Managers and supervisors can enhance the restrictions of data based on their project and requirement.  

Whatever data you insert in the ERP system, it is secured and coded. Older ERP systems were vulnerable to cyber thefts because it required applying manual updates to every single component in the software. With new technologies, the ERP provider releases auto-updates timely and hence, this eliminates the risk of data theft.  

  1. Mobility and flexibility – increased employee efficiency

ERP market is huge – it comes with daily updates and innovation. Presently, employees can access the business data from the mobile phone, tablet, laptop or computer, located from a distant location and being on the move, you do not lose access to your ERP.

Mobile friendly ERP enables employees the easy access to documents for them to edit and approve on the go. These mobile-friendly applications for the shop floor, warehouse management etc. help floor managers and instructors to leverage information by adding the observations.

Conclusion –  

None of the companies can run successfully for long, without an Enterprise Resource Planning software system. ERP unifies the business data and makes it simple and seamless for the employees to work with. If you are keen to know more about how a manufacturing ERP can help your organization, please contact us here.