Author: Paul Henriques in: Implementations

August 11, 2023

3 Simple Reasons You Need an ERP

Manufacturing is going through its fourth revolution. This is the start of Industry 4.0, where more and more systems and services are becoming automated or digitally assisted. These digital transformations are changing the way companies operate and deliver value to their customers.

With manufacturing giants digitally transforming by adopting new technologies, such as an MERP (or Manufacturing ERP), Machine Learning, Artificial Intelligence, and Digital Devices to improve their operations and drive growth, Small and Medium sized enterprises can no longer afford to be left behind. As a result of the massive changes to the sector, Manufacturing SMEs need to implement new digital technologies to become more agile, more efficient, and more productive and compete in the global market.

Entering a New Age with ERP

The first step in moving forward into Industry 4.0 is implementing a state-of-the-art ERP, sometimes known as ERPII, or ERP+MES. An ERP is the central brain that connects and improves all the disparate digital and autonomous functions at a manufactory.

There is a difference between the various ERPs on the market. Many will offer core items at a price with add-ons, or modules, and customizations added at a higher cost. Regardless of how it is done, a new MERP can unify all your various software solutions into one single database with all your data shared across your teams. By having Finance, Sales, Service, Planning, Purchasing, Production, Shipping, Quality Control, Maintenance, and Warehouse Management all in the same system, you can break down corporate tribalism, improve data quality, decrease time spent on process bottlenecks, improve business performance, and make better decisions.

Standardizing Practices

When you implement a industry-specific ERP, one of the better side-effects is standardization. By adding an ERP that was made for your type of business that touches all parts of your shop, you will have the possibility to standardize your processes and workflows to what is most common in your industry, based on best practices. For example, an MERP will have modules built for manufacturing, like maintenance, inventory management, scheduling, and quality management, that are made for you and will improve the way you do things.

Another benefit from standardized practices is a decrease in onboarding time. Whether you hire new talent or promote from within, both types of employee will have more familiarity with the role due to previous experience in a similar system and with similar practices.

Centralizing your Data

A single platform with a single point of truth integrates all your business units, their tasks and processes, and their data. Having that one location to check for any information brings with it a perfect view of your current status. An ERP that is built for your industry will provide you with notifications, dashboards, and reports that you can use to get a complete picture of your operations and compare the resulting KPIs (Key Performance Indicators), to industry-standard benchmark values.

Your ERP should collect data from all your many points, including shop floor data, and present it in an easily understandable way that can let you take any required actions sooner. These capabilities can be further improved by providing a system that can be securely accessed from anywhere by those that need to take action or make decisions. Also, the single database means that you greatly decrease the chance of data errors when inputting data or data bring corrupted when exporting and importing between systems.

To summarize, an ERP will give you:

  • Real-time updates
  • Live tracking and monitoring
  • Better data
  • Better decisions

Improving your Communication

Having all your business units using the same system can benefit the way you communicate within your firm. Instant access to real-time information can reduce or remove many of the manual communication processes within your firm. This will improve how your teams:

  • Talk to one another and collaborate
  • Share information with each other
  • Make decisions and personal autonomy

Your vendors and customers will also feel the benefits of improved communication with tools like EDI, more personalized communications, automated document creation, and digital form recognition. By having access to real, actionable, data, your teams can improve their communication to your external stakeholders with accurate inventory information and regular updates, which will help you build more valuable relationships.

Conclusion

Implementing an ERP will help your business be more competitive, which will help you grow. This is achieved by standardizing business practices across your process, adding a single database as a central point of truth for all your operations, and improving how you communicate and receive notifications from all your staff, your work centers, your suppliers and vendors, and your customers.

With advancements in technology, and a decrease in its costs, an ERP is no longer a good-to-have but, rather, a cannot-do-without. Improving your productivity and efficiency while minimizing costs is the only way to stay competitive in the global market. When looking for an ERP, pick one that was built for your industry so that you can receive the benefits sooner and position yourself as a forward-thinking company that knows and uses the benefits of new technology.

Agree/ Disagree? Tell us what you think below!

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