ERP in Manufacturing 2012: The Evolving ERP Strategy Abstract

ERP in Manufacturing 2012:

The Evolving ERP Strategy

Authors

Nick Castellina and Kevin Prouty, Aberdeen Group

Abstract

Enterprise Resource Planning (ERP) has been defined as an operational and transactional system of record. With its roots in Material Requirements Planning (MRP) it has long been used by leading manufacturers to uncover untapped efficiencies, reduce costs, and provide visibility to managers to aid in informed decision making. Today, 92% of Manufacturers have implemented ERP. Still, recent data finds that a successful ERP implementation goes well beyond just putting it into place. ERP, and the organization itself, should be constantly moving forward. Successful manufacturers tailor ERP in reaction to business change and needs. This can include adding new functionality or mobile access. This 7th annual Aberdeen benchmark, based on over 170 survey respondents in manufacturing, explores Best-in-Class approaches to manufacturers’ evolving ERP strategy and performance.

Best-in-Class Performance

Aberdeen used the following five key performance criteria to distinguish Best-in-Class companies:

  • 18% reduction in inventory as a result of ERP
  • 94% internal schedule compliance
  • 97% inventory accuracy
  • 97% complete and on-time delivery
  • 3.37 days to close a month

Competitive Maturity Assessment

Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics, including:

  • 56% have the ability to quickly alter ERP to reflect business change
  • 70% have cross-functional continuous improvement teams
  • 61% integrate manufacturing operations with product design

Required Actions

In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must:

  • Share data with extended enterprise
  • Provide alerts to decision-makers when certain conditions occur
  • Provide the ability to forecast and plan for demand

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