How ERP can address non-production inefficiencies

///, Manufacturing Productivity/How ERP can address non-production inefficiencies

For many businesses, the concept of an ideal manufacturer comes from being as efficient and effective as possible during production, distribution and fulfillment. This perception comes from the fact that operations are centered entirely on those three processes. As a result, many of the advancements in improving the industry come from enterprise resource planning and warehouse management systems, along with techniques such as Six Sigma and lean concepts. However, manufacturers are more than just factories in modern times. There are also core elements such as marketing, sales, accounting and finance, among other non-production elements. Having software like a Microsoft Dynamics implementation can also address issues in these fields very quickly in ways that are just important as making the assembly line as effective as possible.

Workers faster than sales reps
A significant problem with manufacturing operations is the lack of movement dealing with inefficiencies within management. Concepts such as lean and Six Sigma are not necessarily limited to the factory floor. Business consultant William Heitman related in a column for IndustryWeek how one company was so disorganized at handling sales that booking, receiving and placing an order for a single product took 20 percent longer than it did to actually make and deliver the goods. It demonstrates that bottlenecks can occur outside the realm of the production chain. What it also shows is that making a company more productive at operations requires changes and improvements in every aspect that deals directly with the business model, from executive management to marketers promoting the product.

The need for change is especially prudent in finance and accounting. The problem  is that there is no standardization occurring at any level. This results in the business squandering time and resources. In addition, many companies are seeing that these reports lack any quality control, meaning that time is spent reworking this information for accuracy.

To address these problems, ERP can be used to automate several components that management has to control, including resources and manpower. The use of these components can then be recorded automatically and visibly, allowing a financial or accounting professional to better understand what is happening with sales, marketing and production at any given time. By creating a greater degree of transparency over the course of a product’s run, there are greater opportunities to address the hindrances that non-factory departments may create.