What drives manufacturers to use ERP?

///, Manufacturing Productivity/What drives manufacturers to use ERP?

In many ways, enterprise resource planning is a system that has combined many of the aspects that companies face on a day-to-day basis into a single hub. It addresses a lot of issues involving the management of labor, inventory, finances and other important business process, and makes companies more efficient. Manufacturers are often looking for ways to save money and improve productivity to maximize their profit margins and develop a competitive edge over other firms. As a consequence, it only seems to be a natural fit that ERP is found in so many manufacturing outfits across the country and around the world. But why do they seek out ERP in the first place?

Advantages in a single location
There are many reasons that manufacturers are looking to implement ERP, or use a new implementation such as Microsoft Dynamics NAV 2015, in their daily operations. There are a lot of things that these businesses are looking to improve. For example, in a study conducted by the consulting firm Aberdeen Group, 38 percent of manufacturers see the lack of timely information as a good reason to switch to ERP. This lack of information often leads to important decisions being delayed, which can cost the company money. In addition, the same percentage of companies said that they needed ERP to manage growth expectations. The reason for this is to ensure that they don't overspend in areas where there isn't a lot of profit to be made.

As a result of this, they see ERP as way to manage growth and innovation. This can be done by coordinating several critical aspects of the business in a single hub-like design. The entire cycle of an order, from production to shipment, would be streamlined into a single process. In addition, indirect aspects of the order, including customer relations and product design, would be brought into the entire process as well.

Outside of the processing facilities, there is another benefit to be considered: market reach. According to business expert Kenneth Hamlett, one thing that manufacturers sometimes lack is a means to get goods out to customers quickly beyond setting up shop in a new region. When setting up a new location, having the same system in place can help maximize productivity, even if the workforce is difference. By establishing the same ERP implementation at the satellite facility, that maximizes productivity there right away.

Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.