When is it time to switch manufacturing ERP systems?

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Manufacturers need to have the most efficient systems of production in place to ensure that competitive edge is maintained. This is especially the case in discrete manufacturing, where not being flexible with demand can easily cause a business to lose money over time. Enterprise resource planning solutions have helped maintain efficiencies in the back end through inventory management, tracking and recording all processes of an order and overseeing adjustments to production based on demand. However, legacy systems age over time and as new solutions appear that allow for a more agile business strategy, the question becomes not a matter of if it is necessary to switch to a better ERP system, such as Microsoft Dynamics NAV, but when.

The times have changed
An early indication of ERP obsolescence is simply the business itself, as noted by ERP Focus. Many factories are no longer producing items based on the economies of scale, since products of that nature have moved to countries where the cost of producing at scale is far lower. Instead, the focus of many manufacturing businesses is making custom orders of goods. These products are made for a specific customer with certain features and tastes in mind. As a consequence, there is not much to learn and orders have to be done in a way that will not repeat itself in the foreseeable future. As a consequence, manufacturers need to use ERP systems that take into account “engineered” orders, which allow for that level of item flexibility.

In addition, new equipment is implemented on a regular basis to improve efficiency and create different products. If ERP systems are not interacting with the hardware, then it is essential that new solutions are put in place to ensure that the benefits are not lost and money is not wasted.

Collecting more data than ever
Newer ERP solutions take advantage of the cloud on two levels. The first is the use of Big Data, which through analytics allow companies to figure out consistent ways of improving efficiency on the factory floor, according to another report by ERP focus. This should limit the amount of workarounds necessary to finish a project. Secondly, reports and schedules are accessible to all employees with a high level of accuracy, minimizing the effects of mistakes on a new order and guaranteeing customer satisfaction. If reports are still being made via spreadsheet and this information is being duplicated excessively to cause redundancies, it might be a good idea to look into a new ERP solution.

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.