While there are definitely differences between how the U.S. Army uses enterprise resource planning software and how the typical manufacturing and fabrication business utilizes the same kind of programs, the way the Army uses this system highlights its benefits.
The Army has switched from using a variety of siloed programs to a comprehensive ERP platform that can share various types of information. The ultimate goal of the military organization's use of this software is to meet various financial bookkeeping and auditing requirements set out by the Department of Defense, according to InformationWeek. ERP will also allow greater organizational visibility in other areas, including inventory levels and documentation efforts.
Manufacturers and fabricators can also use ERP to bolster their efforts to increase transparency in purchasing, production and allocation processes, as well as gain a better view into company spending. The ability to have real-time figures as well as short- and long-term statistics relating to a variety of business practices provides some significant benefits.
Easy customization helps effectiveness
One of the most interesting things about the Army's use of ERP is that the armed force is building on and changing its software post-implementation to meet requirements set by the DOD. This concept – continuing customization and development of software – is one of the biggest benefits of a component-based ERP system, whether it's the Army's proprietary platform or a commercially available one such as Microsoft Dynamics NAV.
For manufacturers and fabricators – and all businesses – a long-term goal of operations is to grow. Whether that development means expanding into different product lines or simply producing more, it's likely that an ERP system will have to change as well. By using a system based on the NAV module concept, companies can add onto the current functionality of their systems without having to go through a long or expensive upgrade process every time an update is desired.
While ERP is very common among manufacturing and fabrication businesses, there's no one single overwhelming reason that companies choose to use such software. Research from Aberdeen Group cites five major factors – including cost reduction, managing growth and generating real-time data – that organizations commonly purchase these platforms. This spread of concerns highlights the need for an agile and easily changeable ERP system that can be adapted as operational requirements change and grow.