Many manufacturers already use at least some kind of ERP software to run their operations a little more smoothly, whether that's as simple as automating their time tracker methods or as complex as bringing new methods for increasing physical inventory efficiency. However, this kind of software can help in many other ways as well, bringing manifold benefits for companies that move to adopt the latest generation of ERP solutions.
One of the biggest benefits of ERP is its ability to handle inventory management, according to a report from CIO. When companies are using barcoding or other types of technology to scan raw materials into the system when they first arrive, again when those materials are used in the production process, and when a completed product is shipped out, that gives workers and executives a clear idea of exactly how efficiently the process runs and what they have on hand at any given time. That data, in turn, helps to inform better decisions about future orders and potentially helps avoid buildups of unneeded inventory.
A related benefit
In addition to improving inventory management, ERP can also improve the production process by allowing workers and decision-makers to determine which jobs to tackle at any given time based on the details of existing orders, the report said. For instance, if a larger percentage of currently unfulfilled orders require the use of a certain material, grouping those orders together becomes easier because ERP systems give an overview of every material that will be needed.
In addition, ERP can also free up man hours over the course of a week or a month simply because of efficiency improvements, the report said. In this way, companies not only get the benefit of moving through the production process faster, but they also get more done on a granular level.
Without ERP, a company's approach to the inventory tracking and production processes can sometimes be a little scattershot; one hand doesn't always know what the other is doing, according to Tech.co. But when companies integrate the latest ERP technologies, a lot of those issues can be handled quickly and easily. That's because one of the biggest benefits of ERP is that it's always working to improve efficiency based on the data provided. That helps to highlight potential speed bumps in the production process due to either inventory issues or man hour allocation. Because companies are running more smoothly, it also frees up more time and energy to devote to avoiding those hiccups.
The more manufacturers can do to make sure their ERP is up to snuff with what they need – not only now, but on an ongoing basis – the better off they're likely to be in the long term. That, in turn, could help them to streamline everything from production and costs to their overall bottom lines.
Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the Insight Works website.