Manufacturers must get a better grip on how they use ERP

////Manufacturers must get a better grip on how they use ERP

At this point, many businesses in the manufacturing industry are using ERP software in the course of their daily operations and getting good results from doing so. However, industry experts also say that many may be shortchanging themselves at least somewhat, because while they may use ERP, they might not do so to their full advantage. For this reason, it's important that executives and other decision-makers are not only setting up and using ERP systems, but also carefully evaluating their options for making sure this use is maximizing the impact on their bottom lines.

One of the issues that many companies face is that while they may have adopted ERP some time ago, many have undertaken something of a "set it and forget it" view of how to use these systems, according to a report from Automation World. And even those who have been a little more responsive to their businesses' changing needs over the past few years with respect to ERP might not have done all they could to ensure their use of these systems evolved alongside the company.

Why is that important?
It may be wise for executives to think of things this way: If inventory management software is being used to streamline production processes, and it does so initially, it probably makes sense to double back and make sure the software is adapting to the better processes it was used to create in the first place, the report said. Things like NAV inventory scanning may be particularly helpful when it comes to giving companies added flexibility to respond to unexpected changes.

ERP is helpful above and beyond previous options specifically because it generates data on the entire production process, from raw materials coming into a factory to finished products going out, the report said. The more data that can be generated when it comes to these issues, the more actionable information companies will have to improve their bottom lines and streamline production.

Proof in action
One company that recently transitioned to a cloud-based ERP system is something of a success story in this regard, according to CIO. While most companies spend 70 percent of their tech budget on support and maintenance, this firm only used about half of its budget that way and invested the rest in ERP instead. This helped the manufacturer to reduce the amount of downtime seen at various points in its production process by highlighting where problems cropped up most regularly. These improvements also allowed the company to avoid hiring people whose sole job would have been to watch out for quality issues.

The more companies can do to position themselves well for the future, the better off they're going to be. ERP should be used to consistently evaluate how well things are running, and whether there may be any areas in which tangible improvements can be added on top of those already made.

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.