Five Key Benefits of ERP Solutions for Manufacturers
Today, the world moves quicker than ever before, thanks in considerable measure to digital technologies. Manufacturing companies that have broken away from legacy systems and embraced cutting-edge production management systems with robust automation, AI, and analytics capabilities, often see tremendous benefits. Predictive maintenance applications have substantially minimized production downtime as well as expensive repair costs. Quality assurance has been enhanced through improved automation and more powerful and granular analytics. And AI algorithms have helped manufacturers better anticipate business consumer demand, ensuring they can provide customers with the products they want when they need them.
While many manufacturers have embraced this aspect of digital transformation, some have not been as quick to extend it to other facets of their business. Manufacturing companies can significantly benefit from deploying an Enterprise Resource Planning (ERP) system that integrates software supporting multiple back-office functions into a unified platform. With an ERP system, your accounting, finance, human resources, operations, sales, and other critical functions operate on the same platform as your production management system.
While all of these functions would operate from a single database, different workflows and access permissions would be established for each department and user, respectively. However, all staff members would benefit from:
- Increased automation capability
- Greater data visibility
- Enhanced collaboration
- Substantial cost savings
- Reduced downtime
Increased Automation Capability
Your HR department may be too busy manually reconciling timesheets or calculating overtime payments to coordinate employee training. Or your procurement staff may be too swamped manually reconciling purchase orders, invoices, and receipts to spend time sourcing materials and equipment strategically.
Too often, business departments continue to rely on outdated, time-consuming, and downright stressful manual processes rather than leveraging digital technologies to streamline and automate them. An ERP’s HR module can include self-service options so that employees can type in their hours worked, with overtime, leave, and other standard calculations automatically performed. Timesheets can automatically be routed to supervisors for approval, thus saving your HR staff from deciphering handwritten timesheets, calculating pay and leave balances, and chasing down supervisors for their signature.
ERP’s automation capabilities can be applied in numerous ways across departments to eliminate or substantially reduce the administrative burden your employees face.
Greater Data Visibility
By seamlessly sharing data across departments, you can empower each manager to make smarter decisions. For example, by sharing key aspects of your manufacturing data with procurement in real-time, procurement can more rapidly secure any additional materials or equipment you may need. Or by sharing production data with finance, your finance team can make more accurate financial forecasts, which can help inform strategic decision-making across the organization.
ERP systems can be customized to provide the data departments need in the form they want. Most systems also come with data visualization tools built-in so that users can more easily understand the data. But despite the seamless data sharing, you can still maintain compliance with labor laws and employee privacy laws and protect proprietary information with an ERP system. Through access controls and permissions, you can establish which users can access what data, ensuring you can keep critical data only viewable by those with authorization.
Enhanced Productivity and Collaboration
By automating and streamlining standard processes, you free employees up to engage in more impactful work. For example, take sales staff who use a customer relationship management module in an ERP system to send automated emails to customers. These staff can now spend less time scrambling to maintain customer contact and more time developing and refining effective email messaging and sales pitches.
Further, by facilitating data visibility, you give all of your staff a better understanding of how the entire business operates. When employees have a complete picture, they can generate richer insights that encompass multiple functional areas, not just their own department. They also can make better decisions, allocate resources, identify risks more effectively, and take on greater levels of ownership, both individually and within team settings.
When implemented along with the appropriate internal processes and controls, ERP systems can help your plant save money. For example, your HR and payroll modules can ensure you’re not underpaying or overpaying employees and help stem time theft. Accounting modules can help you avoid improper payments to vendors and help you take advantage of early payment discounts. Greater data visibility can help you assess your inventory, supply chain, and other possible areas of overspending and identify cost-savings opportunities as well.
Over time, your cost savings and increased productivity will offset and then cover the upfront costs of your ERP system. But it’s important to remember that the software does not supplant robust processes and employee accountability. You should be ready to review your internal processes thoroughly as you evaluate ERP alternatives.
An ERP system can also help you reduce production downtime, which, of course, costs money. The HR modules can make employee scheduling more efficient so that you always have enough employees onsite to perform the necessary work. For example, you can establish automated rules that flag employee leave requests when too many other employees are scheduled to be off work.
Moreover, you can better manage your equipment maintenance and repair needs with a robust equipment module in your ERP. You can set up automated reminders about equipment maintenance schedules to ensure your equipment continues to run smoothly. Some software solutions analyze equipment usage patterns and can detect abnormal performance that suggests the need for repair. This type of predictive maintenance is invaluable as a minor equipment issue can balloon into a significant expense and production slowdown or shutdown if not remediated immediately.
ERP systems can provide significant benefits to manufacturers of all types. By streamlining and automating processes, increasing data visibility, improving productivity and collaboration, and reducing expenses and downtime, an ERP system can accelerate your growth. ERP systems can help you optimize all functions safely and securely and can, in many cases, be integrated with some of your existing systems.
If you’re looking to enhance your plant’s IT infrastructure, Rea & Associates is here to help. Leveraging our expertise and vendor network, we provide customized IT solutions to manufacturing clients that are designed to help them achieve their business goals. Contact us today, and let’s discuss what platform may be right for your plant.