A manufacturing ERP system can resolve many common industry challenges faced by manufacturers of all sizes. Manufacturers continually struggle with razor-thin margins, accurate demand forecasting, efficient resource planning, warehouse and inventory management, and supply chain management. The right manufacturing ERP system can solve these challenges and add additional functionality to improve customer communications, staffing management, and much more.
Five Challenges Solved by a Manufacturing ERP System
An enterprise resource planning (ERP) system can help unify a manufacturer’s systems into one comprehensive platform that encompasses accounting, finance, operations, warehouse management, and more. Thanks to cloud-based ERP, they can also tackle supply chain challenges, improving visibility into the supply chain and enhancing communications and visibility. Here are five of the most frequently cited challenges that manufacturers face and the many ways in which a manufacturing ERP system helps solve these challenges.
- Thin Margins
Manufacturers often struggling with pricing, trimming prices so low that their margins are razor thin. To maximize profits, they must sell a greater volume of products or cut expenses further.
A manufacturing ERP system provides exceptional visibility into all aspects of a company’s finances, including expenses. ERPs capture all aspects of financial data and enable numerous detailed reports which can be used to examine costs.
Additionally, with the right automations and CRM integrations, ERP systems can be used to improve customer communications. Automated communications, including automating rebates and payouts, enhances customer loyalty and improves profits by increasing repeat sales. It’s an old truism that it costs less to sell to an existing customer than it does to acquire a new one, and by improving communications and timely payouts, companies can improve retention, loyalty, and repeat sales, thus cutting down on marketing and advertising costs and overcoming thin margins.
- Accurate Forecasting
Another area in which manufacturers frequently struggle is forecasting. Without accurate forecasts, manufacturers run the risk of stock outages or overages, unhappy customers, and failing to meet profit goals.
ERP systems enable improved demand forecasting by analyzing buying and demand patterns over time. This sophisticated element of ERP reporting adds exceptional value to manufacturing ERP systems and provides better data and forecasts.
- Efficient Resource Planning
Manufacturers invest heavily in their equipment. Each piece of equipment represents tens of thousands of dollars in sunk costs. If such equipment remains idle for any length of time, either due to poor scheduling or malfunctions, manufacturers lose money.
With a manufacturing ERP system, companies can improve equipment scheduling to reduce idle time. They can improve job scheduling and output. Additionally, they can schedule maintenance around the job timeline to ensure that no minute is wasted—and the equipment is serviced properly to maintain peak efficiency.
- Improved Warehouse and Inventory Management
Warehouse and inventory management remains a sticking point for manufacturers. An efficiently managed warehouse is one that can fulfill orders quickly and provide up-to-the-minute reports on stock levels. Without modernized, automated equipment, warehouse and inventory data can be days, weeks, or even months out of sync with the company’s records, creating a big headache when orders come in.
Modern manufacturing ERP systems often leverage additional integrations around warehouse and inventory management that enable efficient stock counts and up-to-the-minute updates. Cloud-based software can be used in conjunction with tablets or smartphones to turn them into handheld barcode scanners, with data passing seamlessly from the scanner into the WMS and ERP system through cloud computing networks. When such a system is used, no matter where the warehouse is located, the data can be accessed through the ERP for immediate stock updates. Manufacturers will always know what they have on hand and ready to ship to an eager customer.
- Better Supply Chain Visibility
Manufacturing supply chain visibility is often at the top of the list of challenges in manufacturing industry surveys. Most manufacturers continue to struggle with full supply chain visibility, but a cloud-based manufacturing ERP system can improve visibility in many ways. Such systems enable connections with suppliers and updates flowing into the manufacturing ERP system, so manufacturers can track and monitor items in the supply chain with ease. They can also track, monitor, and report on supplier metrics, as well as problems with order and batches that may lead back to a particular supplier (an important consideration for heavily regulated industries or those requiring tracking, such as pharmaceutical and process manufacturing). Manufacturing ERP platforms offer better visibility into all aspects of the supply chain to ensure timely delivery of products.
Sage provides ERP systems and various software that integrates with their ERP ecosystem to provide small to mid-sized manufacturers with the data, visibility, and forecasting they need. Both cloud and on-premises systems provide manufacturers with exceptional insight into their operations, warehouse and inventory, supply chain needs, and more. If you are considering a manufacturing ERP system, we encourage you to review our page on Sage systems.
Emerald TC provides software and consulting. We can help you choose the right ERP system for your needs. Contact us or call 678-456-6919 for more information.