What is ERP (Enterprise Resource Planning) and why is its use important within the Manufacturing industry?
Enterprise resource planning (ERP) is an industry term for the broad set of activities that help an organisation manage its business.
An important goal of Enterprise Resource Planning is to facilitate the flow of information so business decisions can be data-driven. Enterprise Resource Planning software suites are built to collect and organise data from various levels of an organisation to provide management with insight into key performance indicators (KPIs) in real time.
ERP software modules can help an organisation’s administrators monitor and manage supply chain, procurement, inventory, finance, product lifecycle, projects, human resources and other mission-critical components of a business through a series of interconnected executive dashboards. In order for an ERP software deployment to be useful, however, it needs to be integrated with other software systems the organisation uses. For this reason, deployment of a new ERP system in-house can involve considerable business process reengineering, employee retraining and back-end information technology (IT) support for database integration, data analytics and ad hoc reporting.
Legacy ERP systems tend to be architected as large, complex homogeneous systems which do not lend themselves easily to a software-as-a-service (SaaS ERP) delivery model. As more companies begin to store data in the cloud, however, ERP vendors are responding with cloud-based services to perform some functions of ERP — particularly those relied upon by mobile users. An ERP implementation that uses both on-premises ERP software and cloud ERP services is called two-tiered ERP.
ERP Implementation into Manufacturing
ERP systems solve a number of challenges and provide invaluable benefits to manufacturers seeking to reduce costs, manage growth, streamline processes and gain a competitive advantage. ERP software integrates all areas of business (materials and inventory, production, operations and sales, accounting and finance, etc.) so that every business function relies on a single database. This “information hub” delivers accurate, real-time information crucial to the manufacturing industry.
Here are the top reasons today’s manufactures need a modern ERP system:
- Streamline Processes.As manufacturers grow, their operations become more and more complex. ERP manufacturing software automates all business operations, providing accurate, real-time information. ERP increases efficiency and productivity by helping users navigate complex processes, preventing data re-entry, and improving functions such as production, order completion and delivery.
- Cost Reductions.With one source of accurate, real-time information, ERP software reduces administrative and operations costs. It allows manufacturers to proactively manage operations, prevents disruptions and delays, breaks up information logjams and helps users make decisions more quickly.
- Flexibilty. Modern ERP software systems are robust, flexible and configurable. They are not a one-size-fits-all proposition, but can be tailored around the unique needs of a business. ERP systems also have the ability to adapt with the ever-changing needs of a growing business.
- Competition. ERP systems may require an investment, but there’s also a cost to do nothing. Manufacturers cannot afford to put off an ERP implementation while their competition invests in ERP and starts reaping the benefits.
Sources:
- Techtarget
- Workwisellc
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