Why manufacturing industry should have an ERP?
One of the most dynamic and ever-evolving industries in the market is the manufacturing industry. It is not only highly competitive in nature but also very innovative. For an industry that is going to be a dominant force in the upcoming years and many technologies are created to boost the industry it is quite essential that a solution, which would enhance its efficiency and effectiveness can be integrated into it. An Enterprise Resource Planning (ERP) solution is the answer or such a solution.
An ERP for the manufacturing industry will increase efficiency but also reduce costs, enhance sales, increase profitability. Furthermore, it can guide the organization to make a strategic and accurate decision based on the knowledge about the industry and the product. ERP solution has the technology that integrates all the features of a business like resources, operations, sales, accounting, finance, reporting and monitoring of all these into a single database.
With all these facets provided by ERP solution, many manufacturing industries are opting the ERP solution. According to Allied Market Research by 2020 the ERP solution solution is likely to grow up to $41.69 billion.
Such growth is definitely an indicator of the fact that the ERP solution is here to stay. So what are the benefits that a manufacturing industry likely to get from integrating ERP solution into their business?
Benefits of ERP for Manufacturing
For the manufacturing firms, ERP helps to leverage the business with some advanced functionalities and features that can improve various aspects of the manufacturing processes. It includes aspects like sourcing, and procurement to production, warehousing, quality testing, and delivery of the products. Along with these and ERP solution can help the company to solve issues relating to limitations faced by the manufacturer due to poor production, scheduling and ineffective ways of handling manpower and etc. ERP solution is able to resolve these issues and more
thereby increasing the manufacturing industries benefits with the following:
1. Automating the Business Process
A comprehensive ERP solution solution will help a manufacturing business to streamline its process and initiatives automation for the business. A streamlined process ensures that all the data related to the business is accessible from a centralized location with full visibility across all functionalities, i.e. development, designing, procurement, inventory, production, finance, sales, delivery, customers and etc.
Addition to these a complete ERP solution will allow any person of the concerned business with the authorization to check the production status in real-time without depending on any team or individual. E.g. the progress of the production can be monitored by a designing team without having to depend on the production team and if needed the designing team can update the purchasing team for additional purchase of any raw material. This ensures the system’s efficiency, productivity while keeping the company’s commitment to the customers. The automation of the process also decreases the dependency on the manual process thereby reducing errors and increasing profitability.
2. Effective Response to Market Condition
ERP solution uses real-time data to analyse the market hence have the capacity to give the business an opportunity to estimate, plan, adjust and respond to the market’s change and requirement n a short span of time. The ERP solution generates reports that are referred to by the decision makers of the business at regular intervals to determine the trends of the market. This allows the manufacturing industry to understand the change and the demand of the market, which is regulated by the customers. An ERP solution will enable the managers to reduce forecasting errors while capitalizing on new opportunities.
3. Making Strategic Decisions
A manufacturing business will be able to make an informed, spot-on, and faster decision with the transparency and visibility that the ERP solution provides to business. This will facilitate the decision-making capabilities of an organization with the insights it can gain from every department. The opportunity to get access to the key performance metrics on facets like sales margin, overall sales etc. allows manufacturing companies to make necessary internal decisions and align their decisions as per the market demands.
4. Cost Reduction
With automated and streamlined process being an integral part of ERP solution there can be a significant reduction to overall operation cost on manual labor and time. An efficient ERP solution will increase productivity with enhanced precision; curtail losses by lowering error rates while minimizing labor expenses. Accurate inventory tracking in ERP solution and integrating it with the production planning reduces inventory excess, warehousing costs while saving money.
5. Better customer satisfaction
There can be a significant improvement of the delivery of products in a fully implemented ERP solution thereby providing better customer satisfaction this is possible because of the streamlined production control, enhanced inventory control, better process scheduling and efficient coordination of distribution. All these can be achieved in real-time with the ERP solution.
The benefits of Enterprise Resource Planning system are immense for the manufacturing industry. However, it is of utmost importance that a manufacturing company selects an experienced ERP solution provider to receive its benefits.