How ERP can revolutionise your manufacturing process

Enterprise resource planning can help organise inventory, prepare for customer demand and improve productivity.

From better inventory management and productivity, to improving quality and lead times, companies with manufacturing operations are constantly looking for ways to improve efficiency. However,  this requires coordination across the entire enterprise from the back office to production.

Without achieving synchronisation across all operations, manufacturers cannot effectively manage fluctuations in demand, increasing competition, and supply chain issues.

Although many manufacturing companies already have multiple software installed to manage their operations, relying on several vendors for different processes can become extremely costly.

Fortunately, there is an alternative that allows all processes to be operated through a single, streamlined solution that listens to your business’ unique needs. With this in mind, here are six ways enterprise resource planning (ERP) software can revolutionise your manufacturing process.

Optimise inventory management

There are two sides to inventory management – materials and product inventory.

Materials management is the processes that go into ensuring an organisation has the appropriate materials to complete the manufacturing process; whereas product inventory includes the products that are produced through the manufacturing process and how they’re transported to customers.

However, if these two equations aren’t synchronised, difficulties might arise with having the appropriate materials at the right time and product levels being incorrect or insufficient to satisfy orders.

By implementing ERP software, processes such as billing of materials, tracking materials and inventory management can be updated automatically – for smaller manufacturers, these are most likely updated manually through spreadsheets; which are prone to human error.

Introducing an ERP system can help reduce these human errors and automate inventory requirements so that materials always arrive when needed, instead of taking up space your business can’t spare.

Prepare for customer demand

When data is tracked manually and historically, it;s difficult to tell what levels of inventory are necessary from one term to another. The business can make an educated guess based on previous data, but this doesn’t account for current changes in the market.

With an estimation about customer trends, it doesn’t account for deviations in customer history, for example, if one of your business’ top clients, goes out of business and you’re working on an estimated guess, the results will be costly.

With a manufacturing ERP system, it will alert your business to these significant changes in customer demand, both from previous data and real-time. This makes it much easier for accurate future customer demands.

Refine human resources

Refining human resource operations with training and attendance tracking can also have a positive impact on your business operations. By integrating human resource management and your ERP system, your business can automate many of the paper-based admin tasks facing your HR department.

This will allow HR to focus on the development of your business workforce, which results in a huge win for saving time and optimising human resources.

A good human resource management system can be crucial to maintaining a lean workforce who, on a daily basis, respond to many challenges. Your business will be rewarded with employees who are more committed, inventive and productive.

Streamline collaboration with customers and suppliers

ERP can optimise business processes and drastically improve response times. This will improve virtual communication across the supply chain and internal communication between unrelated departments. This can have a positive impact on collaborating across your business.

With these close collaborations with partners, it means that specific challenges are met in a timely fashion.

With a quick response to change, it can ultimately improve your customer relationships. This is just one of the ways ERP software can impact as a continuous business improvement tool. By finding important information with satisfaction, your business will be more prompt in leveraging development opportunities.

Automate processes

If a process is definable and repeatable, then chances are it’s better off automated.

ERP systems such as Pegasus Opera and Sage 200c integrate quality control and manufacturing management – purchase invoices matched against goods, job profits can be assessed and stock control managed all from one place; creating a streamlined, cost-effective manufacturing solution.

The time saved through automation can then be reinvested into your business for the other projects that are more pressing.

Improve employee productivity

Businesses that still try to run their manufacturing by using manual processes are more likely to have higher labour costs. The same can be said, however, for some lean manufacturers too. Even in a lean environment, these indirect labour costs can be a potential problem.

A great ERP system can help businesses improve these processes and efficiencies so less labour time is required to complete the same amount of work. Additionally, an ERP can automate manual processes, which frees up more labour hours that can be reinvested into higher-return activities.

In the past, ERP software was a system many manufacturers wanted to make their everyday processes more efficient.

To stay competitive, however, manufacturers need to now invest time and money into ERP software to optimise inventories, be aware of customer demands, automate processes and more. It’s only with these capabilities that a manufacturer can streamline processes and stay in the competition.

As you can see from above, an ERP solution can help your manufacturing operation in a variety of ways, but what about the bottom line? When weighing the pros and cons of a comprehensive ERP implementation, it helps to look at the many ways ERP can save you money.

The following list provides a handful of cost saving benefits of an ERP for manufacturers.

Reduce inventory deviations

Inventory is the key to your company and likely your largest asset, so knowing its accurate levels is imperative. Inventory translates to money, and if you’re relying on disparate systems or manual methods to track the receipt of raw goods, the issuance of ingredients to batch tickets, and the shipment of finished goods, it’s easy for these numbers to lose accuracy.

It’s not uncommon for manufacturers to experience inventory deviations upwards of 20% due to inaccurate data entry in their warehouse inventory practices. This is a humbling realisation when preparing year-end financials for upper management.

An ERP, integrated with a barcode scanning solution, automatically tracks inventory balances, serial numbers, lots and product line information. Inventory data is stored, collected and disseminated through one centralised database within the ERP solution creating accurate inventory levels and reducing deviations. All balances are updated in real-time, allowing you up-to-the-minute, on-screen access to your crucial inventory data.

Customer retention

Customers are the company’s lifeblood, demanding superior products, timely access to inventory, dependable delivery and accurate paperwork. ERP software provides manufacturing functionalities that include various bills of material, quality control, formulation testing and recording, material requirements planning, inventory management and more.

Your ERP can also help you move CRM functionality out of spreadsheets and email programs and into the vital flow of information between the sales department, support representatives, and the rest of the company. With CRM functionality, you can analyse, manage and synchronise sales, marketing and customer care activities across all points of contact, giving teams the tools needed to find new customers, close sales faster, and build lasting, more profitable relationships across all channels. Finally, ERP software records and stores accurate, comprehensive customer data that can be delivered in real-time throughout the purchasing process and on-going relationships.

The result? You’ll close sales faster, prospect more efficiently, and create superior customer satisfaction. This will help your cash flow stay moving in the right direction.

Adjust with regulatory changes

The question isn’t if there will be regulatory change, but when. Rather than allowing these changes to throw your processes into turmoil, having an ERP system that’s attuned to the needs of your industry can help you save money and stay in compliance.

First, you can lean on the industry experts of your ERP provider in helping you implement the changes necessary to understand and comply with changing regulations. Of course, you’d be wise to go with an ERP provider who understands your industry needs and compliance obligations.

How working with Monpellier can help you save money

ERP software solutions providers are many, the key is finding a provider that designs, develops and sells to manufacturers and know the industry well. Monpellier can save you money by providing the experience and insight of experts who understand your specific needs, from regulatory compliance to formulation management and beyond.

Contact us today and let us help your company determine how an ERP solution can save you money. Call us on 0191 500 8150 to speak to one of our friendly Business Software Consultants.

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