Manufacturing is a fiercely competitive industry that is constantly evolving and adapting to meet the demands of an increasingly growing population and the need for infrastructure improvements. In order to stay ahead in this fast-paced environment, manufacturers must upgrade their machines and implement software tools to enhance productivity and efficiency. One such tool that has proven to be invaluable in manufacturing and fuelling growth in the sector is Enterprise Resource Planning (ERP) software, which has revolutionised the way production is managed.
Here are Seven key benefits of using ERP software in manufacturing:
1. Automation
Throughout your software research, you’ve probably heard the word “automation” more times than you can count. Well, there is certainly a reason it comes up so often when discussing the benefits of ERP software. If you consider the opposite of “automatic”, the word that comes to mind is “manual”.
Manual methods in manufacturing can lead to mistakes throughout the entire production process. Automation, on the other hand, allows you to:
- Better track production,
- Manage material reorder points,
- Report work-in-progress (WIP),
- Notify customers of upcoming deliveries, and order progress
- Schedule work on the shop floor based on machine and employee availability.
Even modules that are not in active use are running in the background to ensure that data is live and accurate. As changes occur, the system responds accordingly to give you up-to-date information at all times. This is especially important for job tracking and reporting.
2. Supply chain management
Whether you work in a 100% custom job environment or produce standard items, one area of importance is supply chain management. From procurement of raw materials to on-time delivery of finished goods, one thing is certain: if your supply chain is not well-managed, then order fulfillment will be extremely difficult to gauge and forecast to customers. A main component of ERP software is inventory management. Having up-to-the-minute inventory counts allows you to provide accurate estimates of both time and resources to your customers whilst avoiding stockouts.
3. Connectivity
One thing that is often discussed when considering ERP software is the need for better communication between departments. A centralised database will allow, for example, customer service to inform the shop floor of changes requested by a customer instantly, without the need to speed-walk to the technician and update him or her on the changes. On the other hand, if the inventory of a raw material is low, the shop floor staff are also able to request material from their workstation without speed-walking to the office to inform the purchasing department of the low inventory.
With ERP software, not only are you better able to connect with other departments within the company, but you can also directly communicate order information to your customers through shared dashboards. MIE Trak Pro offers what we call Web Dashboards to allow our customers the flexibility to give their customers the information they desire regarding their open projects.
4. Cost Reduction
Perhaps the most important benefit of ERP software is cost reduction for your business. What exactly do we mean by “cost reduction”, you ask?
- Accurate job costing can increase profitability
- Efficient staffing
- Machine utilisation - Machines are expensive, get the most use out of them by decreasing idle machine time
- Material utilisation (lean manufacturing) - nesting orders to save material will save costs
- Accurate inventory management - save time on staff manually counting inventory
- Saving time on order entry, scheduling, quoting, etc., will lead to saving money
5. Production efficiency
Like automation, production efficiency is the idea that processes throughout the production process will be handled seamlessly and without the need for multiple areas of data entry. The first phase of production for many manufacturing companies is quote creation, ERP software helps create a standard quote formula leading to consistency between estimates and estimators, that seamlessly travels through the system to generate sales orders into work orders through to invoicing.
ERP software gives you visibility of bottlenecks in your manufacturing process as well as how to get rid of them, empowering companies to improve production efficiency. Common bottlenecks in manufacturing include:
- Inadequate inventory levels,
- Machine capacity,
- Forecasting errors,
- Scheduling conflicts.
6. Decision-making
As you’ve read through the previous 5 benefits, you’ll notice that decision-making is a component of many of them. How to handle bottlenecks in production, where to focus cost-savings, what inventory to keep on-hand, and when to use automation to improve efficiency between departments, are all decisions that your team must make.
Reporting on costs, employee efficiency, machine utilisation, sales performance, as well as profits and losses will help your management team make decisions that will further the company’s success. ERP software offers all of the necessary tools to simplify decision-making. Using these tools effectively will be the difference between you and your competitors.
7. Customer satisfaction
Without a doubt, one of the most important benefits of ERP software is customer satisfaction. As explained throughout this article, having visibility of your supply chain, eliminating bottlenecks, and utilising up-to-date dashboards on open projects are all benefits to your customers. Being able to provide a quality product, at a consistent price, whilst delivering this on time with appropriate updates to your customer, will keep them coming back for more.
In summary, the benefits of having an ERP system running in your organisation can mean the difference between success and failure. Automation, supply chain management, interdepartmental connectivity, cost reduction, production efficiency, improvements in decision-making, and increased customer satisfaction are seven of the top benefits of ERP software.
Making the decision to evaluate and implement an Enterprise Resource Planning system into your business can seem daunting, but it is certainly worth considering if you want to stay competitive in the manufacturing industry. MIE Solutions have over 25 years of experience in implementing and developing ERP systems within the manufacturing & engineering industries and has developed an award-winning production control system called MIETrak Pro. To learn more please visit:
www.mie-solutions.co.uk or Call 01527 576444