Any production manager working within the manufacturing industry will know that business expenditure requires return on investment (ROI), so taking advantage of the efficiencies that the latest ERP software packages deliver is essential for a 21st-century manufacturer.
Why are ERP systems to important to production managers?
Enterprise Resource Planning (ERP) software works according to the principle that expenditure and waste should be minimised in every stage of the production process. A state-of-the-art ERP system can iron out operational problems, cut unnecessarily large stock-holdings, react to changing market conditions, cut overall production costs and deliver a high-quality, consistent product to the consumer.
Most production managers will look upon inventory reduction as the single most important benefit of a comprehensive ERP software system, but there are others. Reducing stock-holdings to a minimum without increasing shortages, delays and production lead times is a very tricky task to get right, so that's why so many production managers are relying on ERP software to manage the process more scientifically.
The advantages of an ERP software system
As well as the ability to keep cash-flow as free as possible via reduced inventories, ERP software also delivers increased productivity, improvements in the process of acquiring raw materials and the reduction of production lead times.
These are some of the obvious, measurable benefits to a business, and these alone will often be enough to make the purchase and implementation of ERP software cost-effective. However, there are also some less obvious advantages, and they make a convincing case for ERP software being part of any manufacturing company's capital expense programme.
Amongst the many roles and responsibilities of a production manager are the distribution, collection and management of information. It is vital that every department and policy-maker within an organisation has easy access to real-time information from every area of the production process.
Too many companies operate independent sections - something that can lead to 'islands' of information that require physical retrieval. However, by implementing a single, integrated software system throughout an entire organisation, a production manager can ensure that pertinent information is accessible by everyone with security clearance, and this is all achievable on a real-time basis.
Where different departments, managers and decision-makers can access the information they need immediately, changes can be made during the production process that can reduce costs and increase productivity.
As well as having an obvious benefit to a company's bottom line, such advantages will increase customer service and the consistency of products - benefits that will often translate to increased sales and market share.
The ability to measure production performance, analyse specific areas of production and simulate various scenarios can also help a production manager to react to the ebb and flow of the marketplace. Whether this involves reacting to the actions of competitors, disruptions to the supply chain or the nuanced changes in consumer demand, the end results are always improved margins, less waste and improved customer satisfaction.
Why are ERP systems so important in the information age?
The best 21-century ERP systems are designed to integrate customer service with modern e-commerce solutions - recognising the 'always-on' nature of the modern Internet. They will also make integration with the supply chain a seamless process, meaning production managers can track the shipping of raw materials as well as monitoring the movement of outgoing finished product.
In short, an effective ERP system should be able to adapt to both the changing nature of the marketplace and the ever-changing capabilities of the Internet. The leading manufacturers are now all using sophisticated ERP systems to maximise efficiency and customer satisfaction according to real-time data and analysis. To miss out on this opportunity is to hand the initiative to your competitors.