Implementing Manufacturing ERP can be the cornerstone of running an effective manufacturing company. How can a manufacturing company select an ERP system? Manufacturing ERP solutions come in various varieties; At the same time, each may offer viable options; not everyone may fit perfectly for all organizations.
To select an ERP system suitable for Manufacturing, you must consider factors like industry (process manufacturing, discrete manufacture or bespoke manufacture), company size and complexity of processes involved. Arion ERP's procurement experts have prepared this comprehensive guide so you can make an informed decision and narrow your choices quickly and effectively.
Manufacturing ERP Software: What Is It?
An outstanding product alone won't ensure a successful manufacturing process; to remain compliant, efficient, on time, and profitable, you must also ensure your manufacturing operations run efficiently - ERP software is an invaluable asset in helping ensure this happens. ERP allows manufacturers to manage resources more effectively as it helps plan for manufacturing operations.
ERP (Enterprise Resource Planning) systems can gather, store, manage and interpret data to meet various business requirements, from human resources and finance to personnel administration and payroll processing. ERP solutions can be implemented across industries by multiple businesses, with vendors providing both generalized and industry-specific solutions - manufacturing companies may opt for all-encompassing ERP implementation. In contrast, industry-specific ERPs might prove more successful for them.
At the core of it, all lies each business owner's unique requirements, budget and any specific features offered:
- All-In-One ERP Solutions: Can offer a user-friendly entry point and frequently support manufacturing-specific add-ons, modules, or connectors, as well as integrations with other systems.
- ERP Software for Manufacturing: Has specific features that will help with the execution and planning of projects. This includes tracking materials and costs as well as maintaining relationships with clients.
Arion ERP and Microsoft Dynamics 365 Business Central are examples of all-in-one ERP software. Sage Intacct is another. Manufacturing ERP solutions can include Arion ERP, Acumatica, Infor CloudSuite Industrial, and Infor CloudSuite.
What is Manufacturing ERP Software, and Why do I need it?
Organizing and leading a large and complex company can become increasingly complex as time goes on, providing managers with insights necessary for informed decision-making. ERP software has proven especially invaluable for manufacturing businesses with specific equipment management, physical inventory or accounting requirements.
ERP software provides manufacturers with an integrated, centralized and single software system that offers several key benefits, including:
- Manufacturing processes can be streamlined by eliminating redundancies.
- Data sharing between departments can improve operational workflows.
- Costs can be reduced by, for example, identifying inefficiencies within the supply chain or waste inventory.
- Strengthen compliance through better documentation and inventory control.
ERP solutions are essential if your goal is to stay competitive and agile in the manufacturing sector.
There Are Many Other Reasons To Consider An ERP System
- You need a new data processing system to handle large amounts of data in each department. It should also streamline workflows and integrate your systems.
- You cannot efficiently manage your current system because it is too complex or disjointed to be managed. This makes daily data processing and communications between departments expensive and inefficient.
- Suppose you're having trouble keeping up with the demands of your customers, tracking inventory, finding customer-specific information or including recent sales in your analysis. In that case, organizing all pertinent data in a single, central location is important.
- You find that manually entering data into your accounting system is time-consuming.
- The time it takes to complete tasks and perform processes is increasing. However, integrating several solutions can be expensive. It would be best to consider the licensing costs, labor and operations expenses, and additional training. It is important to have a single software suite that works right out of the box and integrates your business processes.
The best ERP for Manufacturing will allow you to centralize all of your processes and create a hub from which you can access the required data to manage your company.
The Benefits Of Manufacturing ERP Software
The manufacturing industry is highly dynamic and competitive, demanding increased productivity and efficiency to keep up with rising consumer demands for goods and services. Manufacturing remains invigorated as it caters to growing populations with infrastructure upgrade needs and satisfies everyday consumer and business requirements.
Manufacturing software used to oversee production must keep pace with changing industry and customer demands, which ERP software provides for. Over four decades ago, ERP was originally introduced and has seen huge productivity and traceability gains throughout manufacturing industries worldwide. ERP also provides many other benefits, seven of which can be seen below.
Automated
Have you heard the term "automation" when discussing software? There's a good reason it appears so often when discussing ERP benefits; automaton is its opposite, manual.
Your memory might bring to mind days when calling family and friends was limited to dialing their numbers on a landline phone. At the same time, Siri can make calling easier today. All it takes to reach someone quickly with no fuss: open up your smartphone and ask Siri to contact Joe Smith. The phone dials him directly within seconds - similar to using manual systems instead of ERP solutions within manufacturing companies.
Manufacturing by hand can result in mistakes throughout its production cycle, from incorrect order entries to shipping errors. Automation provides solutions such as these:
- Better track production.
- Manage material reordering points.
- Report work in progress (WIP).
- Notify customers about upcoming deliveries.
- Schedule work on the shop floor according to machine availability and employee availability.
The system runs modules in the background that aren't in use to keep data accurate and current. The system reacts to real-time changes, so you always have the most up-to-date information. It is important to track and report on jobs.
Supply Chain Management
Supply chain management is essential whether your organization produces custom or standard products; supply chain management applies across every aspect of business, from raw material procurement and timely delivery to customer support services and sales operations.
Stock Management Raw materials and finished products (if your business offers standard parts) become increasingly important as your business expands and competition increases in your industry. Inventory Management is an integral component of ERP; keeping accurate counts allows for accurate time/resource estimates from clients.
Your warehouse manager or supply chain manager can use Arion ERP to make detailed notes on vendor deliveries to identify which are most reliable for receiving company business and thus should receive it. Vendor B may prove more dependable over time than Vendor A - finding this information with data management systems like ERP software is possible.
Connectivity
Communication is often mentioned when discussing ERP software. How will customer service inform employees on the shop floor, for instance, if a work order was released but called back for modifications? Furthermore, machine operators must be informed immediately if drawings have changed as soon as the customer requests an adjustment to an already released order.
Customer service departments can instantly update ERP databases to notify staff on the shop floor about updates without running to a technician for every update. Also, when inventory drops for specific raw materials, shop floor staff can request it without having to walk over to an office and directly inform purchasing of this need for material.
ERP software makes it possible to communicate directly with clients using dashboards. Arion ERPs Web Dashboards enable our clients to provide relevant project details directly to customers via dashboards.
Cost Reduction
ERP software can reduce costs for your company. You ask, what exactly is meant by cost reduction:
- Profitability can be increased by accurately calculating job costs.
- Efficient staffing
- Reduce idle time on machines - They are costly, so make the most of them.
- Nesting order to conserve material (lean Manufacturing) will reduce costs.
- Save time by automating inventory management.
- Spending less time in order entry, scheduling, and quoting will save you money.
Production Efficiency
Production efficiency refers to ensuring all processes run efficiently throughout the manufacturing process without inputting information in multiple places. ERP software is especially helpful during this phase for most companies; using more than one estimator might lead to inconsistent quotation processes; for optimal quoting processes, estimators must be consistent when giving estimates and quotes.
Arion ERP allows you to generate invoices directly from an RFQ, generate sales orders and work orders for factory floors, create invoices directly through sales order modules, and create them via invoice-generating tools.
ERP software makes it possible to identify manufacturing bottlenecks and consider ways of eliminating them. Manufacturing bottlenecks typically include:
- Inventory levels are too low.
- machine capacity,
- Forecasting mistakes
- scheduling conflicts.
ERP software can prevent these bottlenecks with its proper automation and inventory management, as well as reporting on WIP and Advanced Planning Scheduling.
Decision-Making
Your team may find that much of their benefits depend on making good decisions, from managing bottlenecks and improving production to saving money, maintaining stock levels, or automating processes to increase efficiency.
Your management team can make informed decisions more easily by reporting on costs, employee productivity, machine usage, sales performance and profits. ERP software offers all the tools to assist them and make your company the clear winner amongst competitors. Successful business operations rely on making informed decisions, and ERP software can make all the difference in making smart ones.
Customer Satisfaction
Customer satisfaction is, without a doubt, one of the biggest benefits that ERP software can provide. This article has explained that having visibility over your supply chain and eliminating bottlenecks benefit customers:
- Customers can receive email notifications and updates.
- On-time delivery
- Pricing that is accurate and competitive (when you know your costs).
- Price your products and services competitively without going bankrupt. Customer. retention is important, but so are profits. Retain your existing customers.
Companies recognize the significance of customer retention; however, many don't know exactly how. Offering timely deliveries of products and services and regular updates regarding fulfillment will all go towards increasing customer retention rates. Furthermore, providing competitive pricing options with special discounts to your loyal customer base will only strengthen those bonds further.
The Best ERP Software for Manufacturing has the Following:
Stock Management Features
Inventory management software designed specifically for Manufacturing ERP can give you a live picture of your materials and products, including their location and current state. Real-time visibility of inventory status makes it easy to identify shortages or supply needs before any issues arise. Manufacturing ERP software automates this process to ensure products required to fulfill orders remain available and on budget and schedule.
Features To Help With Production And Capacity Planning
Manufacturing ERP software enables manufacturers to optimize processes and allocate resources more effectively by keeping track of materials being produced and their requirements, offering complete visibility over their production platform. ERP manufacturing software can quickly detect personnel or skills deficits and item shortages to allow for timely deliveries.
Automated and Increased Visibility
All core functions within an organization can be linked through an ERP system. Manufacturing operations, finance and sales, inventory, and supply chain are all included. ERP systems for Manufacturing often have real-time analytics and reporting features that provide insight and visibility into the operation. Automation can improve the efficiency of several functions, including:
- Billing
- Work Orders
- Production Planning
- Shop floor control
- Stock updates
- Manufacturers Specifications.
- Materials Bills
- Costing a job
Improved Customer Service
A CRM system can connect data from your manufacturing operation to customer information. It may be integrated into or added to the ERP software. It can give you real-time insights into the customer's activities, which will help with customer service.
When Selecting ERP Manufacturing Software, You Should Look Out For The Following:
ERP systems for Manufacturing can be an incredible investment and bring many advantages. While large brands or flashy software might seem appealing, the ideal ERP for Manufacturing often requires tailoring an individual solution specifically to each organization's needs and establishing long-term success.
One step that manufacturers should take when looking at ERP solutions is identifying whether or not the chosen application caters specifically for discrete or process Manufacturing, for instance, by choosing an ERP system meant for discrete production as this would leave process manufacturers without access to some measurement conversion features, for instance, the ability to switch measurement units may become limited.
Demo software often only shows limited aspects of your company and workflows; to find an ERP that best matches Manufacturing operations, you will have to examine each feature carefully and assess them against key criteria, including:
- Size of the company
- Businesses processes
- Complexity of organization.
- Expected outcomes
When choosing the right manufacturing ERP software, it is important to consider your preferred deployment model.
Cloud ERP: Solutions typically require less time for implementation and less overall cost, making them appealing to emerging companies looking for an effective ERP system in Manufacturing. Smaller manufacturers may find it more practical to utilize an outside IT provider rather than host everything themselves.
Certain: Industries that handle more sophisticated, complex or sensitive information may prefer on-premises data storage for legal or proprietary reasons. For example, a large aerospace manufacturer may prefer greater control of its data.
The Best ERP Systems for Manufacturing
Manufacturers with niche products that require unique workflows should assess if customized ERP solutions would benefit them; in such cases, an on-premises system might provide the optimal solution.
Cloud-based ERP solutions may offer adequate customization options, even though you might not have as much direct control. Keep in mind that companies with more than one location may also need a specific Two-tier ERP approach for more effective results.
Tier 1 software provides highly customizable functionality needed to run large companies efficiently. At the same time, subsidiaries and smaller units usually utilize Tier 2 solutions which may be simpler but better meet their requirements. Once integrated into one another, information flows effortlessly from Tier 1 to Tier 2. Before beginning to search for an ERP vendor for Manufacturing, carefully consider these requirements to establish which criteria you will use when choosing an appropriate solution:
- Price: Does the cost of the vendor's solution fit within your budget range?
- Return On Investment: Does the solution provide an expected return on investment based on key performance indicators?
- Minimal disruption: Will software implementation disrupt the business or be effective?
- Software functionality: Does it support your existing business processes and improve them?
- Reputation: Does the vendor appear to have a good reputation?
- Expansion: Can the solution scale with your company?
- Support: Can the software supplier provide support both during implementation and after?
Eight Manufacturing ERP Trends to Watch in 2023
As we enter a new calendar year, we look forward to witnessing what innovations ERP software will bring companies to maximize benefits across value chains. Not only can transformational technologies deliver benefits; digital advances also include solutions that automate routine manual tasks, improve business decisions and establish new working methodologies - there will be many innovations by 2023. Here are eight trends manufacturers should watch for as they plan their digital futures.
The ERP and the IIoT
Industrial Internet of Things devices will facilitate greater automation. Furthermore, the interconnectivity of these devices will generate substantial volumes of data that need to be stored somewhere.
ERP systems are essential in today's business landscape because they store all your information, turning it into reports and dashboards for analysis and cost reduction. Furthermore, companies using an ERP can monitor machine performance remotely, allowing real-time monitoring anywhere.
Operators and supervisors can monitor production machines in real-time and historically via ERP systems, providing operators and supervisors with real-time or historical views of production machines for more precise maintenance, longer equipment lifespan and greater asset upkeep. Reports generated will serve to track asset health status.
Cloud ERP
Cloud computing adoption is a key component to enable IIoT within ERP. IIoT refers to a set of smart machines with embedded sensors connected via a network. Cloud ERP allows this framework to send and receive data automatically without manual intervention.
Integrating Becomes Increasingly Important
Integration is crucial when moving to the cloud and integrating with smart devices. It's also important to link with machines, use AI, or share information with other partners. ERP systems that provide easy and seamless integration with any protocol will either help or hinder a company's digital transformation.
Information And Collaboration On The Supply Chain
Supply chain issues remain a central focus in numerous industries. According to IDC's Ecosystem of Industry report, manufacturers cannot manage it alone due to its dynamic and complex nature; keeping pace with innovation becomes nearly impossible as manufacturers struggle to maintain supply chains alone. IDC believes the next phase in digital transformation should involve expansion and collaboration; sharing data, apps or operations through joint ventures will increase profits substantially.
ERP will enable manufacturers to set up customer and supplier web portals. These portals enable manufacturers and their stakeholders to openly share information regarding products, specs, deliveries and service status.
Artificial Intelligence (AI) in ERP
ChatGPT, an AI-driven natural language processing software released in 2022, proved how AI could be utilized more broadly to understand problems and complexities. Intelligent machines will become capable of sharing more of what humans do as ERP solutions increasingly integrate AI into their products for improved decision-making and quality enhancement purposes.
As this transformation occurs, it will have major ramifications on companies; their skill requirements may shift significantly as new organizations arise that need to upskill or reskill staff to manage tomorrow's organizations successfully.
Anytime, Anywhere Remote Access
ERP systems support remote computing with interconnected devices and access to cloud computing. The manufacturing staff can access data about their machines remotely, evaluate performance and gain insights.
Cybersecurity
An ERP system will become even more crucial for data protection due to the interconnectivity between devices, machines, and applications. A good ERP system can protect data transmitted and tracked by machines and applications.
ESG Reporting with ERP
Investors and consumers are more likely to prefer companies with the best environmental and social credentials. Companies will use their ERP systems' environmental, social and governance reporting features to produce accurate, timely and verified reports in 2023.
Conclusion
ERP can make or break your company. ERP software offers many advantages to help businesses thrive; automation, improved decision-making, increased productivity and reduced costs, and supply chain management benefits are just some.
Although integrating Enterprise Resource Planning software may take effort and determination as a manufacturer, business owner, or manager, doing so may prove worthwhile for remaining competitive and ahead in today's globalized markets. Get intouch with the best and most reliable manufacturing software solution for your business.
