ERP for Manufacturing: Considerations and Recommendations

ERP for Manufacturing: Considerations and Recommendations

ERP software solutions are cornerstones to modern organizations that specialize in manufacturing and industrial applications. What’s more, integration is highly paramount, when it comes to ERP for manufacturing. By cultivating a single view of company data, the organization can substantially improve information flow, data consistency, and collaboration across department boundaries.

When evaluating the characteristics of ERP, business leaders and managers should consider several key attributes that generally define ERP for manufacturing:

  • The system is integrated across departments and business functions, and offers real-time data updates to users.
  • ERP generally uses a single, common database across the enterprise, to facilitate data consistency and uniformity in all departments.
  • All modules in the ERP suite should use a common user interface, which simplifies training and eases change management.

These features of ERP software reflect the importance of integration and sharing information across the enterprise. Without ERP for manufacturing, automated data exchange across departments can be limited, redundant data entry may be required, and reporting inconsistencies are often a problem. An ERP system therefore allows information to flow freely across departmental boundaries, which simplifies reporting and improves decision-making.

ERP for manufacturing: what it does

ERP for manufacturing aids in improved planning and managing of resources across an enterprise, by collecting, storing, managing, and interpreting data. Depending on the size of a manufacturing facility, its ERP requirements and its budget, manufacturers may use an all-in-one ERP solution such as Oracle NetSuite or Sage Intacct, or a dedicated ERP for manufacturing such as Acumatica or SYSPRO

ERP for manufacturing: why it’s needed

Implementing an ERP for manufacturing should effectively centralize all your business processes into a unified hub. You need this solution to be able to access all your essential business data with greater ease and visibility. It will improve your operational workflows with improved cross-departmental data sharing, and reduce business expenses by identifying redundant tasks and inefficiencies. You can expect more streamlined operations and a stronger compliance due to consistency in documentation. 

ERP for manufacturing: the benefits 

According to cloud-based ERP vendor NetSuite, to explain the benefits that ERP brings to manufacturers:

"Modern ERP delivers a foundation for manufacturers to run their business from customer orders all the way to manufacturing production, from orders to cash. The best ERP solutions do much more than just provide "dumb" process steps, because it enables manufacturers' profitable growth through integrated financials, reporting, management, inventory tracking, and asset utilization.

Customization and encapsulation of best practices is one out of many benefits of ERP for manufacturing. The best software incorporates the manufacturer's own data along with industry metrics such as SCOR or ISM, as well as the software vendor’s aggregate industry knowledge. Yet another important feature of ERP is the ability to merge customer insights with a 360-degree view of the business, to ensure that changes in customer buying patterns intelligently propagate through the entire enterprise and alter manufacturing production schedules and inventory levels.

ERP for manufacturing: factors to consider when choosing the right software

The very best ERP ensures clear alignment between strategy and execution - translating tactical goals into specific business actions that support the organization's strategic intent. When it comes to ERP for manufacturing, here are several points to consider when evaluating potential ERP software systems:

  1. Focus on operations. Be sure the ERP software is capable of handling all your business processes and important operations. Integrated inventory, work orders, and forecasting are key elements to consider.
  2. Look for profitability. After covering operations, the next step is managing pricing, cash, demand, inventory, and the other elements that lead to profit.
  3. Build in manufacturing efficiency. Achieving profitability requires manufacturing control, such as MRP and demand planning.
  4. Enhance customer service. Integrated CRM software, fulfillment, and so on can help increase customer retention, leading to a virtuous cycle of sales, operations, delivery, and profitability.
  5. Plan strategically. The single view of data in an ERP should provide more complete, timely, and accurate reporting than ever before. This becomes the lever for improving operations, while also leading projects to be profitable and ensuring customer satisfaction.
  6. Establish early organizational alignment around goals, requirements, and capabilities. Conduct periodic reviews to ensure the ERP technology continues to meet those needs.

Achieving these benefits often requires an extensive implementation process, when it comes to ERP for manufacturing. Frequently, this involves changing and improving your processes, which can be a source of temporary disruption to the company. ERP implementation issues can involve risk of delay and cost overruns, particularly for large companies, which explains why some ERP buyers criticize it as potentially expensive and difficult to deploy.

ERP for manufacturing: factors to ensure implementation success

When selecting and implementing ERP for manufacturing, it is worth noting whether the client is manufacturing fast moving consumer goods, chemicals, or food and beverage, their requirements and challenges are quite similar. However, there isn’t a single best ERP for manufacturing and you cannot expect the same solution to have equal success for two different business setups, as multiple varying factors contribute to it. 

Therefore, it is best to hire an ERP consultant to support and guide the deployment process. Start by setting up a meeting with consultants of ERP for manufacturing to discuss the unique requirements of your business before narrowing down to your final choice. In addition to that, some other factors can contribute to the success of your chosen ERP, which are:

Evaluating the ERP user interface

When evaluating ERP for manufacturing, it is essential to consider the usability of the interface to make it easier for your teams to opt for it. Younger team members are specifically more prone to losing interest in software that lags behind in delivering the expected user experience. Choosing an ERP for manufacturing with higher usability will lead to better employee retention. 

Emphasizing on ERP integration

An ERP with IoT capabilities can gather and analyze a huge volume of data from multiple resources, but it is only of use if you have processes that are capable of integrating this data. It is important to define these integrated business processes while selecting an ERP for manufacturing. We recommend focusing on building processes that can provide actionable information through data integration.

Training your team to understand ERP goals and advantages

For your business to be able to enjoy the many features of ERP for manufacturing, it is essential for your workforce to be comfortable in using it. While most people resist new technology leading to low user adoption, easing your team into a properly paced training can make this better. Also, for instances like these, having a change management plan in place can prepare your team to embrace the change with ease. 

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