5 Reasons To Use Manufacturing ERP Software
Posted in Cloud ERP on July 25, 2013
You can’t plan your production in fire drills and react to emergencies as they happen. Manufacturers must plan their future in an ERP system.
The heart and soul of manufacturing ERP software is the ability to plan. Your goal should be to maximize material and labor; you don’t want your dollars tied up in inventory.
Manufacturers who use an ERP system to plan and schedule jobs get the most out of their labor and equipment. You want to take care of your two most important resources: people and money.
Here are five reasons you should use manufacturing ERP software to plan.
- Track historical usage for future planning:The major value in an ERP system comes from its ability to plan for what’s going to happen in the future. The only way to look into the future is to take a look at what’s already happened in the past.By tracking your history, you can maximize the allocation of your resources, and that information allows you to effectively plan for your resources in the future. You’ll know what you sold, to whom you sold it and when you sold it, allowing you to forecast for future sales. You can take that information and use it to ask meaningful questions about what’s going to happen in the future so you’re able to accomplish your goals.
- Make and implement changes quickly: Using an ERP system allows you to make changes quickly and to implement them with the least amount of impact. You can’t just throw people at a problem and tie up money in inventory; you need to know what to purchase, when to purchase it and how much money it will tie up. You want to give yourself the best leverage.
- Plan ahead while adapting quickly: Planning is something you do once a year, but manufacturing ERP software allows you to tweak your plan as you go through the year to account for changes over time. In a typical planning phase, plans get reviewed once a quarter or every six months, but an ERP system allows manufacturers to look at their business plan in much shorter time increments, planning even month-by-month to adjust for the reality of a changing industry and business environment.
- Flexibility to prepare for all outcomes:In predictive analytics scenarios, the longer history you have, the more analysis or planning you can do going forward. If business changes, you want to be able to plug in different scenarios to predict an outcome.With detailed history stored in an ERP system, you have the power to be flexible. You have an idea of what’s happened in the past and what’s coming down the pipe, but you can still play with numbers to change your planning model. That operational flexibility is important for businesses trying to balance their growth.
- Growth at your scale:A cloud-based ERP system allows manufacturers to scale the software to their environment.“When a company has broken processes, a bloated cost structure and silos of data fragmented through the organization, it is simply not able to scale effectively as it grows,” notes a Panorama Consulting article. “This is where new software often provides the most benefit, especially for organizations that are experiencing aggressive organic growth or engaging in merger and acquisition activities.”
At the end of the day, you want to know how to run your business as efficiently as possible at the lowest cost. The value of manufacturing ERP software comes down to that: producing the right products, selling them to the right people and operating at the right profit margin.