How Can Manufacturing ERP Software Increase Innovation?

Posted in Cloud ERP on July 22, 2013

manufacturing-ERP-innovation | Photo Courtesy of Depositphotos

Does your company have a central hub? If not, manufacturing ERP software can serve as that hub for communication, integration, improvement and innovation. ERP needs to be part of your organizational culture.

According to research from the Aberdeen Group, 62 percent of best-in-class organizations have a standardized communication method to deliver the company’s vision. The article includes an infographic  that shares the value of manufacturing ERP software in resolving issues. The efficiency that manufacturing ERP software brings to organizations leverages the capabilities and strategies they want to put in place.

Manufacturers want to make investments in developing strategies, building new capabilities, implementing new technologies and expanding to new markets. An ERP system enables manufacturers to accomplish these goals while overcoming the pressures and challenges in the market.

The infographic shares key findings of how manufacturing ERP software can drive continuous improvement and innovation.

1) Pressures and challenges facing manufacturers:

  • Need to reduce costs — 67 percent
  • Need to maximize productivity — 38 percent
  • Pressure to innovate to deliver more value to customers — 17 percent

2) Capabilities and strategies used:

  • Cross-functional continuous improvements — 65 percent of best-in-class organizations vs. 46 percent of others
  • Business analytics integrated into ERP — 55 percent of best-in-class organizations vs. 40 percent of others
  • Use dynamically updated and optimized business processes — best-in-class organizations are 87 percent more likely than others to do this practice

3) Results:

  • New product introductions — 96 percent of best-in-class organizations vs. 74 percent of others
  • Increase in profit margins from the past two years — 18 percent of best-in-class organizations vs. 6 percent of others
  • Receive data needed to make decisions — best-in-class organizations say this happens 78 percent of the time

Remember, manufacturers need to deliver on cost and quality, which is why they must be able to analyze ways to reduce costs and improve efficiency. In addition, in order to be a best-in-class manufacturer, an organization must have solid analytics. Continuous improvement is all about having a strong understanding of your baseline and a strong method for tracking and measuring which areas you can impact from a continuous-improvement standpoint over time.

Source: Aberdeen Group, June 2013

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