Why Do Best-In-Class Organizations Use Manufacturing Resource Planning Software?

Posted in Operations Improvement on March 18, 2013

off-the-shelf-manufacturing-software | Photo Courtesy of Direct Annuaires Stephan Comelli http://www.flickr.com/photos/52499398@N06/4837832285/sizes/q/

Is off-the-shelf manufacturing resource planning software the best solution for your framework? Or is the answer an in-house solution?

The answer is both, according to research from the Aberdeen Group. A blog post on the company’s website found that a “combined perspective increases the company’s ability to prepare for what’s next, and a better way to build their future on their own terms.”

The article continues: “Basically, manufacturing operational data systems best practices aren’t a build versus buy discussion, but rather a better way to address the challenges companies face.”

Indeed, while software can support data management and enables a company to catch up to the industry’s growing technology needs, in-house efforts are typically tailored to the company’s specific needs.

The study, which assessed Manufacturing Operations Management (MOM) best practices, found that the top concerns among manufacturers are reducing costs (67 percent), increasing customer satisfaction (41 percent), maximizing productivity (38 percent) and ensuring quality (37 percent).

The biggest takeaway is the comparisons between low performers and best-in-class achievers. Best-in-class organizations raised their margins by 6 percent, increased their new product introduction success rate by 21 percent and cut operational costs by 3 percent.

Moreover, these organizations went paperless through automation, a manufacturing cloud dashboard and on-demand reporting. They subscribed to collaboration, process optimization, data-driven transformation and innovation.

Best-in-class manufacturers also see huge value in their data systems. A total of 84 percent use customer relationship management (CRM), compared with only 42 percent of the other companies; 67 percent use supply chain management (SCM), compared with only 47 percent of the other companies; and 38 percent use Big Data and analytics, compared with 23 percent of the other companies.

One similarity between low performers and best-in-class organizations is that almost all see the benefit in using manufacturing ERP software. A total of 80 percent of best-in-class companies use an ERP system, while 75 percent of the other companies use it.

The industry’s top performers are keenly aware of the payback from data point solutions.

Source: Aberdeen Group, January 2013

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