Making the Leap to ERP in 2018 Provides Many Advantages to Business
As 2017 ends, one universal ‘to-do’ item has not changed: find every advantage available for your business. Here are five advantages ERP can give you in 2018:
ERP Advantage #1: Supply Chain Automation (SCM)
We used to believe that supply chain management (SCM) starts with procurement from our suppliers and ends with a shipment to our customers.
Sure, there are a few stops at departments within your organization along the way—finance, operations, inventory management—but that’s it.
As technology has evolved, markets have become more complex, and customer expectations have increased, it’s become necessary to involve more departments within the organization in the supply chain.
Thankfully, as it’s become more and more crucial that departments and functions not previously considered in SCM join the fray, innovative companies have created systems to address that change.
One of the best solutions is enterprise resource planning (ERP).
ERP is a gift to supply chain managers, as well as anyone in a company who wants to monitor or improve its performance (which should be everyone!).
The right SCM management suite can:
- Improve productivity
- Reduce costs
- Decrease production time
- Reduce errors
ERP Advantage #2: Improve Productivity
Another advantage ERP can give you is increasing productivity by automating many processes that are manual and time-consuming. If your employees are spending time creating and updating spreadsheets, the gains here can be huge.
And because ERP solution providers learn with each implementation and update their offerings accordingly, those automatic processes are built on years of experience and industry best practices.
The time your employees—from finance and accounting to procurement and fulfillment—save on busy work allows them to focus on other things, like looking for opportunities for increased efficiency and boosting customer satisfaction.
ERP also loops human resources into the overall picture, which means all the data collected can inform HR decisions about the needs for training, staff changes, and shift reorganizations.
ERP Advantage #3: Reduce Costs
When one source of truth is used to inform decisions about procurement, production, and tracking orders, it’s much easier to see where you can be lean on inventory, and where you need to create a safety supply.
Reducing obsolete stock is one of the best ways to reduce costs. And a safety supply means fewer production disruptions, backorders, and dissatisfied customers.
In addition, having a more holistic view into how much inventory you need provides opportunities to make deals on bulk orders.
That data can tell you the best time to manufacture products.
Sometimes it makes sense to keep components on the shelf, but other times, it’s safer or more efficient to keep assembled parts easily accessible. ERP solutions provide guidance on both.
With that data—heavy movers, obsoletes, etc.—marketing and sales can be improved as well.
If you’re sitting on a lot of slow-moving inventory, marketing and sales can boost their efforts to move those products.
And vice versa.
Marketing and sales often have their ears to the ground on what their customers are looking for in the coming weeks or months.
Giving them access to data in the ERP system in real time (and on their mobile devices) allows them to better meet the needs and desires of these customers.
ERP Advantage #4: Decrease Production Time
In days past, a company would receive an order, an employee would input the order, another employee would check to see if the necessary parts are in hand and order if they weren’t, someone else would receive the order for parts and stock them.
Only then could final assemblies be manufactured.
Manual, staff-heavy process that could take days or weeks.
But an ERP system does all that in a matter of seconds, without human involvement whatsoever.
If the right parts aren’t in stock, an ERP can see if they are available in another location, or which supplier can ship them the most quickly.
If different tools are needed to produce the assembly, ERP can alert the machine set-up crew to have the new tool in place as soon as the part arrives.
And the software will keep track of the other orders on hand and how they might influence different machine needs to make recommendations for greatest efficiency.
ERP Advantage #4: Reduce Errors
With older, more manual processes, human error is almost an inevitability.
Even your smartest, most accurate employee has bad days.
The best designed spreadsheet will encounter problems with out-of-date information and version problems once it’s been passed around a few times.
Since ERP systems automate many of the processes and calculations that had been performed by employees in a spreadsheet, the probability of errors is reduced substantially.
ERPs also track repeat behaviors and trends, which allows predictive analysis, taking much of the guess work out of inventory management—a source of stress for many employees.
If you’re small- to medium-size company is looking to grow, then 2018 is the year you need to embrace ERP.
The four reasons we listed above should be compelling enough to get you started down that road.
But perhaps the best reason is what all those other things add up to: an uptick in profits.
An ERP solution can help your company become more productive, leaner, more accurate, and smarter, which leads to happier customers and suppliers.
Happy customers are repeat customers, and that drives the bottom line.
If you’re ready to start the ERP journey, get in touch, or read more about how it’s helped other businesses in our Resources section.