When ERP systems first came into the market, manufacturers were among the first business of any kind to use them. As manufacturers are typically looking to streamline the manufacturing process, an ERP solution can help automate their business processes, paperwork and data collection so they can focus on making the actual product. While it’s important to remember that each business will have unique ERP requirements, Tom Miller, writer for ERP Focus, reminds us that manufacturers of all kinds should look for these four requirements listed below.
Today, the ERP market is thriving with many possible manufacturing ERP modules to choose from. However, the process of searching, evaluating, purchasing, and deploying an ERP solution is not as simple as it once was. There’s no such thing as a one-size-fits-all approach when it comes to ERP software. Solutions today come in a variety of different flavors, each features a particular set of capabilities, strengths, and drawbacks. Choosing the right vendor and solution is a complicated process—one that requires in-depth research and often comes down to more than just the solution and its technical capabilities.
Manufacturers use ERP systems so they can invest more in the people who are making the product. The software takes the complexity of knowing when to order materials, forecasting demand and managing raw materials off the employees, allowing them to focus more on process management.
Match ERP Capabilities to Business Requirements
In his article, Miller points out that there are many types of manufacturing businesses which may require different ERP features not associated with others.
“There are ERP systems for process and discrete manufacturers as well as make-to-order or make-to-stock businesses. Many of the distinctions show up in inventory and work in process modules. A discrete manufacturer will have components made into a product based on a bill of material. Usually, the quantity of a component is a fixed ratio needed to assemble a quantity of the product. A process manufacturer will use a recipe to combine ingredients and processes to yield a loaf of bread. The ingredients might be fixed per the batch and might be variable based on the expected output quantity. Inventory and work in process are the largest assets in a manufacturer’s balance sheet, so matching the ERP treatment of these assets to the business will help result in accurate financial statements.” he explains.
As market trends and customer demands change over time, so do company goals and needs. Manufacturers today must have the ability to react quickly to changes in supply and demand and continue to deliver products on time and profitably. This allows for changes to be made to any process and gives manufacturers the opportunity (and agility) to scale with any changes that they need to meet. By doing so, ERP software gives them the agility they need so processes can be easily customized to suit the requirements of the business. A manufacturer that can react to unexpected events with agility can satisfy unexpected customer demands and continue to supply their customers when supplies shortages develop.
Improve Customer Relationship
Your ERP system should help bring together data that better enables salespeople and marketing planners alike to better address customer needs, preferences and buying patterns. A CRM component allows you to do this by keeping track of all of your customer and sales data within your ERP solution. The insights you can gain from a CRM component helps optimize your marketing and sales efforts. It also helps to better manage invoicing activities, provide relevant and real-time information for the best prepared proposals and monitor the overall status of contracts to help you gain a better understanding and be kept informed at all times.
A big benefit from CRM is tracking the buyer histories of your customers. With this data in hand, you can suggest additional purchases through cross-selling or upselling, or try to sell them a relevant product/service when they’re otherwise not as likely to buy.
According to Miller, manufacturing ERP systems today have powerful analytic engines that we can use to develop executive dashboards and guide users throughout the business to make decisions that will optimize the results for the enterprise. The same analytical tools are useful for ad-hoc analyses of all kinds helping ERP users identify trends and take advantage of opportunities.
Looking for more? Download our ERP Buyers Guide for free to compare the top-24 products available on the market with full page vendor profiles, key capabilities, an ERP software market overview, our bottom line analysis, and questions for prospective buyers.
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