An Enterprise Resource Planning (ERP) system is compiled of several different business applications which are all integrated within the system as a whole, but each individual function serves to manage specific areas of an organization. This can be confusing to some, but ProcessPro, an ERP software vendor that provides process manufacturing solutions, highlights how utilizing a fully integrated ERP solution can help address and solve six common challenges faced by process manufacturers.
1. Inventory Management
When it comes to controlling inventory, it’s important to find a balance between having too much or not enough. Maintaining the right quantities of the correct inventory ensures that a company or organization can meet the demands of its customers. Lead time should be factored in when considering inventory because waiting until your material supply is totally depleted can create problems.
The inventory management application of an ERP system provides manufacturers the transparency and inventory counts necessary for enhanced production planning. Starting with a customer’s sales order, the inventory is accounted for and any shortages are noted immediately. If there are deficiencies, the ERP will then automatically change the status of the inventory order to make it unavailable for any additional sales requests. Other functions involve monitoring item usages and reporting on inventory status.
2. Real-Time Data
Real-time data is accounted for instantly after it has been entered. In a rapidly changing production environment, this type of up-to-date reporting is critical for production to succeed and is beneficial for all functions within the ERP system.
3. Raw Materials Lot Traceability
Manufacturers have to resort to manually entering numbers into spreadsheets when they don’t have an ERP system. The issue with this is producing accurate entries in complex manual entry spreadsheets to keep track of raw material lot numbers used in multiple finished goods and shipped to numerous customers. Enter ERP. An ERP system offers both forward and backward lot tracking where information can be accounted for from the beginning of the process to the very end.
With a lot traceability feature, quality control and quality assurance are added advantages. Manufacturers can quarantine raw materials and finished goods until they pass inspection from the FDA, assuring that a brand name product is of the right quality a consumer is seeking will ultimately benefit both sides of the market.
4. Material Requirements Planning (MRP)
MRP is another part of an integrated ERP system that addresses the challenges of managing resources. Production planning optimizes and utilizes manufacturing capacity and material resources using historical production data and sales forecasting. When implemented properly, MRP reduces cash flow and increases a company’s profitability by calculating the optimum production schedule based on the master production schedule, sales forecasts, inventory status, and open orders.
MRP can also reduce waste by providing information about purchasing the right amount of inventory at the right time, and determines the latest possible time frame to produce goods and purchase raw materials while still meeting customer deadlines. With the use of MRP in an ERP system, modifications to the production schedule can be updated immediately for any changes in orders and/or materials.
5. Real-time Reporting
Leveraging the right reporting capabilities in an ERP system can create a tool for data visibility. Database information is automatically updated in real-time with each transactions throughout the system allowing for optimal accuracy. The data allows you to determine precalculated summaries and target projections. The compiled data in an ERP system can be designed to match a company’s personalized requirements and allows for ease of internal and external distribution of reporting data.
6. One Source of Data
Regardless of the number of applications a company implements, there will always be one source of data with an ERP system. Without the use of an ERP, companies spend valuable energy and time pulling together fragmented data from different spreadsheets, accounting sources and sales orders to discover the company’s overall financial position. By implementing a fully integrated ERP system, significant amounts of time can be saved by eliminating dual entry of information and needed to perform data searches in various places.
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