Business is good, but it could be better. Financials at the end of the month come with some surprises, and some work proceeds more depressingly than well. There is unaccounted-for inventory and too many spreadsheet files. Nevertheless, resolving these issues can be costly.
Small and medium-sized companies are right to ask whether they really need a comprehensive ERP system. The answer depends on what you’re currently experiencing on your shop floor, and what the next best purchase is for the best returns.
Here are 10 signs that you may be ready for a perfect ERP system
1. Off-the-mark Product Cost
Given the complexities of manufacturing, it can be difficult to know the actual cost of each product. But the more you can track at your plant, the more you can understand and estimate true costs, bid and plan accordingly. By tracking the cost of materials, along with the time spent on each task at each station, a clearer picture begins to develop over time, and this knowledge can be accessed by your entire team. Without a well-integrated ERP system, it is very hard to get the big picture on each project.
2. Non-Integrated Systems Slow Things Down
When systems don’t communicate project information, humans are left with all of this heavy lifting. A lot of time and money goes into managing multiple databases and cross-checking information. Maybe you use a system of spreadsheets, some accounting software, and some notes that only you and those close to you can understand. This limits the information needed, and controls production at the speed of one person.
An integrated ERP solution will not replace your expertise and knowledge, but it will share it. And it will provide the team with a source of truth. It can increase employee productivity, create a consistent user experience, and break up silos around your departments by enabling real, real-time connectivity.
3. Incorrect Inventory
Incorrect inventory has a bad spillover effect; If you keep everything too high, it will force you to use up storage space, tie up cash flow, and long-kept items can become damaged, forgotten, or obsolete. On the other hand, if you keep too little, missing inventory will halt production, forcing additional costs due to expedited shipping of missing parts and ultimately delaying delivery.
If you struggle to track inventory accurately at multiple points, and this has become detrimental to the bottom line and customer satisfaction, then an ERP system can be highly beneficial, as it supports MRP (Material Resources). Planning) is an extension of the software.
4. Persistent Production Scheduling Problems
The relationship between production scheduling and a manufacturer’s ability to make a product profitable and on time is not tenuous. This is always associated, especially given the rising cost of both staff and machinery. In short, you want to get the most bang for the buck on your shop floor, and not misalignment on project routing and machine time allocation.
An ERP will provide important planning functions based on actual supply and demand data as well as forecasts to deliver accurate and timely production plans. And the main benefit would be the much-needed help of data to guide scheduling in the right direction, instead of burdening key employees with the headaches and stress of scheduling.
5. Unhappy Customers
A customer’s expectations 20 years ago were very different from what they are today. Clients are less forgiving, perhaps because they have so many options to contract or subcontract. Or is it because they face pressure from customers that they even keep the manufacturing chain in place to deliver on the promises? An unhappy customer is less likely to come back to you again, and a lack of repeat work from your established relationships will mean you always have to grind it out on a sale.
An ERP system makes data available to both you and your customers.
6. Communications Silos
Left unchecked, manufacturers will have separate departments in their operations, each with different systems and processes. Before you know all that, the left-hand does not know what the right hand is doing. Because of this, there are high chances of errors during the transfer of data from one department to another. And then a costly game of broken telephone follows.
The biggest advantage of ERP systems, both in terms of cost- and headache savings, is centralization and access to information and production communications. Furthermore, an ERP system will not only facilitate internal communication and workflow, it can also directly connect a manufacturer with both suppliers and customers. Direct relationship with suppliers streamlines inventory and enables on-time manufacturing. Direct relationship with customers automates the sales order process and minimizes delivery penalties.
7. Enhancement of Schemes
In short, businesses prefer to implement an ERP system because they require improvements in internal business processes and overall business performance. They want to reduce labor costs, IT expenses, and improve the interaction between employees & companies.
All this translates into the foundation of development. An ERP streamlines and optimizes production using existing resources while providing the information framework for scaling up. A modern ERP shares not only information but production knowledge across the workforce, meaning anyone can jump in to advance production.
Businesses that have plans for continued growth and expansion of operations will want to have their ducks as soon as possible. This means scalability, and an eye to the future—things that ERP can help with.
8. Manual Business Processes
This goes along with the idea of working in silos, or in other forms that are constrained and restrictive when it comes to moving things smoothly. Your software should align seamlessly with your business processes. Excel has been wonderful for companies large and small, but it is not the system to run your business. True ERP will automate data capture, manage electronic orders and payments, and provide alerts when needed – no manual ‘lifting’ required.
9. Difficulty in Extracting Meaningful Data
If you don’t know where you are (or where you are for that matter), how can you know where you are going? If you can’t say with certainty one version of the truth about how business is going, you might not have meaningful data.
Modern ERPs are built to provide BI (Business Intelligence) even for small and medium-sized manufacturers. It’s not about trash-in-trash-out; It is about having KPIs that can be easily defined and tracked based on high-integrity data. Critical information should be in the hands of key decision-makers and should be on demand, if possible.
10. Maintaining and Reporting Appropriate Data to Regulatory Agencies
When put side by side, the words ‘manual reporting’ do not excite anyone. The tedious task of reporting that your products meet the required standards and practices is three things: mind-numbing, time-consuming, and largely automated.
Modern ERP solutions allow you to accurately capture data and then convert it into standardized reports required by the regulatory agencies governing your industry. It’s one less thing your people need to do, freeing up resources for other tasks that bring more value.
An ERP system is as much a foundation for development as it is a pain reliever from the complexities of production.
Contact Us to Get Started
So whether you are looking for greater heights in manufacturing or the level at which production is currently underway, an ERP should at least be considered a possibility. And the best part: It does not take much time to investigate the possibility. We could be one place to start with a short call or a demo with the UdyogVeda ERP team at your premises or even on your computer screen through a screen-sharing system. We have a system in place that we can say with complete confidence that the manufacturers need to address all the issues listed above. Contact Us.