A new ERP system provides a vast amount of data, all of which can be used to help grow and improve your business
Manufacturers worldwide are implementing or replacing enterprise ERP software for a number of reasons. The top five are:
- The need to reduce operational costs
- The need to manage growth expectations
- The need to be more responsive to customers
- To reduce time-to-decision
- To increase interoperability between multiple locations.
Underpinning each of these requirements is one thing – pertinent information derived from accurate data. Without accurate information:
- It is impossible to identify operational inefficiencies accurately
- Growth expectations are essentially “best guesses”, not well-informed forecasts
- Customer service offerings are generic, where they would instead expect a tailored experience
- Decision making takes much longer as information must be collated manually (assuming it exists in the first place)
- There is little point in sharing information between locations as it will not help inform decisions or efficiency savings in any way.
“75% of businesses using ERP realised benefits directly from improved availability of information.”
2012 ERP Report – Panorama Consulting
Accurate information to reduce costs
Any ERP software system you choose for your business should record performance metrics for your processes. You can then:
- Monitor processes for high or low performance
- Identify bottlenecks which reduce efficiency
- Identify redundant processes
- Identify processes which could be replicated elsewhere in your business.
“Leading midmarket organisations achieved a 14% reduction in operational costs as a result of ERP.”
ERP in Manufacturing – Aberdeen Group
Accurate information to manage growth expectations
The ongoing financial crisis is forcing businesses to become more flexible in their operations. Your ERP software should provide tools which allow you to accurately plan for:
- Increases in demand
- Drops in demand
- Expansion into new markets.
“If you have to forecast, forecast often.”
Edgar R. Fiedler, US economist
Accurate information to improve customer experience
Improved customer service is becoming increasingly important for distinguishing your offerings from those of your competitors. To offer a truly personalised service means “knowing” your customer. A full-featured ERP system can help by:
- Providing instant access to customer purchase history
- Assisting with cross-sell and upsell opportunities based on customer preferences
- Providing staff at all levels throughout your organisation with the data required to improve customer experience and provide exceptional service
- Improved access to integrated information also reduces the order to ship cycle time.
“Best-in-Class manufacturers report an 18% improvement in cycle time from service completion to invoicing.”
Accurate information to improve decision-making
The very best business decisions are based on accurate information. ERP software can:
- Provide instant access to up-to-the-minute data and metrics allowing strategic decisions to be made more quickly
- Analyse historical data to identify trends and prepare for them in advance
- Identify service failings or under-performance, allowing remedial action to be taken.
“27% of manufacturers reported a lack of timely information causing delays in decision-making.”
ERP in Manufacturing 2012 – Aberdeen Group
“The Best-in-Class [companies using ERP] are 144% more likely than all others to better utilise resources.”
ERP in Manufacturing 2012 – Aberdeen Group
Accurate information to improve interoperability
If your company maintains facilities in a number of locations or is part of a larger group, data sharing provides additional opportunities for growth. Your new ERP system could:
- Provide an overview of your entire supply chain and manufacturing performance
- Allow instant access to best practice solutions and processes to be implemented elsewhere
- Aggregate additional information to help further improve business decision making.
“Since the recession, the ERP has given us the ability to write reports to analyse the data in new ways we wouldn’t have been able to.”
Leonard Hartka, IT Director, Sun Automation Group
Hesitating on getting ERP? Download this eGuide and find out why it is essential to your business. Don’t put it off! Five reasons why you shouldn’t defer your ERP project now!
First published on Sanderson Manufacturing blog.Business & Finance Articles on Business 2 Community