Understanding the Concept of ERP Software in Manufacturing
Enterprise Resource Planning (ERP) software allows companies to view and manage all aspects of their operations using one software solution, making it easier to manage production and business operations. Custom ERP systems are built to be highly scalable, making them easy to integrate into business processes and scalable for future changes.
Manufacturers benefit from using an ERP system, as its primary function is to increase efficiency and provide valuable insight into resource utilization. Manufacturers can use these insights to identify production bottlenecks, supply chain holdups, and employee performance.
The data gathered with manufacturing ERP software allows companies to make informed decisions regarding reducing the materials needed to produce a high quality product, a critical function to increase profitability.
Types of ERP Software: On-premises, Cloud-based, and Hybrid ERP
Manufacturing ERP systems can be implemented in three different ways, depending on the company’s abilities and preferences.
- On-premises: An on-premises ERP system delivers the application from a company’s on-site data center. The company will be responsible for software updates, licensing, security costs, and IT staffing. Utilizing an on-premises ERP system will include an upfront cost for the software and the cost for any required system maintenance.
- Cloud-based: A cloud-based ERP system is provided through the internet and is typically a Software as a Service (SaaS) product. Since it’s standard to access these solutions through a web browser, the SaaS provider will be responsible for any updates, licensing, maintenance, and security costs based on the subscription fee.
- Hybrid ERP: A combination of the previous types of ERP software, a hybrid ERP solution manages part of the system in the cloud and part on-premises. This type of ERP software is also referred to as two-tier ERP.
Benefits of Implementing ERP Software in Manufacturing Operations
A manufacturing ERP software solution provides companies with valuable benefits toward operational functions and financial management. Let’s review a few of the significant benefits companies can experience with ERP software.
Improving Reporting and Planning with Real-Time Data
Having access to real-time data allows companies to make informed decisions about their processes and financials. Some ERP systems include dashboard capabilities, allowing users to view data in comprehensive charts and graphs. This also gives business leaders increased visibility into operations and lets them access real-time data to monitor performance.
Increasing Operational Efficiency
Since ERP systems can be integrated into all manufacturing processes, companies can gather and analyze data for their operations. This data can identify areas for improvement and make it easier for companies to monitor the improved efficiency. With the reporting capabilities, companies can also monitor improvements to measure the improved functions.
Enhancing Collaboration and Communication Across the Supply Chain
ERP software improves supply chain management through a centralized communication platform with inventory management functions. An ERP system with supply chain management features can include an active contact list, communication records, and real-time inventory data. Together, these features make it easy for multiple ERP users to access and manage different aspects of the supply chain.
Steps to Successfully Implement ERP Software in Manufacturing
Implementing a new ERP system into a manufacturer’s daily operations can be intimidating. To have a successful implementation, include the following steps when approaching the development and implementation process.
Evaluation and Selection of ERP Software
When browsing for the best manufacturing ERP software, companies should consider the following features to get the most value out of the solution.
Scalability
Having a manufacturing ERP system that is highly scalable will ensure it can grow with the company. A scalable solution will be able to add additional users, adapt to increased volumes of production, and add any new functions or features as a company grows.
User-Friendly User Interface (UI)
For a software solution that will be used by a large number of users, the user interface must be easy to navigate. A common challenge manufacturers face when integrating a new software solution is ensuring users use it correctly. A simple way to make it easier for users to manage is by having a UI that is logical and includes minimal steps to complete a function.
Integration Capabilities
Having an ERP system that can be integrated with legacy solutions can be beneficial if a company doesn’t plan to transition all operations at once. ERP systems can also be integrated with equipment sensors and other manufacturing software systems utilized by a company, increasing the management capabilities.
Developing Manufacturing ERP Software
Implementing a new system into a manufacturer’s daily operations can be a complex and intimidating process. Making the implementation processes easier starts with the development of the ERP software.
After assessing the current practices and processes a manufacturer follows, companies can determine the requirements of the ERP software needed to improve operations. The manufacturer will work with a software development team to identify processes, integrations, and workflows that must be included in the ERP system. This will ensure the system is built to a company’s unique needs and performs all the functions needed to be successful.
Another step that is crucial for simple implementation is testing the software. Before the ERP solution is deployed for use, it should be thoroughly tested to identify and resolve any defects. This ensures a smooth user experience with a high-quality ERP system.
Training and Support for Employees
Once the ERP software solution is developed and ready to go live, there are steps that can be taken to ease the implementation process, including:
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Training: Offer users extensive training sessions to ensure they use the ERP system as intended. This training should include a change management plan outlining the transition into the new system. This will ensure the system is being used properly and the company gets the most value from the product.
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Data Migration: Increase the value of the ERP system by migrating any data from legacy solutions. This can allow users to compare real-time data to historical trends.
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Implement in Phases: If a company is concerned about implementing a new system all at once, consider phasing users from the legacy solution until the entire company is using the new system.
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Support: Companies should expect regular support and maintenance costs to keep the system updated and running as expected.
The Impact of ERP Software on Manufacturing Operations
The manufacturing industry is constantly evolving to incorporate new technology that improves operations. ERP software makes it easier for manufacturers to manage operations and access reporting and dashboards with real-time data. This allows companies to make well-informed decisions and optimize business processes and manufacturing operations backed by data.
If your manufacturing business is ready to implement an ERP system, contact Geneca today! Our team of experts is ready to build a solution that streamlines your operations and gathers data to generate valuable insights.