What is ERP?
ERP (Enterprise Resource Planning) is a comprehensive high-end software used to manage all the processes of an organization and make it work in a more efficient manner. Basically, ERP integrates all the operations and information of all the departments in an organization in a centralized system. This way, all the departments have access to operations and information of all other departments. It ensures efficiency and eliminates data duplicity.
ERP for Manufacturing Industries.
For Manufacturing Industries, ERP is not less than a boon. There are multiple workflows in manufacturing industries that are very complex and require a high level of attention. In recent times, the manufacturing industry has gone through dramatic changes in production, supply chain, sales, marketing, and overall management system. In such times, it has become very important to know the role of ERP in manufacturing industries to define goals in a systematic manner which can ultimately help in making the processes smoother and efficient and results in business expansion.
Key Challenges faced by Manufacturing Industries and how ERP helps them:
- Procurement Process Management: This is a business process related to the procurement of goods and other needs in order to sustain. Procurement simply means getting goods and other needs from the best suppliers at the best possible price, which makes it important to get done in the most efficient and cost-effective manner. Not only raw materials but also includes spare parts, machinery tools, and other equipment. ERP helps organizations to streamline the procurement process and achieve desired results by saving time, reducing cost, and maintaining win-win relations with suppliers.
- Production Planning: Production Planning is crucial for efficient production. Production planning is the allocation of raw materials, workers, and workstations in order to fulfill the manufacturing orders on time. Handling few orders on spreadsheets is easy but when it comes to handling large manufacturing orders, complexities increase and require proper management. With the help of ERP software, manufacturing units can plan the procurement of raw materials based on the number of finished products to be manufactured. It also helps the organization in sales forecasting and makes it easier for them to get all the resources available for upcoming orders.
- Quality Control: In manufacturing, quality control is a process which ensures customer receive products with high quality which meet their need. In these times, product quality has become much more important for manufacturers than ever before. When a customer gets a high-quality product that fulfills their requirements, it will help organizations increase customer loyalty, gaining repeat business, business from referrals, and maintaining & improving their position in the market. It all starts and ends with data. With the help of good ERP software, organizations can collect and organize accurate data from internal units as well as suppliers and customers. By using this data in a proper manner, manufacturers can ensure good quality products.
- Inventory / Stock Management: Inventory management is a very crucial factor for the success and failure of the manufacturing industry. Insufficient inventory can disrupt the production system and excessive inventory can cripple the cash flow of the organization. It is very much important to maintain a good management system for inventory/stock. Inventory includes raw material, work in progress, and finished goods. ERP software can give accurate and real-time updates of all the raw materials available, work in progress, and finished goods ready to be sold through a centralized system between all the departments which makes it easier for manufacturing units to maintain stock.
- Warehouse / Storage Management: Having a solid warehouse management system is very important for manufacturers to become successful. Warehouse management is a process of optimization of warehouse operations from the entry of the inventory into a warehouse until it is moved or sold. It helps manufacturers know about how much inventory they have and where do they have this inventory. With the help of ERP software, manufacturing units can integrate warehouse management with manufacturing which will ultimately help them in increasing the traceability of their products and reducing the manufacturing gap.
- Supply Chain Management: Supply chain management is the management of the flow of goods and services including all processes transforming raw material into finished goods. It includes everything from procurement, production, stock management, warehouse, and logistic management. ERP helps manufacturing industries in managing the supply chain by making a centralized streamlined system from all departments. This eliminates the error of data duplicity and boosts efficiency at all levels and departments. With ERP software, it becomes very easy to manage such complex tasks.
- Sales & Marketing: Properly managing your sales pipeline is very critical for the success of any business. Global markets and competitions are making sales management very complex. An organization cannot rely on spreadsheets for maintaining its sales pipeline in these modern times. With the help of ERP tools like CRM, manufacturing industries can manage and maintain good relations with their customers and ensure quick responses with timely follow-up at every level of the sales pipeline. This way, with the help of this data, an organization can make their marketing strategies as per the consumer's behavior and ensures the better performance of their product.