Implementing ERP for Manufacturing Companies
Updated: Aug 1
Manufacturers rely heavily on effective workflow processes to sustain productivity and match the needs of the dynamic customer requirements. Companies in the manufacturing industry continuously look for ways to optimize operations and maximize efficiency. Technological advancements are significantly transforming how companies operate. Businesses strive to enhance team collaboration and streamline processes throughout the entire value chain. ERP systems help companies achieve these goals.
ERP software enables the operation of all processes within the manufacturing lifecycle from a single optimized platform, facilitating digital transformation. Although most organizations report business process improvement after ERP implementation, the implementation process is an intricate undertaking.
This guide explains the role of ERP in the manufacturing industry and highlights steps for successful implementation.
What's a Manufacturing ERP
Manufacturing enterprise resource planning software is a solution that helps manufacturers automate and digitize core business operations. It allows you to run your company more efficiently, increasing production speed and accuracy. Therefore, ERP for manufacturing companies helps save valuable resources.
ERP solutions enable manufacturers to manage crucial processes and leverage accurate data. They optimize resource utilization and offer insights to help you make informed strategic decisions.
Most ERP platforms feature a diverse set of functionalities such as:
Finance and accounting.
Order and inventory management.
Supply chain management.
Customer relationship management (CRM).
These features support back-office, front-office, and shop floor operations. Some manufacturing ERPs have artificial intelligence (AI)-backed reporting tools for accurate analysis of progress.
Types of Manufacturing ERPs
There are varying types of ERP software for manufacturing companies. They include:
01. Generic ERP Software
It can be tempting to pick generic software for your manufacturing business. Generic solutions support deployment in many sectors other than manufacturing. They come with all the essential features but are not specifically designed for manufacturing companies. But generic options lack the valuable functionalities that dedicated manufacturing ERPs offer. Are you currently using a general system that fails to meet your business demands? Then it's time to upgrade to a specific ERP software.
02. Broad Manufacturing ERP Solutions
These are manufacturing ERPs you can deploy in multiple sub-sectors. They offer better value than generic software since they have functions that meet the manufacturer's unique requirements. Most come with tools that help manage shop floor process changes and maintenance scheduling.
If you opt for a comprehensive ERP solution, you may need to add extra customization or software modules to achieve desired results. This can complicate the ERP software's implementation and running and negatively affect the return on investment.
Your enterprise needs an ERP manufacturing system tailored to your specific sector to get the maximum investment value.
03. Industry-Specific Manufacturing ERPS
Industry-specific ERP solutions are the best manufacturing ERP systems. They offer specific functionalities needed to run your manufacturing processes efficiently.
Here are to most common industry-specific ERPs:
Discrete manufacturing ERPs: Discrete software allows manufacturers to transform quotes into a bill of materials, streamlining the sales process.
Process manufacturing ERPs: These solutions feature formula management tools that control batch manufacturing. They also offer lot traceability and control.
Food ERP solutions: Such software includes quality assurance capabilities and compliance functions.
Industry-specific ERPs eliminate the need for future customizations and additions.
How Implementing ERP Solutions Enhances Manufacturing Efficiency
Digital transformation makes manufacturing processes more profitable. While ERPs provide a wide range of benefits to manufacturing companies, here are the specific ways they can maximize your organization's efficiency and productivity.
01. Effective Production Scheduling
Proper production scheduling ensures that all incoming raw materials get utilized promptly. It eliminates the chance of excess inventory affecting productivity. Manufacturers can leverage ERP platforms to plan the entire production process.
ERPs can streamline the management of procurement, pricing, and routine maintenance. They ensure that all resources are ready for maximum production.
02. Real-Time Visibility of Data
ERP project governance involves prompt decision-making as the backbone of efficiency. When the executives have quick access to the data they require, they can use it to make the right decisions.
Most ERPs offer all users easy access to accurate data so departmental heads can stay on top of issues like traceability and compliance.
03. Optimized Inventory Management
Inventory management tools in ERPs facilitate the maintenance of a balanced warehouse. Manufacturing ERPs deliver real-time visibility into all work orders, allowing you to use the data to manage inventory needs.
04. Supply Chain Management
Managing supply chain operations across different regions, time zones, and currencies may be difficult for multinational firms. Handling these details by hand may cause logistical chaos with the possibility of human errors.
05. Workflow Standardization
Workflows become standardized and uniform when everyone uses the same ERP platform to conduct their duties. This reduces the amount of overlap and rework and allows team members to cooperate more efficiently.
06. Prime Customer Service
Many ERP websites feature client areas where customers may log in and enquire about facts like product availability and pricing. They can then utilize that information to place an order quickly. Manufacturers can use the information gleaned from these inquiries to create more precise production schedules that simplify delivery.
Steps for ERP Implementation in the Manufacturing Industry
Because of the immense diversity of implementation strategies utilized in the industry, there is no perfect ERP deployment methodology that manufacturing companies can follow.
The primary motivation for these techniques is to provide planned implementation activities in the form of a roadmap, but the main advantage is risk reduction. Scope creep, a lack of data integrity, poor training, and insufficient testing are all implementation risk concerns.
Below are the primary steps for manufacturing ERP implementation.
01. Project Initiation
This involves setting up the project by:
Choosing an implementation team.
Identifying the steering committee.
Setting up project management tools.
Developing reporting process.
Project initiation kicks off the undertaking.
02. Data Conversion and Basic Training
This stage often entails providing the manufacturing company's employees with a basic understanding of the ERP system. When the consultants come, the focus may be on process development rather than the program itself.
Companies establish where data is located and how to access it, plus a strategy for cleansing, formatting, and transferring it to the new system.
03. Process Development and ERP Testing
During this crucial step, the implementation teams create processes in the software that match the company's future requirements. After development, the processes go through testing to ascertain their validity.
04. End-User Training and Piloting
Once the teams complete testing, implementation partners train end-users on the new processes. The test pilot program helps validate the system setup and its effectiveness.
05. Cutover and Going Live
Finally, implementation teams consolidate data from the legacy system to the new ERP then the manufacturing ERP can go live.
Companies initiate digital transformation processes to achieve the desired result, and with change comes risks and uncertainty. This enhances the need for risk management during project implementation. With proper planning and expert guidance, your ERP project will be a success.
Make Your ERP Vision a Reality
Implementing ERP in the manufacturing industry is difficult, but when done right, it can provide significant benefits and efficiency to businesses.
Call us at (856) 952-2632 or email us through JohnHannan@ERPgo-live.com for help with your ERP implementation project.