ERP system for manufacturers - What is it? What should I look for?
An ERP for manufacturers is defined as an enterprise resource planning management system that is focused on optimizing systems unique to manufactruring. Whether you have 50 or 500 employees, whether you operate in the metals industry or in mechanical engineering, in custom production or in mass production, whether you’re doing business in Milwaukee or Malaysia, an ERP for manufacturers has become indispensable to mid-market businesses.
Your manufacturing company doesn’t just want to “remain competitive,” you want to develop and maintain a sustainable and clear competitive advantage over others in your market, to surpass your rivals not just in the products you make but in how you make them and how efficiently and profitably you run your operations. It takes a lot to build that competitive advantage: you need to excel at supply chain management/logistics, costing, cost management, data transparency, production optimization, the adoption of new technologies, and much more. Ensuring competitive advantage is a dynamic process requiring you to develop “agility.”
Agility means that you can change the way you work depending on how technologies and customer expectations evolve into the future. And evolve they surely will. Getting your systems to work together, offering you real-time visibility into your data and enabling you to leverage your data in order to inform better, real-time decision-making is what abas USA is all about. Because we know these capabilities are the key drivers of your manufacturing company’s competitive advantage today and tomorrow. We don’t offer “ERP for everyone,” but offer the best ERP for manufacturers in the middle market. We know you and your challenges, and (most important) know how to help you work smarter.
ERP Systems Enable Manufacturers to Work Smarter
Having a solid ERP system for your manufacturing company enables you to optimize all you do today (improving your processes and decision-making), using your data to gain visibility into (and thereby fuel) your entire operations. An ERP system for manufacturing also “future-proofs” your business for tomorrow. From a big picture perspective, ERP for manufacturers connects the various functional departments of your manufacturing company, enabling coordination and data sharing across your business while giving you full visibility into your processes and operations.
For manufacturing companies, ERP systems control all essential business processes and material flows, collect data, and deliver evaluations for strategic decisions—from purchasing, warehousing, and production to marketing and sales, customer support, controlling, and more. With an ERP system, you have visibility and control from the plant to the warehouse, to sales and distribution. You can use this visibility to continually, dynamically optimize your business processes, driving ongoing efficiency in everything you do, every decision you make.
One Small Example of ERP for Manufacturers
Let’s look at an example of the many benefits an ERP system can offer a custom manufacturer, who’s in one of the toughest (yet booming) businesses in the world. The systems integration enabled by an ERP system for manufacturers will allow a custom manufacturer to seamlessly input the customer’s product design from a CAD file and then automatically start the process of planning and producing the custom order. With such CAD integration, the custom manufacturing can accurately schedule and cost out the customer’s order, so you can give the customer a quick, accurate quote and an accurate order delivery estimate. Meanwhile, the manufacturer can estimate the project’s profitability. From there, the custom manufacturer’s systems can automatically order parts and materials for the production run.
Once the production begins, an ERP system enables the manufacturer to track actual costs versus estimated costs throughout the entire project. Again, an ERP system for manufacturers coordinates all data sharing and updating across your organization in real-time. You have visibility into what’s happening, operationally and financially, and can change course quickly (say, if the customer wants a change) and still assess your operational capacities and profitability. That’s what agility looks like, and an ERP for manufacturers enables it.
Taking advantage of CAD integration, as provided by an ERP system for manufacturing, you won’t need to do all these complicated steps manually. Production coordination happens automatically, so there is no need to both manually input and manually adjust customer specs while keeping track of all the downstream consequences of these adjustments, especially as they impact cost and profitability.
Make complicated orders and last-minute changes a simpler process and avoid the inevitable mistakes triggered by manual inputs. Easily accommodate demands that your competition will say no to and welcome those tricky order/spec adjustments. Never again risk losing a customer because you’re not agile enough to make changes and coordinate your operations.
Future-Proofing Your Manufacturing Business
As every manufacturer knows, change happens fast, largely driven by technological innovations. Some of the evolving technologies that are now transforming manufacturing include the Industrial Internet of Things (IIoT), Additive Manufacturing or 3D Printing, Artificial Intelligence/machine learning, Advanced Robotics, and much more.
Upgrading manufacturing systems has never been as important as it is today. How can you keep pace and integrate all these emerging technologies into how you do business? You need an answer, because your competitors will be adopting these emerging technologies to grow their businesses, and your customers will expect you to be using the latest technologies.
Let’s look at Additive Manufacturing (or 3D Printing) as an example. It’s becoming increasingly possible for manufacturers of all kinds to print parts in various materials, from plastic to multiple metals, with the 3D printers that are becoming available. The manufacturer simply inputs the product design and the production begins via the printer. Custom manufacturers can use 3D printing for the development and prototyping process, where the speed of additive manufacturing can improve efficiency and control costs.
As additive manufacturing evolves, companies will be able to print/produce more complex parts at much larger scale. You’d better be ready to keep up with this emerging technology. Yet purchasing these new 3D printers and the materials they use can be an expensive investment for any manufacturer. Having an ERP system for manufacturing in place makes it easy for you to integrate emerging technologies into your entire business. An ERP system for manufacturers offers you a convenient platform to build upon, letting you add new technologies as they emerge.
Speaking of enabling integration, the rise of cloud computing gives manufacturers significant advantages over a traditional, on-premise ERP. Unlike on-premise solutions, cloud-based systems reduce risks through outsourced management of IT functions. In addition, such systems, explains Medium, empower businesses with additional benefits, including:
- Broad scalability. Since cloud-based systems reside off-premise, developers design them with an eye on continued growth. Ongoing scalability allows for agility to handle growth and fluctuations in demand.
- Ability to integrate with other, newer systems. As new technologies become available, they require integration with existing systems of record and management, including the ERP. Cloud-based ERP solutions leverage open-source architecture that connects with existing systems via an API or EDI to enable seamless, optimized implementation.
- Improved data security. Developers know their systems are only as good as the level of cybersecurity. In traditional systems, data security may occur due to subpar risk management. Meanwhile, the developer or vendor carries the burden of maintaining cybersecurity, performing updates automatically and maximizing integrity.
- Support for managing implementation and training. Cloud-based solutions’ providers handle the training and technical support for your systems. As a result, your internal IT demand decreases, freeing staff and resources to manage other critical functions.
- Customization of functions and web-based access. Cloud solutions allow for the customization of workflows, a critical concern for manufacturers with changing product requirements. Moreover, cloud-based systems rely on the internet, so anyone with a secure, authorized data connection could access the platform from anywhere on the globe. At the same time, this opens the door to mobile system use. As the world moves toward remote management, such benefits have a natural implication for boosting revenue and allowing managers to oversee larger company portfolios without physically visiting individual locations.
The best-laid plans for process improvement must enable flexibility and empower companies with data. One final thought remains; cloud-based systems can also connect managers with vast analytics and performance management metrics. Thus, they enable true continuous improvement and agility to future-proof your business.
Considering a new ERP system? Download the Guide: Selecting an ERP System for Manufacturers in 7 Easy Steps
So, when you ask, “how can my manufacturing company keep pace with new technologies as they arrive?” The answer is in having an ERP system for manufacturers that’s also a platform for today and tomorrow’s technologies. When you have the solid foundation that an ERP for manufacturers provides, you can keep pace with whatever manufacturing technologies come next, in a fast and seamless way. You can’t afford to fall behind in technology, and your customers will punish you by taking their business elsewhere if they discover that you can’t keep pace. At abas USA, we pride ourselves in helping our customers optimize for today and “future-proof” for tomorrow.