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How Industrial Manufacturers Integrate their Supply Chains with ERP

Industrial manufacturers rely on ERP software to streamline their end-to-end operations, cut costs and improve their product offerings.

As a sector that encompasses everything from automobiles and home appliances to aerospace and defense assets, industrial manufacturing faces some difficult challenges in today's market. Across the board, customers are upping their quality standards while forcing manufacturers to meet deadlines and low prices.

In light of these market conditions, industrial manufacturers must find ways to streamline their end-to-end operations, cut costs and improve their product offerings. To this end, an ERP platform is a powerful tool that can help manufacturers achieve all of the above and maintain profitability even in a volatile market.

Metrics-driven supply chain integration in industrial manufacturing

An industrial manufacturer's ability to integrate its supply chain and be more efficient than its competitors can be the difference between success and failure in this market. To stay ahead of the competition, industrial manufacturers invest considerable funding into research and development to create new products that better satisfy customer needs. Product innovation, in turn, breeds process innovation - more effective ways to make better products without losing sight of the goal of profitability.

The ERP platform is the fulcrum of a manufacturer's effort to improve efficiency, cut costs and boost margins because it centralizes all the critical data from the initial quote, to the bill of materials to the final shipment. ERP platforms help on both the financial and production sides of the operation:

  • Financial accounting and forward-looking cost control. With full access to project-related financial data, managers can track costs and compare them to projections to ensure the production run is on budget and margins are preserved. Additionally, built-in predictive analytics can help managers gauge where they will end up based on current expenses.
  • Vendors and manufacturers on the same page. In industrial manufacturing, everything is determined by forecasts. The manufacturer knows when it needs to start a certain production run, and the ERP system ensures its vendors are also aware that they are needed. Production can hit a snag if a vendor of a key component is behind because it didn't start producing the parts in time. The connectivity of the ERP system keeps everyone in the supply chain ready by providing them with the right information at the right time.

Beyond the abundance of data that can be used in various types of operational analyses, the ERP system also facilitates feedback loops that are essential for innovation and process improvement.

ERP and feedback loops in industrial manufacturing

Process and production innovation can't happen without a systematic way to capture feedback, whether it's from a customer or another stakeholder in the supply chain. A good ERP system will allow everyone involved in a project, from sales and marketing to the engineers and operators on the floor, to communicate with one another with the purpose of improving each aspect of the process.

For example, for many industrial manufacturers, the sales cycle is extremely long and high touch, even after the customer has made a purchase. This necessitates a well-built customer relationship management tool that the sales team can use to track each interaction with a customer. This is especially helpful if a large number of customers have similar concerns. These can be easily relayed to the appropriate managers in production, design or R&D and remedied before the problem grows out of control.

industrial manufacturing faces some difficult challenges in today's market

The rise of the Internet of Things - products with embedded Wi-Fi connectivity - is adding another layer of feedback loops that manufacturers can use to improve service. If a certain component of the product is approaching a suboptimal level of performance, the sensor can use the Wi-Fi signal to communicate directly with the manufacturer's ERP system. The manufacturer can schedule maintenance before the customer even knows his or her product needs it. Again, it's all about keeping the lines of communication between the entire supply chain open to make everyone aware of new developments or potential avenues for improvement.

The only way industrial manufacturers will be able to innovate and keep up with the increasing demands of their market is through open feedback loops and a powerful ERP system that gives them total visibility into the inner workings of the supply chain.

Selecting the right ERP system is easy once you know how! Download our free Whitepaper: Selecting an ERP System in 7 Steps. If you are interested in other companies in the industrial manufacturing industry, check out our References list to see who we have worked with. 

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