The use of Enterprise Resource Planning (ERP) has become a very common practice in the manufacturing industry. With Aberdeen Group’s “2014 Business Management and ERP Benchmark Survey” reporting that 97% of industry leaders are using ERP and 88% of followers, it’s undeniable that the industry recognizes the value of ERP software and what it can do for their companies. But there are still some that may not know how much more valuable ERP is when used to its full potential.
Unpredictable demand and complexity of data
Modern Manufacturing is constantly having to adjust the way they operate to keep up with demands. Effective demand planning requires a deep understanding of your company’s past and current performance through gathered business intelligence to properly forecast future demand, and, in turn, meet company goals. These companies look to their ERP software to help manage a huge amount of data, but they may not know the best way to utilize their findings.
With the continued problem of unpredictable demand, increasing volume and complexity of data, and the need for an advanced ERP system to increase functionality, some manufacturers are led to believe that if they replace their legacy manufacturing systems and increase their technology environment, it should make it easier to gather and interpret their data. Examples would be adding a fuller featured business software solution or just adding a shop floor control module to their current solution.
Don’t replace your ERP just yet
Yes, we are a software reseller/partner, but we like to think our approach is to help manufacturers. Realistically speaking, implementing a new business software solution is a lengthy process that will cost their organization time and money, with no guarantee of increasing its functionality. A simpler solution is to just expand their current ERP system. Not only does it increase the ERP’s functionality, it also gives you the power to personalize it to better suit your company’s needs, while simplifying the process of gathering business intelligence.
How can you expand ERP? There are three ways:
- Implementing more modules
- Take advantage of ERP add-on or ISV solutions (independent software vendor)
- Tightly integrate your applications with perhaps having your IT team or value added reseller/partner create integrations between systems.
Implementing more modules occurs when you create a new part of the ERP program that focuses on a specific business process, such as Project Accounting, Warehouse Management, or other manufacturing-specific functions. This allows manufacturers to use more of the functionality that is already included in your ERP package. Having more modules not only improves the ERP's overall value, it also simplifies the organization’s technology environment by keeping more information in one business software solution.
If your current ERP doesn’t give you the option to expand the software with modules, replacing it may be a better option than trying to get the functionality you need through heavy customization, having too many add-on products to manage, or even not getting it at all. Not having modules is a common trait in business software solutions, which leaves their customers trying to reconstruct the software. Fortunately, ERP consumers aren’t left completely out of options. Both Acumatica and Dynamics AX have all the modules businesses need to manage every aspect of their business operations.
It is imperative to equip your business software solution to handle what is most important to your company’s operation and its specific needs. One easy way to do this is to utilize its application extensions. An example of using an extension is to enhance ERP with a Customer Relationship Management (CRM) solution to manage access to business information, automate sales and marketing, as well as help track customer data, interaction, and support.
According to Aberdeen Group, the top 5 ERP extensions are, respectively:
- Customer Relationship Management (CRM)
- Warehouse Management System (WMS)
- Financial Planning and Budgeting
- Business Intelligence or analytical tools
- Enterprise data exchange (EDI) translator
In addition to utilizing more modules and extensions, integrated business solutions can also expand your ERP. Integrated business systems make it easier to examine the status of your entire organization and ensure that the collected data is accurate, comprehensive, and free of repeated entries. Integrated systems also allow for better decision making through business analytics, which helps businesses get more value out of the data in their ERP.
Reap the benefits
In today’s manufacturing environment, the best way to ensure your ERP is getting the maximum ROI is to utilize it across the entire organization. The capabilities gained through expanding your ERP results in increased visibility and communication with your data and overall improvement in data sharing and decision making.
As a matter of fact, Aberdeen’s research found that leaders saw a 12% decrease in operational costs as a result of expanding their ERP. That’s not the only benefit--there were also improvements in inventory turns, stock-to-sales ratios, administrative costs, complete and on-time deliveries, inventory levels, schedules compliance, and cycle times of key business processes.
Expanding your ERP gives your company the extra technology support to increase productivity, functionality, efficiency, and accuracy.
Need help expanding your company’s technology environment? Clients First's office in Texas implements and supports clients across the U.S.A. and in 11 countries. Our team of professionals is ready to help implement the best finance and operations solution for manufacturers, project-based manufacturers, MROs (maintenance, repair, and overhaul), and professional services. Please contact our sales team at 800.331.8382, or sales@clientsfirst-tx.com for more information on our offerings from Acumatica, Dynamics NAV, or Dynamics AX.
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