Why invest in a modern ERP system? Advantages for the Manufacturing Industry
Modern ERP systems are revolutionizing companies in an array of fields, but it’s in the manufacturing industry that there are great advantages to take note of. Production companies are, in fact, adopting technologies that manage business processes in real-time and integrating these processes with the aim of increasing efficiency and competitiveness.
So, what are the characteristics of a modern Enterprise Resource Planning (ERP) management software and what are the true differences from a traditional one?
What is a modern ERP system?
Advanced ERP systems are designed to improve operational activities, efficiency and productivity of a company. This helps facilitate the management of daily activities such as procurement, production and sales operations.
Modern ERP systems are also set up to support different modules and cover all the areas that can be automated and monitored in a company: finance, procurement, Supply Chain, Human Resource Management, etc. The new generation of systems use Artificial Intelligence algorithms in the processes, adapting to specific business needs and playing a key role in Cloud-based companies.
The evolution of ERP software has seen a significant acceleration with the advent of Cloud Computing, enabling some of the most advanced management advances: real-time data analysis, self-service assistance for employees, Blockchain, and secure data exchange.
On the other hand, traditional ERP systems are no longer able to meet the needs of modern companies. They don’t ensure the pervasiveness of the solution within the organization, nor the speed, flexibility and scalability essential in today’s competitive environment.
The Manufacturing Choice: Modern or Traditional ERP?
The reason companies don’t often move into Modern ERP systems is because they don’t think the Cloud is safe and that it’s more expensive. Manufacturing companies that face this challenge and make the jump, however, experience first-hand the increase in productivity and an improvement in processes. These are significantly higher savings than the cost of the system.
Here are some of the advantages of a Modern ERP system for Manufacturing companies.
Improvement of Key Performance Indicators (KPI)
Some of the KPIs in the manufacturing sector show a clear improvement, thanks to Modern ERP software:
- Supply Chain with the reduction of cost and time in the production cycle to the cycle of the finished product and shipment. A Modern ERP has the ability to understand which processes take too long and what measures to take to become more efficient.
- Inventory Cycle in the warehouse that optimizes the space, storage efficiency and a reduction in deviation rate.
- Any type of Cost that relates to the activity and ingredient that make up the finished product, especially in the area of process production. The integration of ERP with Business Intelligence modules (BI) also allows the company to track cost trends and identify future trends.
Downtime with a significant reduction, thanks to the security checks that are inherent in an ERP system. A common example is the production downtime due to equipment failure. Enterprise Asset Management solutions allow you to better manage plant maintenance and plan preventive maintenance interventions.
- Order Management with a monitoring system for average value, return percentage, guarantee activity, and refund rate. All of these metrics are necessary to help companies plan and thus increase customer satisfaction.
Informed Decisions that are Data Driven
Thanks to Modern ERP, companies are able to disseminate among employees a culture of correct and solid data. This gives everyone a strategic tool that helps guide big business decisions and innovative processes. By also aligning corporate KPIs with the objectives of individual departments, employees have a clearer view of the relationship between processes and performance.
Increase collaboration between departments and employees
Modern Management Systems provide communication and sharing that enhance the collaboration between different areas in the company. The result is a greater improvement in workflows and an increase in productivity.
Use of Innovative Technologies, Artificial Intelligence and IoT
Artificial Intelligence is an undisputed opportunity for manufacturing companies to reduce operating costs and increase productivity. Product Quality Control, Demand Planning and Predictive Maintenance are the areas in which AI generates the best return on investment. Having the capability to monitor the condition of the machinery in real-time through the use of intelligent sensors, allows the company to plan maintenance before any failure occurs. It’s also evident that a Modern ERP system is the only solution capable of supporting companies in the manufacturing sector that must take into account new business models and products, international expansion and diversification of legislation.
Atlantic Technologies is a partner of Oracle and Infor, both highly recognized cloud solution providers that support manufacturing companies and guarantee the flexibility and competitiveness for business growth.