Manufacturing is one of the highly dynamic and competitive industries. Complex processes, together with a high level of competition, requires manufacturers to race to meet the increasingly and rapidly changing consumer demands. To meet these objectives, they must be able to accelerate all the processes, automate their production to leverage productivity gains and turn their business more efficient.

Whilst several actions can be taken by manufacturers to optimize their workflows, the most efficient is to use an ERP software, integrated with their accounting package. The system is basically designed to simplify the entire operations, improve efficiency and reduce costs.

What are the main benefits of ERP software for the manufacturing industry, you might ask? Let’s find out.

Integrate your supply chain

For any manufacturing business, managing the inflow and outflow of materials in an efficient manner is vital, whether their production is batch or discrete.

Supply chain integration is about creating cohesion and increasing connectivity throughout the entire value chain, from procurement to production planning to logistics. Instead of allowing each individual function exist in its own silo, supply chain integration brings these disparate functions together with the goal to promote collaboration and increase connectivity. This is where IT solutions help centralize cross-operational data, delivering, in turn, a significant increase in cross-functional visibility. Indeed, a fully integrated environment means the left hand always knows what the right is doing, and can adjust accordingly. Not only do teams avoid working at cross-purposes, they gain new insights into their position within the entire supply chain and freed up to focus on higher-value work.

Optimize production scheduling

To make sure materials coming into the company are used when ordered and excess stock does not pile up, those materials must be planned into production. Integrated and automated ERP software not only helps manage the procurement, pricing and payment of raw materials, it also allows optimum scheduling of staff, as well as machine operation and maintenance to maximize production schedules and minimize downtime.

A manufacturing ERP implementation also can help you utilize a just-in sequencing process, where materials are ordered and utilized in a production schedule as they arrive. If your system has serial genealogy functionality, you can trace the location and constituent components of completed goods to build complex products at scale.

A shop floor data collection (SFDC) system enables staff to effectively plan production, picking and schedules. Barcode scanners allow employees to scan into jobs, follow processes and, thanks to live BOMs, order profitability and traceability is accounted for on a job-by-job basis. Such quick and accurate insight is invaluable to fully optimize the production, giving management and sales a 360 degrees view of the business’ operations. Further tweaks, like implementing a color coding in the system, enables teams to see at a glance which jobs are currently active and which are becoming less profitable.

Without automation of these processes, the manual intervention and ensuing paperwork would simply be unmanageable. Time to kiss goodbye to flying worksheets and say “Hi” to a paperless production floor.

Customer driven production

Sales and production work hands in hands, the first driving the later. For most businesses, the majority of revenues come from a small slice of their customer base. It is, therefore, critical for manufacturers to stay connected with key customers, understand sales trends, and maintain an accurate history of customer interactions. A CRM solution (customer relationship management) fully integrated with an ERP system like Sage200 can do that, and much more,  without the business having to invest in a stand-alone CRM software.

Pairing ERP with CRM functionality also empowers sales staff to more easily track and continue conversations with leads and customers in a way that allows easier hand-off to others. Quotes, order status, and shipment tracking information are all maintained in a single location, along with email exchanges, contract details, and problems/resolutions. Customizable permissions and dashboards ensure different types of staff have the access they require, and fine-tuned reporting allows upper management to remain aware of any customer satisfaction issues. When combined with the ERP’s sales management functionality, the data available to c-level management is informative and complete.

Learn from the past, plan for the future

ERP software traditionally have built-in reporting and forecasting capabilities, which come handy for various reasons:

  • To understand the factors that are actually responsible for sales variations (seasonality, trends etc.)
  • To determine optimal inventory levels (it eliminates the situation of excel inventory or stock out)
  • To boost sales and encourage better customer relationship
  • To ensure enough stock in hand to meet customers’ demand

In manufacturing companies, planners usually face a crisis-like situation when their business experiences an unexpected demand for a particular product. It is the same scenario when in a slack season, the warehouse packs up with unsold excess stock.

To avoid such challenging situations, at least minimize their impact, businesses largely benefit from using an enterprise resource planning software system, which does not disturb the logistics and the entire supply chain process.

ERP not only brings balance and structure to the production, sales, procurement and inventory plans, it also helps you generate forecast and sales reports based on historical transactions. This avoids the clutter by minimizing out-of-stock or excess inventory situation.

Besides, the intelligent report capabilities ensure that the company responds easily to its complex data. Users can also run their own reports without relying on the IT personnel, whilst making planners’ life easier and less tedious.

ERP puts an end to manually fetching of data and spending hours to create reports. Users can predict future demand and design material requirement plans appropriately. Powerful BI tools make reporting simpler so that management can get a bird’s eye view of the entire organization

Keep customers in the loop

Customer service is an essential focus for all organizations, not just for manufacturing businesses. Indeed, sales teams need to be able to provide fast answers to customers in relation to their orders, shipping and non conformance. With real time production monitoring, ERPs will put this information at your fingertips so that your staff can deliver a pro-active, effective and efficient customer service level.

You should not to stop there though. Indeed, integrating a connected customer portal to your website will give your clients a dedicated and personal area where they will be able to access all their order related information, without any intervention from your sales teams.  This is a must have functionality that allows your customer to place orders themselves, check stock availability and track deliveries. Available 24/7, it means sales can concentrate on selling, whilst customers are on auto pilot. A true bi-directional growth accelerator.

Improved job costing

 Whether your business produces standard goods or bespoke products, the BOM (bill of material) is a core element of every manufacturing operation. Today’s manufacturing environment is more complex than ever. And with that complexity comes BOMs with longer chains that require accurate costing. By integrating accounting into an ERP system, data on BOMs can be analyzed to cost the factory and its products accurately. Understandably, this is impactful in volume environments where a fraction of cost can mean the loss, or gain, of millions of pounds, but also in small quantities discrete manufacturing companies where single unit or short lot production of specialized, premium value units can result in loss or gain as well if costs are correctly weighted. The integration of accounting and ERP gives businesses a clear shot at accurately costing the operation.

One of our valued customers contacted us regarding delays they experienced in sending designs for custom products to the shop floor when creating individual BOM’s within Sage. In order to improve accuracy in profitability, they also wanted to be able to edit BOM’s on a job-by job-basis based on actual usage to account for wastage and human error. Following a consultation, our development team added a functionality that enabled our customer to edit and create BOMs on the fly through barcode scanning and then imported directly back into their Sage 200 ERP system.

Conclusion

ERP solutions can do a lot to automate manufacturing businesses and streamline production related processes. However, because each manufacturer has specific workflows, it is very often needed to complement “out of the box” ERPs with tailor made add-ons to ensure a perfect fit.

Xapsys has helped several UK based small and medium manufacturing companies optimize the way they work and transform their production, making it more efficient and more profitable. A Sage developer, we deliver and implement CRM, Manufacturing Software Solutions, Business Intelligence and more for companies using Sage50Cloud and Sage200, that will save your business money with no expensive hidden costs and set up charges.

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