Manufacturing companies know that ERP is essential to running their business effectively, but they sometimes forget that ERP does more than just log transactions and plan orders. Used correctly, your ERP system can drive innovation and help your company to become more competitive. Here’s how.
1. Business Process Improvement
Manufacturing companies have often grown from humble beginnings to their current size, and even though the company may still be mid-size or smaller, the business probably has many processes in place that no longer make sense.
Modern ERP systems use industry-proven best practice business processes to help companies become more efficient. Adopting the built-in business processes makes sense, and you'll find that your team becomes more efficient. With the extra time freed up by the new found efficiency, your team can focus on the two or three key business processes that matter to your customers and differentiate you from your competition. Set your team’s brainpower free to focus on increasing customer service, cutting time from your order cycle or eliminating shipping errors.
2. Component Commonality
One of the chief benefits of an ERP system is that it functions as a repository for all your company’s information, including all the parts, components and raw materials you use in your products. With all your existing components in a single repository, engineers become inspired to find ways to use existing materials in new ways rather than spec a variation. The result of this inspiration is lower inventory and less obsolescence.
3. Shop Floor Efficiency
Over time, errors and process variations creep into production processes that cost you time and money. Process or material documentation may be wrong or may reflect obsolete shop layouts, retired tooling or a variety of other potential problems. Working with the production team, you can uncover these anomalies by comparing the actual work done to the documented process. You may be surprised to discover that the people actually performing the work have come up with process innovations that save time and reduce errors, or you may find that the routing reflects unnecessary steps and therefore, costs. Products that you once considered low margin may turn out to be among your most profitable.
In addition, as your shop floor personnel and your production engineering team work together to ensure that your ERP system reflects the best process, the interaction will spark new ideas that result in more efficient operations or higher quality products.
4. Collaboration and Teamwork
The greatest feature that your ERP system brings to the table is its integration. People realize that other people rely on their information, and they start to work harder to make sure it’s correct. Processes that once seemed meaningless now have meaning because the team realizes that their coworkers depend on it to do their jobs. As a result, processes become more efficient and people in different departments start to work together more.
Many ERP systems include collaboration and communication tools such as workflow or shared workspaces that facilitate teamwork, so make sure you take advantage of them if they are part of your ERP system. If you’re looking for a new system, make sure that workflow is on your requirements list.
5. Product Enhancements
With the improved efficiency of your front and back office operations and your shop floor, your team will have more time to devote to considering ways to improve the overall performance of the business. One result of the increased communication between order entry, shop floor and engineering personnel will be new product ideas.
Whether it’s the customer service representative passing on an idea from a customer or the person on the floor inventing an idea to boost product performance, your team will become an innovation machine that drives your company to greater success.
