Maximizing the Return on Your Product Development Dollars with ERP

electronics-manufacturing In the electronics industry the customer only buys a product once. Then, when it's time to replace the product the customer expects to get something better, and probably to pay less for it. This results in two huges advantages for the company that launches first:

Higher margins. Customers will pay a premium for something novel, especially if it solves a problem that has yet to be solved.

Biggest potential market. Once customers start buying, the latecomers are fighting for a piece of a shrinking pie.

Some companies believe the way to be first is to work longer hours, throw more resources at the task, or cut corners in testing and quality. Leading manufacturers know that working smarter always trumps working harder and choose to equip themselves with tools that let them use finite resources in a more effective way.

ERP in Product Development

One of the most important of these tools, and one that's often overlooked as a source of advantage in product innovation, is an effective ERP system. Many manufacturers think of ERP in terms of order processing, inventory control, production scheduling and invoicing, and it's true that those functions are at the heart of most systems, but the right system does much more.

A ERP system that incorporates features that reach back into the product development process can help your company reduce waste and increase your engineering productivity. More specifically, it can help you manage product revision and engineering change order (ECO) processes, create necessary documentation and ensuring the accuracy of all data in your system.

Benefits of ERP

Innovative new products are the lifeblood of manufacturers in the electronics and high tech industries, but development is expensive and resources are finite. ERP gives engineers tools that help maximize the return on that investment by reducing wasted effort and speeding new products to market.

Among the most significant benefits are:

Product portfolio shaping. Highly granular information on the profitability of each product line enables better decision-making.
Better design and component reuse. When an engineer can't easily locate an existing part to reuse in a new design he'll often start from scratch. This adds part numbers to the system, increases overall complexity, (especially in terms of service support,) and prolongs the development process. A well-designed and implemented ERP system prevents this through accurate, searchable BOM data that gets updated automatically.
A fast and accurate ECO process. No product ever goes straight from first design to market. As testing identifies weak points changes are introduced and designs updated. ERP can ensure this is done quickly and in a controlled manner, so preventing errors and confusion.
Support for sourcing. An accurate BOM helps Purchasing procure the parts and materials needed for the new design. Plus, costing information supports engineering decision-making.
Less phase-out waste. Because inventory levels, including those of components, are known, production can be scheduled to coordinate the run-out of old products while ramping-up the new.

A Competitive Tool

New products are the source of future profits, especially when brought to market quickly, but engineering resources are finite and effort must be prioritized. The right ERP system helps by reducing duplication of effort, providing accurate, timely data, and allowing changes to be put through quickly with minimum disruption. ERP can be a source of competitive advantage in product development.