ERP systems are much more than repositories for inventory transactions and costs. Used properly, the right ERP system for your company can help you adopt proven, industry-standard best practices, ensure that your business processes are efficient, catch manufacturing issues before they result in costly scrap or inefficient rework, and improve the overall predictability of your manufacturing throughput. All in all, not a bad day’s work. But at the end of the day, what's the impact on your customers?

Increases inventory accuracy

By ensuring that your team processes transactions and providing alerts for anomalies such as shortages and negative on-hand balances, your ERP system helps to improve inventory accuracy. This increased accuracy will make your production operations more efficient, increase throughput because of reduced down time, and improve the balance sheet. The greatest reason for improving inventory accuracy is that it enables you to produce and ship product as planned, without unexpected delays due to missing material.

Balance demand and supply

MRP works to minimize the amount of unnecessary inventory that you store. In fact, if you don’t add allowances for safety stock, safety lead-time, lot size algorithms or demand fluctuations, the MRP calculation will exactly balance demand and supply. Since the real world doesn’t work like an MRP model, it makes sense to add these factors that help ensure that you have adequate materials to cover unexpected fluctuations—and the MRP module of your ERP system will still balance supply and demand within the parameters you set. This helps ensure that you meet deliveries on time and in full without stocking excess inventory that raises costs.

Early warning

Even the best run supply chains suffer from occasional glitches—or customers change their plans. When a situation arises that may cause a late delivery, your ERP system informs you with alerts so that you can take action to alleviate the problem, or at least warn the customer of a delivery delay before you cause their plant to shut down for lack of your product.

In addition, ERP systems can pick up on quality issues before they get out of hand, ensuring that you don’t waste time and money creating poor quality parts or inadvertently sending them to customers.

Align priorities

Most manufacturing facilities are complex ecosystems with material and equipment dependencies, target metrics and frequently shifting priorities. Your ERP system helps align every part of your operation to reflect current priorities, so that you maximize throughput and on time delivery. This helps to ensure that you satisfy key customers by delivering their materials when they need it.

Reliable, consistent, predictable deliveries

Your ERP system tracks where items are in WIP and provides information on when the goods should be ready for shipment. This enables you to provide your customer with reliable delivery information so that they can plan more effectively. The better the information in your ERP system the more reliable and consistent the delivery calculations will be.

Improve efficiency to keep costs low

ERP systems help ensure that you only release work to the floor as needed, and with all required materials. As a result, queues in front of equipment are lower and machines and work centers rarely experience delays due to late or missing parts. Quality issues come to light quickly. The resulting efficiency helps keep costs low while maximizing throughput so that customers receive high-quality products on time at a reasonable cost.

Ensure quality through adherence to defined manufacturing processes

ERP systems allow your engineering team to define routings and processes that may specify set up parameters, test procedures and the most efficient equipment. By adhering to procedures, your output will typically conform to quality standards, improving the predictability of your manufacturing operation.

Provide access to information

The customer’s world isn’t always predictable, and sometimes they will need to expedite or follow up on an order. A good ERP system makes it easy to provide accurate status information so the customer is satisfied.

Support rapid, fact-based decisions

In most manufacturing facilities, events happen quickly and your team often has to make split second decisions. When your ERP system provides rapid access to accurate information, you team can base their decisions on facts, not guesswork. This helps optimize production efficiency and control costs while satisfying your customers. Supporting fact-based decisions quickly is one of the most important things your ERP system can do to ensure happy customers because it will help optimize your entire plant.

Reduces backorders

When you have accurate inventory records, predictable throughput and balanced supply and demand, most orders will ship on time and in full. Nothing makes a customer happier than perfect orders, and your ERP system is the indispensable tool to achieve that goal.