What is an ERP Application?
ERP Application is a software utility used by manufacturers to automate various business processes, plan, and schedule production activities, use their resources efficiently, control costs, and improve relations with the customers.
ERP Software allows modern manufacturers to operate their business operations from a single software, bring consistency in the way the organizational data is stored, get up-to-date information about the performance of different departments, and benefit from charts and intuitive reports.
How ERP Application Benefits Modern Manufacturers
Improved Cost Management
In today’s fast-paced world, businesses need to become efficient and tackle cost management issues in a much better way. The Bill of Materials module lists the components or ingredients required to assemble a product and enables manufacturers to classify them into different categories. For example, a company engaged in the manufacturing of furniture can have different sets of materials such as hinges, screws, slides, different types of fittings, and so on. They can track ingredient costs, and accurately forecast production costs.
Higher Product Quality
ERP enables manufacturers to perform a series of tests and inspections at various stages of the manufacturing process. For example, the Quality Check module checks whether the formula ingredients are strictly followed and whether the quality of the raw materials procured matches the industry standards. With inspections, visual checks, quality checks, quantitative checks, and the use of Internet of Things (IoT) based devices, manufacturers can stay ahead of their competitors regarding product quality and comply with various international standards.
Meet Customer Expectations
Manufacturing ERP software comes with a Bill of Materials (BOM) module that covers the entire lifecycle of a product starting from the product design, engineering, sales, delivery, and after-sales. For example: When a customer receives a defective product and opts for a return or replacement, the BOM provides feedback to the product engineering team. Decision-makers can access this critical data straight on their mobile phones, inspect the design and engineering of the product, and make appropriate BOM Modifications to evolve with the consumer feedback and expectations. This helps your business become agile and meet modern customer expectations.
Reduced Accounting Errors
Financial reports are complex in nature and human errors are inevitable. Adopting an ERP allows your business to automate various manual tasks. Such automation benefits your business in several ways. It improves the speed of operation, lowers the chances of human errors, and makes your financial reports audit-friendly. Not just that, your organization will also benefit from powerful tools that help you reduce costs, and forecast sales, and demands.
Strengthens Supply Chain
Other benefits of ERP include their ability to track the real-time movement of goods and optimize the delivery of finished goods. ERP brings efficiency to the supply chain process and helps manufacturers track down and minimize delays in this critical business process. They can effectively manage relations with various stakeholders such as suppliers, retailers, and customers. Furthermore, it helps them minimize transportation expenses, measure the performance and efficiency of the distribution system, and bring coordination between different transportation channels.
Stages in the ERP Application Deployment Process
Set Clear Objectives
First things first, you will need to perform a thorough analysis of your business. This involves identifying the business needs, requirements, and areas that need improvement. Moreover, you will need to identify which objectives need to be met in the short and long term. Accordingly, you will need to write down your organizational objectives and make the best use of the ERP to achieve them in the pre-decided period.
ERP requires a large investment which is why allocating a separate budget is a must. Different factors determine how much budget you need to keep aside for your ERP. These factors may differ for each organization. However, the most common factors include the size and industry type of the business, the number of users who will use the ERP, and the modules required. Furthermore, the company may also have to allocate some part of the budget to an external agency with a high-level understanding of ERP for a smooth deployment process with minimal business disruptions.
The third step is to research the product offerings by different ERP vendors, and shortlist them based on their product offerings, experience in terms of years in the business, reviews, and most importantly, budget. Much like online reviews, reviews from other industry leaders are also essential to evaluate whether the ERP meets your project requirements. Similarly, it is also important to check whether your ERP is compatible with your existing systems and whether it can be customized to meet your specific business needs.
Migrate Business Data
In this stage, the data is migrated from the legacy systems to the newly adopted ERP. However, before migrating the business data, it is important to first back it up. Backing up your data allows you to restore it, in the event the new ERP cannot be successfully installed. Without backup, your business activities may get disrupted and your business may suffer financial losses. After backing up your data, the second process is to verify its accuracy, reliability, and completeness. Using inaccurate, unreliable, and incomplete data can do more harm than good.
The final stage is to test and validate the new system. Bug testing is an important, yet often neglected step. It helps faster identification of bugs and glitches before they cause disruptions, or affect your employee’s productivity and efficiency. Eventually, your organization will benefit from a stable, fast, and efficient system. Bug testing involves various methodologies such as testing the functioning, user-friendliness, and security vulnerabilities of the new system. Companies can also test their system in high-demand situations and measure performance using the Key Performance Indexes (KPIs).
In today’s highly competitive world, businesses operate in multiple jurisdictions and highly complex environments. As such, they need constant access to data across different departments, branches, and subsidiaries to stay competitive. An ERP Application provides all the features required for businesses to operate efficiently and grow their business.
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● Author Bio:- Sneha Rakte is a specialist in communication who excels at recognizing client requirements. She produces persuasive sales copy and high-converting content. She currently works with Sage Software Solutions, an industry leader in supplying small and medium-sized enterprises in India with high-quality ERP software and CRM solutions.