The Essential ERP Modules for Manufacturing Industry
Updated: Apr 2, 2020
The global ERP software market is expected to reap $47 billion in revenue from 2017 to 2022 at a CAGR of 7%.
While it finds applications in every industry, the manufacturing industry can especially benefit from it in more ways than one. Using a robust ERP solution, manufacturers can improve their productivity, reduce manual errors, increase overall visibility and transparency, and create better customer experiences. With streamlined business processes, powered by ERP, manufacturing companies can quickly respond to market conditions, reduce costs, and take data-driven decisions.
There are several options available on the market when it comes to ERP. It becomes a dilemma for manufacturers to know how to select the best one for their needs. The devil lies in the details and so, let’s dive straight in to understand which are the essential ERP modules for the manufacturing industry:
The factory floor is of prime importance in any manufacturing firm. With a production management module, manufacturing companies can have the upper hand in the factors that can positively affect the overall performance on the factory floor. The module provides more visibility and operational control, enhanced utilization of resources as well as inventories, minimum bottlenecks, better on-time delivery performance, and lower costs of manufacturing, irrespective of the type and style.
Manufacturing project management helps manufacturers optimally organize their components and accelerate the production processes. With strong project management, powered by the right tools and software solutions, manufacturers can increase team effectiveness and production accuracy while keeping deliveries on-time and on-budget. This ERP module helps in effectively automating various core business procedures. It assists in project planning and analysis, billing/expense management, and contract management. It promotes collaboration, speeds up time-to-market, assists in improving decision-making, and allows companies to act on client demands and expectations quickly, etc.
Supply Chain Management
Supply chain management and manufacturing go hand-in-hand. The module helps manufacturers manage all the processes and workflows between their clients and suppliers. Procurement, inventory, warehouse, shipping, and logistics are some of the aspects that are covered under this module. Moreover, with the help of this module, firms can seamlessly manage and monitor various processes in the supply chain early on. For instance, it allows stakeholders to keep track of orders received and the current inventory and then readjust them as necessary. This also helps in signing off purchases perfectly with no scope of human errors.
Planning and Scheduling
Planning and scheduling in manufacturing firms is a challenging process that involves company assets, raw materials, systems, supplies, and workstations. With the help of the planning and scheduling module of an ERP, companies can streamline all the resources and automate a lot of processes. It alerts the management about mission-critical processes before the deadline exceeds. Overall, this helps in making better business decisions. For instance, it helps in forecasting and understanding the material requirements, and scheduling the deliveries, which, in turn, helps in avoiding costly delays.
Service and Asset Management
Service and asset management is a method that can effectively organize the company assets, maximize the investments, and improve the overall efficiency. By enabling this via the service and asset management module in an ERP, a manufacturing firm can extend the lifecycle of the assets and services manifold. It can help them reduce the associated risks, improve the total cost of ownership, and increase the uptime and predictability. Firms can also use it to operate the plants efficiently by keeping various equipment and assets running at lower costs. This module addresses warranty issues, ensures that the critical machines and services are always available, and the procurement costs are limited without any unrequired expenses.
To effectively develop quality products, manufacturing firms need to derive maximum returns on their investment. This investment can range from the costs of inventory, equipment, and human resources. With the financial management module, manufacturing firms can use various financial ratios to ascertain how efficient they have been managing their finances and how they can attract potential investors. At the same time, it comes in handy to keep track of their credit, collections, accounts receivable, ledgers, taxes, rebates, and so on.
Customer Relationship Management
Like sales, customers also drive the manufacturing industry in a big way. Over the years, the dynamics of customer relationship management in the industry has changed, with firms becoming more customer-centric than ever. CRM module can assist manufacturers with accurate demand forecasting, enhance the product quality to meet the specifications of the customers, enhance the supply chain, and better the customer relationships. Most importantly, it unifies the core processes to manage the operations in customer handling and helps the team make informed decisions.
Due to various factors such as the lack of time, digital sales platforms, changing buyer behavior, etc., manufacturing firms have started facing newer challenges in sales management. Even volatile market conditions play truant. This is where the Sales Management module in an ERP is essential to the firms. Features of this module include easy management of estimates and quotes, real-time connection with customers, error-free management of orders, management of customer demands, and more. This leads to a structured process instead of leaving the firms to deal with a lot of guesswork.
Product management is a crucial factor in manufacturing industries. There are several aspects to it, which largely depend on the type of firm, the product as well as the different stages the product is in. The product management module in ERP offers business intelligence to managers to help them handle the lifecycle of products, costing, manage the bills, documents, revisions, and lots more. This leads to better bottom lines for the firm, thereby making a huge difference to the overall performance.
Human Capital Management
Human Capital Management or HCM has employees at its core and is tied closely to ERP. This module can help manufacturing companies regulate and automate several HR functionalities. Think of Candidate Self Service, Employee Self Service, Talent Management, Training and Development, Position Control, and Timesheets, and more. The module can tailor a highly enhanced experience for employees and employers, while speeding up several operations and reducing the HR costs.
It is All About Being Systematic
Choosing the right ERP software can contribute to the success of a manufacturing firm. It is all about knowing the modules in and out, and successfully implementing them, and overcoming potential challenges. Most importantly, it is important to choose a vendor who can help you make informed decisions.