How an ERP system can help your business thrive as manufacturing makes a comeback

News that the Australian government would provide approximately $1.5 billion over five years to support the Modern Manufacturing Strategy (MMS) was welcomed by the sector, with the Prime Minister pledging to build scale and capture income in high-value areas of manufacturing, "where Australia either has established competitive strength or emerging priorities".

Focusing on six national manufacturing priority areas, the MMS will target critical minerals processing, food and beverages, medical products, recycling and clean energy, defence and space.

Here we explore some of the ways an enterprise resource planning (ERP) system can transform warehouse operations, such as reducing manual workflows, keeping up with customer demand and improving performance - putting manufacturing businesses in the strongest possible position to capitalise on this promised investment.

What is an ERP system?

Broadly speaking, the term ‘ERP’ refers to a system that automates and integrates a company’s core business elements to increase efficiency and simplify operations. It’s a comprehensive system that includes all the software pieces you might need to run your manufacturing operation as efficiently as possible.

When deployed effectively an ERP system can alleviate many of the processes previously draining resources or hindering profitability. Whether this is your first ERP system or you’re simply switching providers, the change will impact all areas of your business, from sales to finance to service, so be sure to do your research and thoroughly plan each phase of the implementation.

How can an ERP system help your manufacturing business?

Over recent years, the evolution of business management solutions for manufacturing companies has accelerated rapidly. From eliminating redundant processes and systems, to dramatically lowering the cost of doing business overall, these systems have been designed with manufacturing businesses in mind.

With an ERP system, you can eliminate duplicate data entries in disparate databases, unpredictable cost, quality and accuracy, and employee downtime, all of which cost you time and money.

Benefits of an ERP system

A robust ERP can optimize your business’ performance, by simplifying and organizing your existing processes. For a time-poor manufacturing business, an ERP system can help you gain control of your data and important documents, with everything you need stored electronically on the central system.

Employees can track and monitor production activities in real-time without having to rely on an entire team or finding and collating numerous different spreadsheets. Different departments can track production, material usage, costs and ordering, and are able to make quicker decisions that can help boost overall productivity.

Reducing manual and outdated workflows

For most well-established manufacturing businesses, manual workflows have been part and parcel of daily operation for many years. It can feel daunting when considering a more streamlined alternative.

Despite what many think, the implementation of an ERP system is straightforward and once up and running you’ll notice an immediate improvement in performance.

Concerns around onboarding staff and the potential disruption to customer service are cited as the main reasons businesses are reluctant to embrace new technology.

However, by automating time-consuming tasks, you and your employees can shift focus to more value-add activities and spend less time on administrative work.

Similarly, by consolidating disparate databases you can increase confidence that your metrics and figures are accurate. Your ERP can act as a single source of truth, enabling improved communication between departments and reducing the need for duplication or repetitive data entry.

Onboarding tends to be far more straightforward than many anticipate and customers will often notice a significant improvement in customer service once an ERP system has been implemented, with more streamlined communication, quicker response times and more accurate order fulfillment.

Improve performance - do more with less

While the Modern Manufacturing Strategy has certainly opened-up opportunities for the sector, improving performance and the ability to do more with less remains just as important for businesses operating in such challenging economic times.

Some of the most surprising statistics around ERP systems are to do with ROI. Many businesses don’t fully realise the benefits and cost savings of their system and this can, at times, act as a barrier.

In fact, ERP systems can increase accuracy and reduce overheads providing better material planning and inventory controls. The ability to quantify the cost of labour, time and equipment, as well as gathering insight around exactly how much material and labour is consumed by every order, part, and operation is hugely beneficial.

Make better business decisions

All ERP systems are fueled by data, allowing you to gather a rich pool of vital data and business insights, helping inform future decision making and business improvements. For those looking to expand into new markets or perhaps open up a new site this is extremely important, as senior teams can analyse data from every part of the operation before making any critical decisions.

Better inventory management and stock control

Optimising your inventory management and stock control will also have a significant impact on the bottom line, reducing costly errors or the over ordering of certain lines. With an ERP system, you can manage stock and purchases in real-time, accurately accounting for inventory across all areas of the business.

Materials tracking, inventory monitoring and automatic reordering will bring a further performance uplift, as staff can simply log-in to the system and view the metrics, helping to avoid any shortages, over ordering or miscommunications with customers.

Whether you’re purchasing an ERP for the first time or looking to change providers, choosing a new ERP solution is a big undertaking for any organisation. It takes time to find the solution that’s right for you and one that will deliver a positive ROI.

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