After a challenging few years, manufacturers are welcoming a new era with significant upticks in business activity. Recent news reports show that factories, in a wide range of industries, boosted output and booked more orders. The Institute for Supply Management’s index of manufacturing activity recently rose to a seven-month high and represents the 17th straight month of growth.
Looking at the Manufacturer’s Use of ERP Software
What does that mean for today’s manufacturer who might be stuck with an outdated ERP system, or worse yet, relies on standalone systems to track operations, production, inventory and more? It’s likely that many manufacturers are in this exact situation and they are ill prepared for the healthy economy that lies ahead.
Many manufacturers installed their current ERP software in the late 1990s to avoid the Y2K problem. Many of these same companies also delayed replacing their ERP system due to the recent recession and downturn in the economy.
The economy is in an upturn and savvy managers have taken advantage of today’s increase in business activity to improve and streamline their operations. They are preparing for the continued growth and laying the foundation for success.
The Case for a Single ERP Solution
As an example of one such forward-thinking organization, a North American auto supplier took time over the last year or so to implement a single, comprehensive cloud ERP solution. This organization replaced over a dozen separate systems once used for accounting, production, quality, problem tracking, preventive maintenance, reporting, and other key functions.
For this manufacturer, a single ERP system with full MES functionality now manages all core shop floor functions. Instead of having a host of mismatched systems, the manufacturer satisfies the organization’s needs and that of the manufacturing and production. The new ERP solution manages operations and includes manufacturing software functionality that covers the management of bill of materials, purchasing, receiving, inventory, basic quality, planning and scheduling, production, shipping, key measures, EDI, engineering change tracking, subcontracting, and document control. The manufacturer didn’t stop there. The single solution tracks time and labor, quoting, maintenance, advanced quality, and program management functions. And unlike multiple standalone systems, all of the manufacturing and production activity is directly tied into the financials.
While the domestic users were getting their systems in order, the international operations were as well. In addition to relying on one standard solution to manage the parent company’s facilities and operations, users in China run on the same ERP system as users in Mexico, subcontractors in the Southeastern US, and everyone on the shop floor in the company’s Midwest facilities.
One ERP System Means One Data Source
Does a single ERP system really matter? Yes. The company leverages a single point of data entry without having to maintain interfaces, duplication, or replication. Not only is this a time saver, it greatly contributes to a reduction in data entry errors and it facilitates the theory of a “single version of the truth”.
For instance, the employee list used for time and attendance is the same one used to track who produced which container, and to evaluate worker performance. The process routing to make the products is the same one used for quality control plans and check sheets. This helps reduces entry errors, speeds data entry, and helps ensure departmental data is in sync.
Ready for Growth
This manufacturer serves as a great example of a forward-thinking company that’s ready to compete. The company is well positioned for the continued economic growth and it will be able to scale production and operations to meet the increasing consumer demand.
By taking the time to standardize on one ERP system, and improve their entire process – not just continue with an inefficient process – the company is poised for a competitive advantage.