How an ERP System can Become a Manufacturer’s Strategic Sales Tool
At DELMIAWorks, we attend a lot of manufacturing trade shows: MD&M, PACK EXPO, and FABTECH, to name a few. These events provide great opportunities to meet face-to-face with manufacturers, learn about their priorities and challenges, understand what enterprise resource planning (ERP) system they are using, and get their thoughts on how ERP is benefiting their business.
When the person we are talking with is in finance or operations, the answers are pretty straight forward—cost management, inventory control, efficient production execution, quality documentation, effective warehouse operations—all common and essential elements of a well-run business.
However, when we ask the sales and marketing people attending these shows the same questions, i.e., “What ERP system are you running? And how do you use it?”, their answers are much more vague. In many cases, there’s a shrug and an admission that they are not sure what ERP the company is using. They often explain that if they need information, they ask somebody else to get it for them. And they say, if we really want to know more about their ERP system, we should talk to their company’s IT team.
I think it is a cultural legacy. Most salespeople simply don’t do ERP. What they don’t realize is that most ERP systems do sales and are fantastic enablers of the sales process. In fact, ERP serves sales quite well.
ERP as an Enabler of the Sales Process
An ERP system knows your customer list. It also knows what your customers have purchased in the past, how much they paid, what your customers currently have on order, and where those orders are in the production process. Additionally, it knows your customers’ shipping locations and their preferred shipping methods. Moreover, the ERP system knows how much is in stock, how long it will take to make more, when it can ship, when it will arrive, and how much it will cost. It can even forecast your customer’s future demand.
Better yet, an ERP system can automate many processes related to sales. It can receive your customers’ orders electronically or it can enable your sales desk to quickly enter orders manually. The ERP can create quotations for your customers, set up regular shipments to them, and create replenishment orders for customers. An ERP system can also create price books and instructional information, produce quality and production documentation, and track and trace the genealogy of products—all for your customers.
From a sales financing perspective, an ERP system knows your customers’ outstanding receivables balance, if they pay on time or are slow payers. It can tell you which customers are profitable and which ones you are losing money on. The ERP system also manages warranties and return material authorization (RMA) transactions, and it knows how much to tax your customers. And it calculates sales commissions.
I suspect we have made our point. ERP is all about sales and customer service.
Like at trade shows, too often the narrative about how an ERP system can become a manufacturer’s strategic sales tool gets left out of the ERP discussion. Instead, most of the information and dialog about the benefits of ERP becomes focused on finance, operations, and quality control, and the customer and sales-facing benefits of ERP get lost in the conversation.
So, if you are evaluating an ERP purchase—or running a continuous improvement program that involves ERP, or sales—don’t forget that ERP is all about customers and enabling your sales team to provide excellent customer service. Get your sales team involved and directly connected with all of the information and automation an ERP system provides. Doing so will lead to a stronger sales team and better sales performance.