Today’s mid-size manufacturers need to work smarter and faster if they want to profitably grow their business. Increasingly, these companies are adopting a single-system approach to manufacturing software in order to streamline processes and gain a 360-degree view of their operations.
Comprehensive single-system solutions—featuring pre-integrated functionality and a shared database—stand in sharp contrast to alternatives that simply bolt-on manufacturing-related capabilities to general-purpose enterprise resource planning (ERP) software. As a result, they not only help manufacturers get up and running faster; they also provide up-to-the-moment insights into the business that can help strengthen sales, optimize margins, enhance interactions with customers, improve planning, and facilitate growth.
How a Single-System Approach Helps Manufacturers
Let’s look at six ways that manufacturers can strengthen their business by relying on a single-system to manage their operations.
- Speed deployment. With general-purpose ERP systems, manufacturers often have to rely on systems integrators to add critical functionality from other vendors, such as a manufacturing execution system (MES), warehouse management, and electronic data interchange (EDI), to name a few. The integrations and any troubleshooting across multiple vendors can increase the time required to set up the solution by weeks or even months. By contrast, a single system for manufacturing comes with pre-integrated modules that are all built to work together and share information on a single database, cutting the need for software integration. Additionally, employees get up and running faster, since they only need to learn a single interface used by all the modules.
- Strengthen sales. Among manufacturers that rely on multiple systems, sales representatives often need to manually check in with different departments in order to create a proposal. Meanwhile, sales reps with access to a single manufacturing ERP system have the ability to provide data-based commitments, quotes and proposals using shared information from the shop floor, inventory, and other areas of the business. Here, the BOM goes beyond “bill of materials” to represent the full “bill of manufacturing.” So, for example, if a customer calls to increase an order, the sales rep can get a full picture in real time of when the order can be delivered based on such factors as machine and labor capacity, materials in inventory, and production schedules.
- Optimize margins. Aligning customer prices to the cost of materials is critical to remaining competitive while maintaining profit margins. However, working with multiple systems to handle an increasingly dynamic supply chain can lead to data disconnects and delays that throw pricing strategies out of alignment. However, with a single manufacturing ERP system, updates in the costing module for steel, resins, and other raw materials can be used to automatically adjust customer pricing for finished goods. Moreover, because data is contained in the same system, manufacturers can build customers’ trust through the transparency of pricing tied to current costs—whether it’s the need for an increase due to rising expenses or the ability to pass on savings.
- Enhance customer interactions. EDI serves as an effective communication vehicle between manufacturers and their customers. However, third-party EDI solutions often require employees to manually enter or upload information from the ERP system, leading to inefficiencies and even errors. With manufacturing ERP solutions that take a single-system approach, the EDI solution and the value-added network (VAN) on which it runs are integrated, so that information and forms can be automatically uploaded when sending them out, and incoming communications from customers can be automatically downloaded into the manufacturer’s system—improving both accuracy and responsiveness. The benefits of integrated EDI functionality can also be applied to suppliers, contract manufacturers, and other partners.
- Improve planning. With real-time access to shared data across the organization, manufacturers can take advantage of a comprehensive single system to improve planning in numerous areas. A case in point is capable to promise. Typically, a customer service rep will have to talk to the plant manager about inventory and production capacity. By contrast, with a single manufacturing ERP system, that service representative can simply check the scheduling module, which pulls in information about inventory, capacity, and other factors. Similarly, preventative maintenance functionality can use production and process data from the shop floor to anticipate when a tool will need to be replaced, and data about a quality issue discovered can be used to revise production planning.
- Facilitate growth. A number of mid-market manufacturers have expanded their business models to take on more business opportunities. In some cases, companies that previously sold to larger manufacturers or retailers are now selling directly to consumers online. In many other instances, companies are consolidating via mergers and acquisitions to provide mixed-mode manufacturing, for example, bringing together facilities for injection molding, metal stamping, and assembly. A single, comprehensive manufacturing ERP system typically includes solutions tailored for different types of manufacturing in addition to different modules for common manufacturing operations across the shop floor and back office—enabling manufacturers to add functionality to support their business as it grows.
Remaining Open to New Opportunities
As seen here, a single comprehensive system enables manufacturers to significantly improve their productivity, efficiency and decision-making. However, in a business environment that continues to rapidly evolve, providing a completely all-in-one solution is nearly impossible. So, a manufacturing ERP system also needs to provide the ability to add third-party software, such as specialized billing and tax solutions. Today, the most widely accepted method of integrating this third-party functionality is through application programming interfaces (APIs) that serve as translators and mediators. By adopting a single system with both comprehensive functionality and integration support via APIs, manufacturers can optimize their businesses today while ensuring the flexibility to adapt to the future.