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ERP and its benefit in manufacturing industry

Manufacturing module in ERP system bridges the gap between manufacturing and sales and substantially increases the quality of communication between manufacturing and sales regarding demand and supply.

Several studies conducted reveal that implementing ERP solution in manufacturing organization can bring many finite and infinite benefits. Majority of these studies reported substantial performance improvement in several areas as a result of their ERP implementation, including their ability to provide information to customers, cycle times and on-time completion of scheduled task.

All these studies shows that manufacturing organization that have implemented  ERP system are consistently higher in performance across a wide variety of productivity measures such as sales per employee, profit margins, return on assets, inventory turnover, asset utilization and accounts receivable turnover..

It is also a significant fact that companies can start experiencing the gains as soon as they complete the ERP implementation process and the growth trend in the business performance and process improvement will evidently visible. These trends will be ultimately reflected in their financial market consistently with higher market valuation and company’s growth will be consistent with the presence of both short-term and long-term benefits.

Life of an ERP system

There can be a question raised about the life of an ERP system. If a company implements an ERP system how long they can manage with the system? These questions are raised because the rapid changes happening in the technology front.  However, there is not much space for this concern. Because a well-performed ERP system that is implementing today can be maintained till about 15-20 years.  And it is always advisable to go for a new version of the system rather than giving a ‘facelift’ with the latest technology

Selection of an ERP system

It is the selection of the right ERP system holds the key.  It is very important while selecting new ERP packages to suit the organization's needs. Ideal Web-based and cloud-based ERP packages  are available in the market today.  Organizations must take extra care to choose the right ERP system for their business process. The appearance of new system design and technology and its interface often means that new things can be done that would give users many advantages. There is no easy way to include new technology in older systems.

Sales Operation Planning in Manufacturing

Whatever manufactured must be sold in the market. That’s the basic rule. The revenue can only be generated through sales and it is therefore an efficient ERP system must be integrated with Sales Operation Planning module.  The module has the authority to organize the use of the capacity and the supply of material to meet the operation plan. It also provides the means of comparing resources available against those required and this check is carried out by using resource requirements planning.

The plan takes into account the fact that forecasts and plans can vary and, therefore, a provision is made for adjustments. ThisComputer Technology Articles, difference is taken into account by storing the well-determined level of extra finished goods.

Following benefits can be achieved through effective Sales Operation Planning

  • Increased forecast accuracy
  • Reduced inventories
  • Improved lead times
  • Increased constraint visibility

This module in the ERP system bridges the gap between manufacturing and sales and substantially increases the quality of communication between manufacturing and sales regarding demand and supply.

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


Hello, My self Pratik Gaikwad,

I working as content witer for Eresource ERP which provides ERP Software for Manufacturing, Construction, Pharma, Logistics and Transport Industries.

Than You.



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