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Why Manufacturing ERP Software is Key to Managing a Global Supply Chain

Posted by IES on Jan 14, 2020 11:00:00 AM

manufacturing erp softwareIn manufacturing, managing a global supply chain requires a proactive and agile approach. Market factors force supply chain changes that manufacturers must quickly overcome or run the risk that the entire delicate infrastructure will fail.

To accomplish this, businesses must enable the efficiency of interactions between production delivery and backend finance and accounting, sales, distribution, marketing, and quality assurance. Manufacturing ERP software is the technology connector between these departments. ERP for the manufacturing industry eliminates silos and increases the efficiency of your supply chain.

Here’s how ERP software is revolutionizing the manufacturing industry.

Understanding the Supply Chain Infrastructure

The supply chain ecosystem is increasingly complex in today’s global markets. Today’s supply chains include product manufacturers, suppliers and distributors, retailers, and the customers themselves. Sourcing and procuring products, converting, and shipping logistics are all standard tasks associated with the supply chain today.

Supply Chain Quarterly calls the technology infrastructure in this process, “supply chain’s missing link.” They note that no supply chain activities can occur without a robust and effective infrastructure.

Each department within the complex manufacturing ecosystem can make decisions in a vacuum. From finance to sales, these silos can cause major inefficiencies that add big costs to companies when they work at cross-purposes. When manufacturers lack a cohesive vision of their supply chain, bad decisions are inevitable. This wastes time and costs money no matter when or where it occurs. 

ERP for the manufacturing industry helps companies control and monitor the global supply and demand behind the supply chain. The software can take the formerly manual processes around material and information flows and streamline it to increase operational efficiency and improve productivity. There are clear-cut benefits that your company should consider.

Benefits of Manufacturing ERP Software in the Supply Chain

ERP stands for “enterprise resource planning,” which is business process software designed to integrate and coordinate a company’s divergent departmental activities into an integrated whole. In manufacturing, ERP software becomes a digital control tower to see activities affecting the supply chain across operations, sales, manufacturing, human resources, and finance. Manufacturing ERP software gives you a 360-degree view of everything affecting the supply chain.

The benefits of ERP for the manufacturing industry include:

  • Better customer service. Customers will be less frustrated when they feel confident that the correct product assortment will arrive on time and at the right location. Your customer service team will have real-time data at their fingertips to keep clients aware of any delays that could affect their business.
  • Lowered operating costs. A better grip on your global supply chain means lowered inventory and production costs. Having large inventories collecting dust in your overseas warehouses doesn’t help anyone. Having eight warehouses when you only need six wastes big money. With the right technology, you can avoid all of these issues.
  • Improved profit margins. ERP technology helps supply chain managers to come out on top. The best supply chain teams control and reduce costs. ERP software increases bottom-line profits by giving these teams the understanding necessary to enable agile decision-making.
  • Increased cash flow. Moving products efficiently means faster cash flow. ERP software in the supply chain can help managers spot inefficiencies across the architecture. Its just math: If you can deliver product sooner, you invoice faster, and cash flow improves.
  • Achieving a competitive advantage. Faster time to market and quicker response means supply chain managers can proactively achieve their ultimate goal of competitive advantage.

In today’s global economy, you need every advantage you can muster. Competitor encroachment, trade tariffs, worker shortages; manufacturers face tremendous challenges. ERP software can help.

Understanding Manufacturing ERP Software

How many systems does the average supply chain manager interact with each day? How many mundane tasks could be automated? How many bottlenecks could be avoided?

ERP software won’t fix all of your business problems. But these tools will have a direct and positive impact on:

  • Planning for the dips and flows in the global supply chain. Manufacturing happens when inventory is ready. ERP software improves job scheduling efficiency by helping managers with accurate resource lists showing what’s being consumed and what’s still sitting on the shelves. ERP can make your inventories less wasteful and replenishment more efficient. It can help your supply chain manager spot inefficiencies and respond appropriately.
  • Procurement and resource allocation management. Whether it’s handling warehouse resources on the backend or manufacturing and customer service on the front, ERP software is smart enough to help you manage it. Manual tasks like vendor communication can automate, transportation tracking happens in real-time, and overall supply chain coordination improves.
  • Production and delivery numbers. When production starts, all labor and machine resources can be tracked in real-time in an ERP. You can create a BOM for each item. Shipping is recorded in the ERP, which can eliminate manual process errors. It becomes easier to modify work orders and change job tasks, which makes for happier customers in the long run.
  • Shipping and invoicing. This sounds simple on the surface; products ship out and you mail a bill. But how often does this process derail when one department fails to communicate with another? The answer is “it happens,” but ERP software could be the central repository for your customer response. Manufacturing ERP software can handle every part of your production process, including shipping and invoice.

Modern ERP software heavily improves the manufacturing supply chain. It can pay for itself in short- and long-term efficiencies to improve your business. ERP can automate from procurement to product delivery, cutting down on operational expenses. More accurate demand forecasting and a leaner inventory mean your just-in-time response will improve.

Today, the supply chain requires more flexibility and better communication between external suppliers and internal cross-departmental teams. If your organization struggles with disjointed processes, a lack of agility, frustrated department teams, or unhappy customers, ERP software can help. 

How many technology platforms do you use to accomplish your supply chain? Talk to IES about how Microsoft Dynamics ERP software could improve your manufacturing business. We offer free demos of these state-of-the-art products to help you understand the value proposition across your supply chain. Call us today.

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Topics: ERP