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The demands on manufacturers are growing by the day. Shorter lead times and increased expectations around customization are forcing many manufacturers to get more efficient with their manufacturing processes or lose business to the competition. Making the change is not easy, however; manufacturing is not traditionally a center of nimbleness and innovation.
ERP can help. The key to meeting the growing demands on manufacturing is better processes that are more agile and efficient. ERP can help with this evolution of manufacturing processes in several ways. But it can only do it if manufacturers change how they view their ERP systems.
“Consider your ERP as an innovation platform, not just a transactional system,” says Gerry Gray, senior director of product strategy for manufacturing ERP provider, Plex Systems. “That can be as simple as adding IoT devices to support shop floor automation or developing a specialized UI for an operator.”
Here are several ways that your ERP can support improved manufacturing processes needed to compete in 2018 and beyond.
Breaks Down Silos with a Single System of Record
Cloud-based ERP provides a foundation for connected manufacturing, which enables an organization to link every machine, system, device, customer, supplier, person, and even materials to the system of record. This can have huge gains for manufacturing process management.
“Instead of ERP being an accounting or administrative overlay on a business, it becomes the transactional fabric for the entire enterprise, extending out to trading partners,” says Gray.
The needs of food of beverage manufacturers is a good example of how ERP can serve as the fabric for the entire business and improve processes like traceability.
The recent Food Safety Modernization Act requires companies to have instantaneous digital access to records and deep visibility into the supply chain for control, containment, and remediation in the case of contamination. Meeting these demands is a nightmare for manufacturers who use a paper-based system or digital records locked in various silos. With a cloud-based ERP system, however, traceability is built into the system and problems can be identified in minutes.
Delivers Real-Time Visibility from Shop Floor to Distant Supplier
Modern manufacturing is a connected web of suppliers and partners where all must work in sync. Quality management also requires that manufacturers keep a close tab on what’s happening on the shop floor.
ERP systems can improve manufacturing processes by delivering much-needed visibility in real-time to keep every part of this process working smoothly. ERP systems can connect directly with suppliers and partner systems to create better integration.
“For all manufacturers, downtime is a costly business and reducing or eliminating unnecessary downtime, especially supply chain disruption, is critical to any manufacturing operation,” says Andres Richter, CEO of manufacturing ERP provider, Priority Software. “An ERP system enables manufacturers to effectively gain control and insight into their supply chain, minimizing the risk and costs incurred by system downtime.”
It also helps manufacturers get better visibility within their own business.
“ERP enables manufacturers to achieve measurable results on the shop floor, giving them the tools they need to keep up with market requirements, make changes in real-time and yield high quality results on every end product,” notes Richter. “Simply put, EVERY change made in the engineering phase is directly visible on the product floor. This is by far one of the key benefits of an ERP system.”
Creates a Culture of Best Practices
Constant improvement of manufacturing processes is a hallmark of the successful manufacturer, and that’s more important than ever before thanks to the pace of business. This requires both identifying inefficiency, and communicating it across an organization through the transmission of best practices.
“ERP has always offered the promise that manufacturers can implement and continuously improve processes and practices, reflected and supported by ERP,” says Carter Lloyds, chief marketing officer for manufacturing ERP maker, QAD.
What’s held back manufacturers has been inflexible legacy ERP systems, though. But that’s changing with cloud-based ERP solutions, says Lloyds, and manufacturers can now more easily fine-tune processes and promulgate best practices through advanced technologies such as IoT and machine learning, buttressed by easy interfaces to an ERP system.
Best practices can be encoded in a company’s ERP system, and everyone from the CEO down to production line workers can access this information through the system.
Facilitates Internationalization
Very few manufacturers only do business in a single currency any longer. Supply chains wrap around the world, and opportunities to do new business and obtain new material often come from outside the factory’s country borders.
Modern ERP systems can help manufacturers better handle this international component and develop more complex processes that take advantage of global opportunities.
“At the country level, tariff, trade and taxation rules are in constant flux,” says Lloyds. “An ERP that is kept abreast of changes in local financial and global trade rules doesn’t just help the manufacturer stay in compliance, it helps the manufacturer cash in on business opportunities across the value chain.”
Uncovers Opportunities and Maintenance Needs
The advanced analytics in modern ERP systems also can serve to improve manufacturing processes by discovering inefficiencies automatically through artificial intelligence.
There’s nothing short of an analytics and business intelligence revolution taking place right now, and manufacturers can take advantage of it to improve areas such as overall equipment effectiveness and drive process and quality improvement.
Analytics also can spot equipment failure before it occurs.
“ERP systems support predictive maintenance–essential to the manufacturing process–to predict problems in equipment before they occur,” notes Richter at Priority Software.
He says this also can be used for process improvement. For instance, by using sensors in packaging processes to dramatically reduce downtime and shorten production and product changeover time.
ERP is the cornerstone for efficient manufacturers committed to constantly improving manufacturing processes. It tracks and delivers visibility, stores and processes data for insight, and connects operations both in and outside a business. In short, it is at the center of any significant improvement in a company’s manufacturing processes.
by Peter Kowalke
Peter is a journalist and editor who has been covering business, technology and lifestyle trends for more than 20 years. When not writing, he runs Kowalke Relationship Coaching. You can contact him at PeterKowalke.com.
