ERP is generally viewed as an internal tool to help streamline your processes and keep all information under one roof. In today’s markets, the margin between gaining and losing a customer can be minute. Contributing factors such as price, quality and lead time are often the criteria used by businesses that seek new suppliers. With competitively priced materials becoming more readily available, companies are having to find other ways of distinguishing themselves from competitors in the eyes of potential customers. This is where ERP can help.
As well as making life easier internally, an ERP system also provides an added incentive for potential customers to do business with you. It provides proof of an organised internal infrastructure and also suggests that you are a company that is forward thinking and continuously improving due to being at the forefront of modern technology. So what is it exactly that makes ERP so appealing? The best way to look at this is to see it from their point of view;
– Delivered goods as they should be. The solution that ERP offers to this problem is so simple yet so effective. Companies that use internal spreadsheets or a number of different systems are exposed to potential human error and can also lack traceability. ERP on the other hand eliminates the need for double entry and will automatically create a systematic paper trail. This in itself reduces the probability of a finished product being sent to your customer incorrect. Depending on the industry they work in, they may demand that certain materials with certain certification and quality standards are used. Spreadsheets or multiple internal systems may potentially lose track and not enforce this procedure. ERP on the other hand will ensure the traceability of materials, and also provide proof that quality standards were met. With the inclusion of things such as stop sequences and inspections, ERP goes a long way to reassuring customers that no compromise has been taken when manufacturing their item.
– Realistic delivery dates and improved on time deliveries. As I’m sure you can appreciate, being able to forward plan and to also be confident in receiving goods on time will be high on the priority list of potential customers. If they are unable to do either of the above, it could potentially have a detrimental effect on both their financial position and also their reputation. Customers will often ask for an expected delivery date as soon as they place their order. This enables them to plan ahead and maintain their own efficiency. Suppliers that have no scheduling system in place or carry it out manually are less likely to be able to give an informed estimate. Companies that have an ERP and scheduling system in place will be able to give an immediate response that is accurately calculated based on the algorithms and parameters they have set in place. ERP combined with real time Shop Floor Data Capture (SFDC) will also dramatically improve on time deliveries. With the data being live, any problems during manufacture can be spotted early, meaning that you have more time to react to the problem and resolve it. This in itself reassures customers that you are capable of being proactive as possible. Research carried out by the Aberdeen Group suggests that on average companies that utilise ERP have complete and on time deliveries of 88%.
– The sale price is competitive. This one is often solely compared to the price of your competitors, which at face value, makes sense. It may be that a competitor of yours is able to offer a one off low price as they have some spare material, or they may be desperate for the work. So how can ERP support your case against this situation, you ask? ERP incorporates a number of features that can help reassure customers that they are getting the most for their money. Companies that purchase manually are limited with their data and therefore the bigger picture, whereas ERP combined with Material Resource Planning (MRP I) gives you complete visibility and bargaining power. It enables you to make accurate forecasts and also group purchases, meaning that you can improve material utilisation and purchase at better rates. A common saying is that you can pass on your saving to the customer, and it’s true. If you pay less then they pay less. It’s as simple as that. Another concept of ERP is that anyone, whether you have 10 years experience or 10 weeks, can produce a quotation and come out with the same price. So from a customer’s perspective, whether they received a quote from Tom, Dick or Harry, they can be assured that it is accurately calculated by the system and therefore more likely to be competitive.
In a sense, an ERP system goes a long way to becoming an extra salesman, as well as being an internal management system. The Aberdeen Groups research on ERP concluded that 89% of customers reported better than average satisfaction when dealing with companies that have an ERP system. Remember, these people are potentially going to work with you on a daily basis, and so the efficiency and set-up of your internal operations are just as important to them as they are to you.
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