Many small to mid-sized manufacturers believe that they can do without an ERP system. They believe that their operation is simple enough that they can control it with a few spreadsheets. Often, this is simply not the case.
Reasons for implementing an ERP system.
Real-time information for decisions
Without an ERP system, your team is flying blind. They make decisions based on guesswork and rules of thumb because they don’t have the data they need. Sometimes they are the right decisions, but more often, they can cost you money and customer goodwill.
Best practice procedures
Software companies often design their ERP systems to support specific industries. As they add customers, they learn industry best practices and incorporate them into the software. By implementing an ERP system designed for your industry, you automatically make your business processes more efficient.
If customers want to know when their order will ship or if you need to know whether you have enough of a critical component to accept a rush order, an ERP system gives you instant visibility into your operations and your supply chain.
Increased customer satisfaction
Customers like accurate delivery dates, and ERP can help you provide them with improved inventory and shop floor visibility.
Managed and controlled costs
ERP systems calculate and collect costs so you always have an accurate picture of your product cost and margins.
Better operational efficiency
By helping you to plan production more effectively, your operational efficiency will improve as you reduce setups and teardowns or unnecessary downtime.
The uniformity of record data that an ERP system instills will help ensure that your records are more accurate, which will increase process accuracy across the board.
Balance of supply and demand
MRP, a component of ERP systems, will help you balance supply and demand so you can reduce inventory while keeping customers happy.
Reduced lead times and increased throughput
Better scheduling and accurate records ensure that your schedules focus on priorities, leading to shorter lead times. Since you won’t have as many orders waiting for tooling or parts, your throughput will increase.
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