Business owners and departmental heads of manufacturing companies may notice "chinks in their armour" regarding business process efficiency. Examples include not entirely trusting inventory levels, potentially avoidable production errors or inability to access vital business information in a timely manner. Whilst such challenges may have been manageable in the past, without the right systems in place, they can quickly amplify and create strong barriers to growth and increased profitability.
These scenarios may pose the question of whether a modern Enterprise Resource Planning (ERP) solution could improve the business. At this point, it can be countered with concerns about risk, disruption, and cost, which are all completely valid and addressable points. But all too often, a subjective acceptance of the status quo can be reached too early, shutting down any further consideration of a more thorough systems review.
Without a complete full-blown failure or an end-of-life situation with your existing IT systems, knowing at what point you need a modern ERP system, can be challenging.
You are not alone! SME manufacturers that benefit most from ERP software often face similar challenges and frustrations.
Let's explore 10 signs that an ERP solution could improve your operation as well as your bottom line:
Does your accounting function have to do lots of manual data entry and work through paper-based invoices and sales orders? Does it require wading through multiple spreadsheets to reconcile or consolidate financial information? This is a typical scenario for companies with separate or poorly integrated accounts and operational systems versus a single ERP system in one database.
Do you have an excessive number of internal meetings to share the status quo on operations or have to visit the shop floor to find out what is actually going on? Do you have to rekey information on engineering changes and BOMs into the supply chain management system?
Modern ERP systems enable one version of the truth through a single fully integrated database across all functions and enable effective communications throughout the platform. Furthermore, cloud ERP solutions offer full systems access for mobile workers - be that from home, multisite shop floors and warehouses, through to field sales and service staff.
Using spreadsheets to support key business processes and operations is a clear signal of limitations of the systems in use. Are your staff members working outside the system and creating their own processes to do their job more effectively?
This way of working opens the door to potential mistakes, data quality and version control issues and inhibits the sharing of crucial information. With a new ERP system, these problems will be a thing of the past, as a new ERP system will integrate the functions of multiple departments within one single database.
Are you spending too much time collating and understanding data? Modern business intelligence about inventory levels, sales orders, where things are in the production cycle, and access to a knowledge base is critical. Instead of making a higher value-added contribution to your business, it can be frustrating, not to mention costly, to spend your time looking for information.
Competitive advantage depends on business agility, speed to market and data-driven decision-making. With a modern ERP system, you can access centralized, version-controlled documents, gain real-time insight into your business processes, and see how they work within other departments.
Relying on one or two vital individuals that hold the key to business process knowledge or ways of working is a considerable risk to the business. As your business has evolved, you may not have fully documented business processes that support current working methods. You are further exposed if your systems depend on a key individual within the business or an external consultant who helps and manages a "legacy" system. What if they leave, retire, or win the lottery? What happens when these key individuals are on holiday or off sick? How easy is it to onboard new members of staff?
Your business is successful because it prides itself on delighting customers and ensuring that you meet customers' needs. However, as your business grows, it can be challenging to maintain the same level of customer service. It can be hard to keep up with responding with timely, accurate quotes, lead times may extend and order errors can creep in. Without the right customer-centric system, you may not immediately access the correct information or control the business processes to avoid customer issues.
A modern ERP system covers the whole quote to cash process, with complete visibility of real-time information for better order management and oversight of delivery and service. This helps avoid customer issues and, in worst-case scenarios, alerts you to a problem before it's too late. An integrated Customer Relationship Management (CRM) system enables you to engage more deeply with customers and develop positive, growth-oriented relationships.
You may be a growing business, but perhaps you are not seeing the anticipated uplift in profitability. Poorly managed costs only compound over time. You need a system in place to know where everything is, and to collect cost data - managed in real-time, for analysis to help you see how to improve profits. Perhaps you are hiring additional staff to fill those administrative gaps caused by poor processes that are not keeping up with the business. These problems could be resolved by deploying a more effective joined-up ERP system.
Cash is king, especially in the current economic climate and inventory ties up cash. Suppose you hold more raw materials, work in progress (WIP) or finished goods inventories than you need or want. In that case, it's a sure sign that you lack the means to measure and track inventory effectively.
ERP software provides the best support for perpetual inventory quantities and values, and alerts for situations when limits are exceeded. It also helps to reduce costly inventory by using a KanBan approach to inventory optimization - triggered by customer demand and preferred minimum stock levels.
We know that global supply chain problems are not going away any time soon. However, you need to ensure that your systems are not causing bottlenecks such as time-consuming procurement processes, decisions on whether to make or buy, or sourcing products with alternative suppliers.
A modern ERP system delivers end-to-end supply chain visibility with fully integrated Materials Requirement Planning (MRP) through sales, inventory, purchasing, BOM, to production control, with support for full traceability at every level. Furthermore, you can make your procurement processes more streamlined, automated, and efficient by allowing your suppliers to communicate directly with you through a safe and secure online environment.
Finally, one of the most obvious signs that you should consider a new ERP system is when you are not getting the IT support you need.
It may be a case that your staff cannot resolve issues without resorting to costly support from your IT supplier. Running multiple systems can cause conflicts of interest and a "blame game" on which system is causing the issues. If support tickets or change requests are not handled in a timely manner, this could be a sign that your systems are approaching end of life. Ultimately, if software, database, or operating systems are not kept up to date, your business may be at risk of cyber-attacks.
A modern, single, business-wide ERP system supported by a single vendor will mitigate this risk. Cloud ERP options provide continuous software updates with new functionality, ensuring business continuity.
How many signs do You follow?
If you have made it this far, this may have made for some uncomfortable reading, particularly if this is somewhat relatable to your business. The great news is that you are a stakeholder in an amazing manufacturing success story, so think about the possibilities going forward if you can resolve these issues!
A modern cloud ERP system, such as RamBase, is specifically designed to address these challenges and future-proof your business. RamBase is a perfect fit for small and medium-sized businesses that make high-quality physical products in highly regulated industries. It is built for the cloud with best practice processes to support your business entirely.
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