7 Ways ERP Software Solves Biggest Manufacturing Problems

Process Manufacturing faced some kind of problems which were solved by the Enterprise Resource Planning (ERP) system, which can handle the whole production process and complete the production on time.
March 1, 2024 by
Uyen Duong

Manufacturing industries have progressed significantly due to profound changes in supply chain operations and more innovative methods. Earlier it was a challenge for business owners to manage the manufacturing industry. The advent of novel technologies has altered the ways industries are operated. Manufacturing processes are simplified because of the application of advanced technologies. Technology has made organisations operate more flexibly, 75% of small businesses use ERP software to manage businesses.

I. Overview of ERP Software?

Enterprise Resource Planning (ERP) software serves as a smart solution for streamlined business management, eliminating bottlenecks. In the manufacturing sector, an ERP system becomes imperative to achieve departmental equilibrium by consolidating all functions under a centralized system. This integration facilitates seamless data access for all users. The extensive functionalities of ERP software offer numerous advantages to the manufacturing industry, addressing challenges from raw material sourcing to product delivery at the customer's doorstep.

In the realm of manufacturing, data plays a pivotal role, and leveraging ERP software proves instrumental in optimizing its management. This sophisticated solution facilitates seamless data sharing among various departments, addressing the constant influx of substantial data generated in the manufacturing industry on a daily basis.

An ERP system efficiently organizes and stores this data in silos, ensuring a structured and easily accessible repository. Authorized users can retrieve the necessary information whenever required, promoting a streamlined workflow. Notably, in cloud-based ERP systems, robust security measures are in place, providing a secure environment for storing and managing manufacturing data effectively.

ERP systems can be commonly divided into three types – On-premise ERP systems, cloud ERP systems and hybrid ERP systems.

  • On-premise ERP systems– In this type, the ERP software is in-house servers in the office location. The hardware is maintained by the IT experts working in the office.
  • Cloud ERP system – An ERP vendor provides accessibility based on the subscribed payment. Even remote workers can access cloud ERP software by using any device with an internet connection.
  • Hybrid ERP system – In this type, an on-premise and a cloud ERP system are used. Its also known as a two-tier ERP system.

II. Challenges of the Manufacturing Industry

The manufacturing industry faces a lot of challenges every day. Modern technologies are the best to tackle these challenges and bring a balance between humans and machines to achieve maximum productivity.

Let’s look at some of the challenges faced in manufacturing industries.

1. Inability to acquire accurate demand forecasting

Demand forecasting is a significant aspect of any enterprise. An organisation needs to analyse the market and consumer demands. There is new technology to provide forecasts on consumer and market demand. Companies must focus on getting the right tools to assist them in forecasting future demand. If not, the company will have reduced sales and the customers will be reduced, significantly impacting the business growth.

2. Managing Inventory

Inventory management is the greatest challenge of the business. Small manufacturing businesses conduct inventory operations manually, which is time-consuming. Manually, it is a tedious task to check if there is overflowing stock or less stock. Automation is the key to combat all these challenges.

3. Wastage of resources

This issue arises due to poor planning and inaccurate formula management. Resources should be used cautiously. Implementing ERP software will help in the careful usage of resources, reducing wastage and unwanted expenses. It will eventually help accelerate business growth.

4. Follow up with sales leads

Each sales lead strategy has to be specifically addressed. Most of the time, industries need to follow up with their prospects. Instead, use a different approach to follow with your prospective customers.

5. Failing to comply with updated regulations

Many industries need help to keep up with the updated regulations by the government and the regulatory boards. An ERP system will automatically notify the executive whenever compliance has to be updated.

6. Change Management

The manufacturing industry finds it very tedious to adapt to changes in the enterprise. New technologies are launched for the efficient management of the business. So industries must be ready to adapt to these changes to operate the business efficiently. Proper planning and implementation of the right strategies can help adopt enterprise changes.

7. Lack of Skilled Labour

Efficient workers are essential to adapt to any industrial changes. With skilled labourers, managing and balancing the entire business will be easier. Highly talented labourers will quickly identify the problems and takes measures to fix them.

8. Maintenance of Industrial Equipment

If any industrial equipment stops functioning, it will block the manufacturing process. So it is vital to service and do maintenance work to the equipment every time whenever it has to be done. It will continue the workflow without affecting the production process.

III. How does ERP Software help in solving Manufacturing problems?

ERP software is a boon to combat all manufacturing challenges. ERP systems are designed to solve the problems of an entire organisation. It is a huge technological advancement in the business field.

  • Inventory management– ERP system can automatically check the inventory levels and notifies if the stocks are high or low.
  • Supply chain management– ERP system helps access data in real-time with any device. End-to-end transparency in the entire supply chain process. Reduced wastage and lower unnecessary expenses.
  • Operational efficiency – ERP software in-depth examines data and optimises it. Due to this, bottlenecks can be reduced, operational costs can be reduced, and productivity will increase.
  • Financial management– Accurate records of all the accounting details are recorded. Forecasts and reports help in making strategic decisions beneficial for the company.
  • Quality control – It is an integral part of the manufacturing process. ERP software help in making high-quality goods when the formula or the method is already set in the database.
  • Customer satisfaction– Customers are significant to your business. Improve customer engagement by providing them access to the supply chain process. Like, as providing them access to view shipment detail, the location of the product or manufacturing progress.
  • Expert labourers – It is important to give ample training to the labourers to interact with the ERP system. Only then will the software be productive. Efficiently skilled labourers will help in gearing up the growth of the business.

IV. Conclusion

ERP software is the greatest invention helping businesses to grow and stay ahead of the game. Modern ERP systems are game changers. Cloud ERP system is loaded with many industry-specific features. Plus, when opting for an ERP system, customization is available. Covid 19 pandemic made us realise the importance of efficiently implementing an ERP system to work from the comforts of home.

I hope that the above article has provided you with useful information about the challenges that manufacturing companies faced with and then put forward several solutions  that ERP system can handle. If you have any questions, please contact us immediately for further advice.