ERP Software Impact on the Manufacturing Industry

Keeping up with the growing demands of more competitive and interconnected global markets can be a difficult task. As a result, manufacturers are having to optimise their production processes. Reaching new levels of efficiency requires sharing information between business systems and production floors; by integrating all of their processes into a single system.

Enterprise Resource Planning (ERP) offers the manufacturing industry the opportunity to integrate all of their manufacturing data into the same system which provides more precise production-floor monitoring, demand forecasts and information sharing. Companies can control inventories, avoid overproduction and devise more cost-effective practices by introducing an ERP system into their operations.

The Internet of Things (IoT) has revolutionised consumer access to manufacturing business as well as the access of those businesses to new and more detailed customer information. Companies can (and want to) utilise new intelligent, connected devices with better insights and integration potential in their factories, which can create new and better revenue streams. The anticipated added revenue and reduced costs will be huge for the manufacturing industry.

ERP systems can – and should – be combined with Manufacturing Execution Systems (MES) which can control the building and integration of ERP into their operations. Integrating these two processes will make that organisation more adaptable and responsive to the changing demands of modern, global markets. This provides real-time information exchange for optimal efficiency, shorter cycles and improved decision-making by management with better, clearer insight into their manufacturing.

Some of the impacts that ERP (combined with MES) is having on the manufacturing industry:

Real-time product adjustments

By using an ERP system, a company can automatically update manufacturing schedules with recorded demand changes for leaner and more efficient manufacturing operations. Floor managers can update their sensors and control mechanisms – with WSANs and CNCs – that allow for data compiled from the IoT to inform real-time adjustments.

This, combined with RFID tags, helps connect stakeholders and move goods better, but they can also help track materials, control production and utilise and manage assets more effectively. Businesses couple other manufacturing and materials data with RFID tags and remote-tracking mechanisms to provide plant managers with actionable insights and constant operational updates. This creates a more efficient, cost-effective and demand-focused manufacturing scheme.

Better demand forecasts

Misreading the demand of a product can be devastating to a manufacturing scheme. Underestimating demands means running out of a product at peak demand which costs a company potential revenue and hurts their relationship with customers. Low stocks and insufficient inventory diminish short- and long-term potential with current order schedules being delayed and organisational reliability being questioned by customers.

Overestimating demand means creating an oversupply and makes moving excess inventory much slower and more difficult as a business ties up resources that could be used elsewhere. Inventory comprising anywhere from a quarter to half of a manufacturer’s assets and misreading demand can severely harm that organisation’s sales. Integrating better manufacturing data and ERP can protect companies by more accurately forecasting demand, responding faster to changes and manage their inventories more effectively.

Prevent rush orders

By integrating ERP as well as MES, a manufacturing company can automate the resupplying process of their inventories before they reach a predetermined, low level, which makes meeting speed and quality demands of customers, simpler. If not, the trust in that company can be threatened by things like rush orders and other supply chain risks that reduce overall performance. Avoiding rush orders means fewer manufacturing delays, minimising additional costs and maintaining materials and production levels.

Smoother change orders

The easier changing of orders can be achieved through better system integration, too. More efficient and quicker change orders can be introduced into production chains with ERP systems to help avoid delays in orders. Similarly, an ERP system allows new manufacturing processes that optimise and improve the current level of production can help an enterprise team price, sell and deliver items more effectively.

Guaranteed in-time delivery

Guaranteeing delivery is not a new service in the manufacturing sector, but the supply chains that have made those possible are being revolutionised by connecting with the IoT; with all its untapped data potential. Supply chain managers can monitor and control incoming and outgoing inventory with amazing accuracy and actionable insights that can be translated into immediate company-wide responses.

The ERP schedules being implemented are built on wireless sensor network data that offers time-sensitive improvements potential in production, inventory and work-in-progress monitoring. The system can also respond to slowdowns or mistakes in production to push back delivery dates when necessary, all of which are used to create the most efficient delivery system possible.

The Internet of Things improves quality

The IoT has informed so much of what makes ERP and MES integration so beneficial to factory-floor and business operations by utilising new, real-time data, manufacturing controls, materials monitoring and continuous insight. Even when there are production or quality issues on the floor, real-time notifications to the entire business system – using IoT sensor networks – allow all related stakeholders to begin the corrective actions needed at the same time.

The impact of materials shortages, equipment failures and other floor issues are immediately incorporated into the production process by dynamically adjusting workflow schedules via real-time events and scheduled tasks. Manufacturers can save time, money and reputations by minimising the impact and risk of manufacturing failures as well as improving revenue and production possibilities.

Access to the IoT, the advancement of MESs and the explosion of ERP systems are continuing to impact and evolve the manufacturing operations of companies across the industry.