When it comes to managing the critical steps associated with manufacturing processes, many companies struggle to maximize their operational efficiency when weighing costs, lead time and quality control during each production run. This is partly due to the fact that full transparency during the planning and execution stages of production is essential when maximizing ROI, and many companies are unequipped to handle each step at maximum efficiency.
Thankfully, ERP (enterprise resource management) systems like SAP Business One have completely changed the way companies manage their manufacturing workflows, eliminating many of the issues organizations experience when planning their production runs. Here are four problems commonly experienced in the manufacturing industry and how the implementation of an ERP system can help solve them.
Insufficient Planning and Out-of-Stock Issues
Regardless of whether a company suffers from a lack of manpower or improper forecasting tools, poor production planning can have disastrous effects on an organization's revenue stream. ERP systems take the guesswork out of inventory demands and production planning by always keeping the company's administrative processes and operational needs in full alignment. SAP Business One utilizes an MRP (material requirement planning) tool to recommend production order assortment and quantities automatically, based on day-to-day transactions. Pre-calculation allows users to run customer-specific scenarios to simulate lead times and profit contributions for each production run. These features and many others are designed to identify gaps in the ordering process and ensure adequate stock levels are always maintained.
Lack of Regular Production Updates and Quality Control
Lack of visibility during production is a struggle many companies face when managing their manufacturing processes. ERP systems allow system administrators to have full access to their real-time production statuses while maintaining extremely accurate inventory management protocols. Through virtual warehouses and bin locations, SAP uses integrated inventory tracking software that lets users know where all of their products are at any given time. This is extremely valuable when it's necessary to resolve quality and productivity issues quickly and reduce liability risks. All of this functionality can be accessed and managed through one centralized solution.
Wasted Resources and Higher Costs
Unfortunately, all of the costs associated with manufacturing delays and wasted resources can be extremely hard to calculate if companies don't have the right software to track it. SAP Business One can integrate with mobile applications like Produmex Operator to help ensure that goods and services are produced efficiently, reducing wasted materials and increasing build quality. Produces Operator allows engineers and operators to record all of the labor associated with productions orders, along with the number of materials used, giving companies real-time cost analysis on their projects. Having this visibility enables product managers to make educated decisions around their cost analysis and production planning efforts, bringing operational costs in alignment with the company's goals. This efficiency also means companies can reduce their carbon footprint by removing the need for paper transactions and increasing their data accuracy.
Inadequate Reporting and Certifications
For companies that manufacture in consumer goods, lack of accurate reporting and proof of compliance can put all business operations to a standstill. One of the shining qualities that ERP systems like SAP Business One have is their ability to track and execute industry compliance standards through clear, transparent data throughout the entire supply chain. Crystal Reports is a market-proven data analytics tool for SAP that allows users to extract valuable logistics and financial information in an easy-to-use self-service model. Through detailed reporting users can run a side-by-side cost analysis on theoretical production costs versus actual costs, ensuring each manufacturing run maximizes return on investment.
ERP systems are designed to help small and large enterprises alike improve their business processes and scale their operational abilities. By deploying systems like SAP Business One, companies are able to manage their manufacturing processes much more efficiently while maximizing production ROI and reducing overall costs.