Research & Best Practices

How Does ERP Software Help in Manufacturing?


In an industry such as manufacturing, where efficiency is constantly sought yet difficult to find, enterprise resource planning (ERP) can be a game-changer. Manufacturing ERP  is a centralized method of managing every aspect of facility operations and processes, from production to payroll. ERP allows for unprecedented visibility, coordination and management across the disparate processes that make up a business — ultimately resulting in greater operational efficiency.

What is manufacturing ERP software?

In the simplest possible terms, manufacturing ERP software serves as the centralized hub through which all operations and processes within your facility can be observed. These platforms can consist of numerous applications that all share a common database and integrate with each other. With the advent of the Industrial Internet of Things (IIoT) and Industry 4.0 principles, the adoption of ERP in manufacturing takes on new dimensions. Now, smart equipment can communicate with the central ERP system to provide operators with real-time insights into their performance to make even better decisions. This means manufacturers can use their ERP platforms to streamline their maintenance, supply chain, quality assurance and more.

Manufacturing ERP: The “hows” and “whys” 

ERP is a natural fit for the manufacturing sector, given the numerous processes that must occur every day just to keep a facility running. Some examples of processes that ERP can help manage and streamline are listed below — be sure to note the numerous ways in which these processes can now “talk” to each other via ERP, a major benefit that will be discussed further below.

  • Inventory management: From MRO to equipment spares, ERP can act as a centralized resource for inventory tracking, data analysis and replenishment strategy.
  • Supply chain: ERP enables visibility and organization for vendor performance tracking and can draw on data from internal and external sources in order to assist with more efficient supply chain planning and management.
  • Maintenance: Manufacturing ERP software facilitates effective maintenance by centralizing scheduling, ticketing and work order management, while also enabling powerful data tracking and analytics to improve maintenance effectiveness.
  • Equipment performance tracking: ERP modules can store, track and analyze equipment performance data from sensors and reports, enabling more informed, proactive, targeted maintenance.
  • Quality assurance: Enterprise resource planning software can track QA results, creating vast data stores over time that can play a role in early identification of maintenance needs.
  • Purchasing: With ERP, purchasing and requisition can be easily organized and can operate with visibility into other relevant areas of the operation.
  • HR: In addition to manufacturing operations and support, ERP can also be applied to HR functions such as performance reviews, goal tracking and more.
  • Artificial intelligence: The use of AI for ERP systems allows manufacturers to automate many tasks, improve their data processing and refine their analysis. The result is a smoother, more efficient system that makes it easier for companies to experience the benefits of ERP in manufacturing.
  • Cloud connectivity: By connecting ERP systems for manufacturing within the cloud, manufacturers can continue to make adjustments on the fly across the entire lifecycle of a product, even with multiple facilities and teams involved.

Now that you understand the “hows” of ERP’s impact, let’s look at the “whys” — the benefits of implementing an ERP project.

  • Increased visibility into processes: ERP acts as a centralized, accessible “single source of truth” for every process in the system. Anyone can access information from any other process or department, which makes it much easier to foster coordination, collaboration and — as discussed below — communication to introduce benefits and innovations.
  • Communication between different departments: With increased visibility across functions and processes comes the breakdown of barriers to communication. Process “silos” — the invisible (or actual) “walls” between different groups and functions — can result in redundant work, inefficiencies and missed opportunities for collaboration. ERP solves these problems through open channels and transparency.
  • Centralized data collection and analysis: From machine sensors to QA tracking and more, ERP facilitates the modern, data-focused facility and all the benefits that this unprecedented amount of information and insight affords. Data analysis can drive more informed, effective decision-making in areas such as maintenance, machine usage, procurement, supply chain and more.
  • Greater efficiency in processes: Over time, as more data is collected and personnel grows accustomed to the increased visibility provided by ERP, processes will become streamlined, cross-functional efficiencies will be identified and productivity will increase.
  • Overall cost reductions: With the above benefits come cost reductions and efficiencies — one of the primary ultimate benefits of investing in ERP software for manufacturing.
  • Design and engineering: ERP systems for manufacturing help facilitate better collaboration between design and engineering teams, resulting in a better finished product and fewer defects discovered during production. This is essential for quality assurance and keeping costs from getting out of control.
  • Financial management and MRP: Material requirements planning (MRP) is a system for tracking materials and supplies in a facility. Although there are many differences between MRP and ERP systems, ERP for the manufacturing industry can integrate with MRP and financial management modules to make keeping tabs on resources much more manageable.

ERP software can streamline numerous processes, including maintenance planning, scheduling and strategy. At ATS, one of our core missions is to help manufacturers make use of data-driven technologies such as ERP and CMMS in order to keep plant operations up and running while continuously improving. To learn more about industrial maintenance and MRO asset management solutions from ATS, contact our experts today.

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