What is ERP
Enterprise resource planning (ERP) refers to a type of software that organisations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. They use internet of things (IoT) devices like sensors, trackers, and cameras to provide on the ground info to management in a central location. This means that fast, efficient decisions are often made by automation instead of human interventions, increasing productivity. Additionally, when problems do arise, it’s easier to identify the cause and deploy a fix. This can reduce any downtime and keep operations running smoother for longer. Enterprise Resource Planning software can be divided into four different categories. Box ERPs, Large Scale ERPs, Intermediate and Flexible ERPs, and Industry Specific ERPs. A flexible ERP is likely the most appropriate solution for a light manufacturing and assembly business.
The upside for light manufacturing and assembly businesses
Recent innovations are allowing factories to become more connected than ever, making this the Fourth Industrial Revolution or Industry 4.0. According to a McKinsey report, Industry 4.0 trends are delivering remarkable manufacturing improvements, including a 30-50% reduction in downtime and a 40-50% increase in [labour] productivity.” But that benefit relies on efficient communication between the floor and your management team. Some small factories might think there’s no way they can afford an ERP system. The larger players are focused on enterprise deployments, that’s true. But cloud-based operators make it easy to get the benefits even as a small light manufacturing and assembly business. You can scale flexibly later.
What ERP does for factories
There are numerous benefits of ERP on the shop floor, but here are just a few key ones:
● Materials tracking: An ERP can monitor critical components and assembly specific BOMs (Bill of Material) so you can prevent production delays
● Inventory management: ERPs can take the place of low-skilled inventory labour which most small-medium businesses don’t have the budgetary headcount for.
● Labour efficiency: ERP can provide you with labour reports on a per-process or per-shift basis, and track details either at every stage or at the end, giving you the option to reject or scrap components in every process for continued visibility.
● Life cycle management: ERP allows you to monitor the end-to-end life cycle of your goods.
● Enrich customer experience: With this oversight, sales teams and customer services agents are armed with more information to guide the customer through any delays or production issues.
● Price properly, by using ERP systems to optimise assembly, you can accurately project the total cost of manufacture for a given product, allowing you to set the correct price when you take it to market, both to maximise profits in the short term, and to adjust pricing to any changes in the supply chain in the future.
Keen to explore how an ERP system can help your light manufacturing and assembly business thrive? Talk to our helpful team about your cloud-based options today.
How ERP systems can help your light manufacturing and assembly business thrive