Is Your Business Ready for a Manufacturing ERP System?

Manufacturing companies juggle operations across many angles from inventory, production, sales and procurement to delivery and invoicing. As your business grows, orders gradually increase in complexity and you might start receiving requests for higher order volumes, advance or timed orders, as well as requests for product customisations – bringing great opportunities for your business alongside bigger challenges. 

These are four signs that your business will benefit from a Manufacturing ERP system:

  • You are experiencing rapid business growth and expansion.
  • You are running siloed systems – for example, you currently use an accounting and invoicing system, while your production and inventory movement are tracked manually on spreadsheets. 
  • There are frequent data inaccuracies in your business data, causing time wastage and frustration over juggling manufacturing planning, accounting operations and reporting requirements. 
  • Your business workflow involves complex or cross-related business activities, for example sales/ purchase contracts or advance orders, product maintenance and repair, installation for projects, e-Commerce integration and others. 

If these points seem familiar, chances are your business’s profitability has been affected by these productivity constraints. It is time to look into optimising your workflow, or consider an integrated ERP system to raise productivity and profitability.

Here are three ways a Manufacturing ERP system can solve your operational issues and increase productivity:

1) Reduce dependency on manual processes, such as data entry and reporting with spreadsheets. 

As your business expands, your business operations increase in complexity – for example, instead of only producing on demand, you may also produce certain products to set aside as internal stock, or procure components from different suppliers. More planning is required to balance these aspects while ensuring that production starts and ends on time, and customers receive their products without delays. 

Spreadsheets regularly suffer from data inaccuracies, calculation errors and limited usefulness when it comes to interdepartmental processes, such as when customers contact their salesperson to ask about production status or to check on delivery and payment statuses. 

2) Oversee your entire manufacturing business from demand forecasting to procurement and production planning. 

One of the most underrated benefits of an integrated Manufacturing ERP system is that you can easily oversee and manage your entire business flow from start to end. An ERP system should offer you integrated management features such as bill of materials, sales and demand forecast, material planning, production planning, inventory control /stock reservation and more. 

Here are the key features available in SAP Business One for Manufacturing:

  • Bill of Materials management — A list of all the parts and components required to manufacture an end product, along with the management of BOM revisions.
  • Work Order creation — Creation of a manufacturing task to be completed, along with instructions of the manufacturing process.
  • Materials Requirement Planning — Computes the inventory items required for the end product, identifying the additional quantities required for each component for the production based on existing quantities, forecast, MOQ, EOQ, and triggering the creation of Purchase Orders or Work Orders.
  • Production Scheduling — Automatically schedule machine and labour resources for work orders.
  • Routing & Work in Progress (WIP) — Track your WIP and Rejects to measure production efficiency.
  • Shop Floor Tracking — Automate shop-floor data collection using barcodes or RFID.

3) Manufacturing dashboards and analytics for real-time decision making and internal reporting. 

One challenge in a manufacturing company is to assess the latest information in a concise and easily digestible manner instead of having to sift through, or even combine various reports to find the required information. 

An ideal Manufacturing ERP system should offer a variety of dashboard functions and reports to help users easily assess and track business and manufacturing indicators across every business function – some examples include sales order status, pending goods receipt, production time, cost of goods sold, return rate, item shortages and more.

In an ERP system such as SAP Business One, your users can further trace along the entire process of any business document to instantly retrieve and look at the related transactions of each entry. This improves interdepartmental coordination as well as employee productivity, as users can assess relevant information more easily. 

These manufacturing features are just one aspect of the variety of features in SAP Business One among other modules such as financial, sales, project cost management and service/repair– to find out more about how SAP Business One can optimise your organisation’s specific workflow and operations, contact our team for a no-obligations discussion.