ERP Solutions in Manufacturing: A Path to Frictionless Production
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Marcie Nguyen
Marcie is a skilled writer at Havi Technology focusing on creating content for marketing, eCommerce, point of sales, and ERP solutions. With over 8 years of experience in the retail, eCommerce and ERP technology sectors, Marcie is dedicated to providing insightful answers to business owners of all scales.
ERP solutions for manufacturing are the game-changers in resolving shop floor limitations.
Do you resonate with other manufacturers - constantly dealing with shop floor inefficiencies? Perhaps this is due to:
Consider the following concepts: automated procedures, precise BOMs, and real-time insights. These are the advantages of adopting ERP systems. The systems offer a comprehensive approach, going beyond just managing bills. Never again guessing material usage or battling with product tracking and costs.
Let’s find out more below.
ERP - The Command Center for Frictionless Production
1. ERP adoption in manufacturing
In the highly competitive manufacturing industry, managing operations efficiently is challenging. Each wasted minute, each production delay, and each quality error results in lost income and potential advantage for rivals. Even so, manufacturers are under constant pressure to supply high-quality products on schedule and budget. This needs precision and interaction, which cannot be attained by siloed systems.
That's why we need an Enterprise Resource Planning (ERP) solution to automate and centralise manufacturing procedures.
What is an ERP system?
An ERP system contains full software suites that integrate all key operations inside a manufacturing business. You may consider it a central nervous system that connects different functions like finance, production, supply chain, and employees. An ERP solution for manufacturing has 6 key features:
2. Manufacturers taking action with ERPs: Practical case studies
Case No.1: TR Savage & Sons Cuts Half Scheduling Time with ERP Adoption
This is a case about TR Savage & Sons - a successful manufacturer with over 100 years of experience in Australia. The ERP system plays a huge role in increasing productivity and empowering employees.
Managing production schedules for diverse customer groups became a major problem when the company expanded. In the past, TR Savage & Sons relied on a team of 2.5 people to handle "scheduling around the clock". It was so resource-intensive that they could not concentrate on more important areas such as production improvement.
Values gained from the ERP solution for manufacturing
To solve this problem, Havi Technology helped TR Savage & Sons create an MRP system in Odoo. The system automates multiple scheduling activities and integrates with different features: inventory control, sales, etc. It completely changed their approach to planning in 3 significant ways:
The result was huge. With less time spent scheduling, they can concentrate on corporate planning and improving customer relationships.
Case No.2: Baraja's Exponential Growth Fueled by an Open-source ERP
Baraja’s story proved that an ERP system can stimulate rapid growth in a manufacturing business. Since 2016, Baraja had difficulty with operations inefficiency while maintaining strict quality control for their LiDAR technology.
Their original operations were centred upon manual methods for purchasing, inventory control, and manufacturing. This blocked visibility into their workflows and scalability. Further, for effective procurement and inventory control, they needed a more powerful system to maintain a complicated BOM with several components.
Values gained from the ERP solution for manufacturing
In 2 weeks, Havi assisted Baraja in implementing Odoo, an open-source ERP system. This journey aimed to optimise Baraja's operations and help them get a better insight into the entire organisation. Odoo's modular design helped them to tailor features such as purchasing, inventory, production, and quality control. 3 powerful effects were noteworthy:
Baraja's story demonstrates how an ERP system becomes a valuable method for fast-growing manufacturing companies. By reducing paperwork, lowering expenses, and increasing efficiency, Baraja is well-positioned for its ongoing global expansion.
3. How ERP systems transform your production control
Manufacturing companies can be bogged down due to the complexity of their workflows, resource constraints, and ever-changing customer needs. However, they can gain back control and achieve operational excellence by using ERPs in the following ways:
#1: Optimised Capacity Planning
To estimate production capacity, companies using outdated approaches frequently have to make assumptions or oversee complicated spreadsheets. These manual tasks result in delays, late deliveries, and unhappy customers.
Here, ERP solutions for manufacturing help you generate actual capacity plans. This can be achieved through analysing production data, lead times, and relevant resources. What if you can quickly determine whether you have the required resources to handle upcoming orders?
A custom furniture manufacturer, for instance, can utilise an ERP to forecast in certain cases. One case is to forecast how many pieces their team can produce each week by considering the complexity of each order. As a result, they can take on new tasks instead of overflowing their workshop. This lets you make proactive modifications: recruiting temporary personnel during busy times or outsourcing.
#2: Real-Time Visibility
Material management is a never-ending challenge. Errors can end up in production delays, stockouts, and extra costs.
ERP solutions for manufacturing give you visibility into your material usage. Inventory levels are automatically updated each time a component is used in production. This avoids unexpected expenses and helps you make better decisions on materials acquisition.
For example, a car manufacturer can record the precise amount of steel required for each part of the car with an ERP system. When the stocks fall below a certain threshold, the ERP system then initiates automatic purchase orders. This helps the manufacturer to prevent production interruptions.
#3: Streamlined BOM Management
Complex BOM management can be difficult, particularly when you handle several product variations. Problems may arise in manual procedures, which result in production delays and material waste.
As expected, ERP systems have powerful BOM management functions. Automated BOM creation and modification ensure that everyone in your team can access the most recent data. This makes the entire production process more efficient and eliminates discrepancies.
Assume that you work for an electronics company. With an ERP system, you can handle the BOMs for different smartphone models. This way, you can make sure that the right components are chosen for every assembly line and avoid costly production flaws.
#4: Accurate Cost Control
You may not be able to calculate the actual cost of production and set the best-selling price without efficient cost tracking. There are hidden costs that come with material waste, rework, downtimes, or production delays, and they can significantly reduce your profit margin.
ERP systems provide real-time tracking of job costs and product usage. This enables you to calculate costs accurately and identifies areas that need improvement. You can determine which products generate the highest ROI and tweak your pricing accordingly.
For instance, an ERP can be utilised in a clothing factory to monitor the labour, material, and administrative costs involved in each item of apparel. Using this data, the business may discover cost-saving options, like negotiating discounts in bulk with suppliers or simplifying production procedures.
#5: Enhanced Quality Management
It is important to maintain high-quality products, but manual quality inspections can be exhausting and prone to mistakes. Your teams may skip the flaws, which results in dissatisfied customers and possibly a product refund.
Quality control processes can be easily integrated into ERP solutions for manufacturing. This enables you to record violation data and set up inspection points at different production stages. This way, you can see trends and avoid quality problems before they arise using real-time data analysis.
Understand Your Production Performance Before Choosing an ERP
Think of a smooth production floor when integrating ERP solutions for manufacturing. However, thorough planning beforehand is important. Here are 4 key stages you should consider:
Our Last Words
Implementing ERP solutions for manufacturing can be challenging. However, with a well-prepared strategy and a reliable partner, it's possible to transform your production control and achieve manufacturing excellence.
Set sail with a trusted crew. You can collaborate with a certified ERP service provider who has the expertise and guidance to ensure your ERP journey is successful.
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