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Why More Manufacturers are Embracing ERPs

By October 3, 2017September 28th, 2018No Comments

As a manufacturer, you know that lower costs and higher efficiency are always your top goals, but saying it and doing it that are two different things altogether.

That is until the Enterprise Resource Planning (ERP) software came along.

For years, manufacturers hesitated to implement ERPs because they were concerned about security and control, but as time went on and technology began to evolve, many companies realized that in order to grow, they must be willing to change – and that meant embracing ERPs. In fact, according to the Aberdeen Group, 74 percent of ERP manufacturers use ERP solutions to plan and schedule resources for day-to-day operations.

Why have they embraced ERPs? Here are some of the biggest benefits and impacts:

Lower inventory levels

As a manufacturer, inventory costs and control are important. Without the proper process and system in place, your inventory can fluctuate, and your team can spend way too much time finding solutions and fixing problems. This leads to inventory inaccuracy, while using multiple numbers disconnected systems can negatively affect quality, costs, planning and time.

All of that is solved with an ERP. Best-in-class ERP implementations lower inventory levels by 22 percent because companies can better coordinate manufacturing with customer service, logistics and delivery. This yields lower inventory levels in reserve and greater cash flow.

Collaboration offers greater efficiency and internal controls

With everyone in your company able to access what he or she needs in one ERP system, the potential for growth skyrockets. This gives everyone one system to see everything going on, allowing everyone to look at data to make more informed decisions, while teams can collaborate to come up with ideas and innovation to spur growth.

Internal controls also improve. In fact, the Aberdeen Group reports that 96 percent of best-in-class ERP implementations meet manufacturing schedules because modern ERP solutions automatically notify decision makers when scheduled activities failed to occur on time in order to proactively address issues.

Lower costs

As a manufacturer, you know that your costs will make or break you. You’re always looking for ways to reduce costs, while improving efficiency for your customer. Look no further than an ERP.

Manufacturers with best-in-class ERP Implementations reduce operating costs by almost 20 percent due to their ability to streamline and accelerate processes to improve efficiency and productivity.

At the end of the day, your customers are happiest when their shipments are accurate correct and on time. That’s a huge benefit of an ERP. Less cost to grow and please your customers? Now, that’s a win-win solution!

Editor’s note: Portions of this article were taken from this Sage video.

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