ERP systems are a valuable addition to any manufacturing company. From discrete manufacturers to process manufacturers, there are a large number of benefits to be gained from implementing a new ERP solution into your business. While software, hardware and other miscellaneous costs may seem formidable, ERP systems aim to save your business money in the long-term by streamlining processes. In addition, they can help to reduce inventory shrinkage, labor costs and cost of goods sold by improving purchasing practices.
Each type of manufacturer has specific needs, but generally speaking, those companies working within the manufacturing field have a number of similarities. To ensure that your new ERP system is beneficial to your company, all manufacturers should be wary of reasons why ERP systems fail.
- A faulty inventory item number scheme
When products are exchanged between suppliers and manufacturers, inventory numbers tend to be duplicated or operate on different systems. With different numbers and identification methods for each product, companies may reorder a new inventory supply when, in fact, it was simply numbered in a way that it was not picked up in the system. With multiple suppliers, these coordination efforts become even more complex. When purchasing a new ERP system, be sure that it maintains a cross-reference between your internal numbering system and each supplier’s system.
- Inaccurate inventory on hand
One of the benefits of integrating your systems is that redundancies are eliminated across all areas of the business. One of the downsides is that an error is automatically compounded. An inventory mistake in the beginning of the manufacturing process will continue to repeat itself throughout the system. ERP systems that offer “net-change” physical inventory functions can make it easy to correct stock counts without having to stop production to do a physical inventory count.
- Lack of coordination between engineering and manufacturing
An ERP system cannot help your company achieve its goals if the objectives set forth by different departments are diverse. By working together before implementing a new solution, all departments can be sure their needs are plausible and can be met. Working with a consultant can help develop a thorough implementation plan to appease all stakeholders before software installation begins.
- Unrealistic expectations
Even if all departments of your business are on the same page as far as objectives and goals you want the ERP system to achieve, they need to remain within a realistic scope. It is important to balance what you need the solution to do with what it can actually do. Start by making a list of functions that are essential and adding a few “would be nice” items. When shopping for systems, you can then line up the specific functions you need with what each system offers.
When purchasing an ERP system for your manufacturing company, it is equally important to know what not to do in addition to what you should do. By identifying these implementation mistakes, your company can make efficient strides towards streamlining processes and saving money.
If you’re not sure what steps to take (or not take), then feel free to get in touch for a consultation before moving forward; we can point you in the right direction.