Friday, February 15, 2019

ERP System and Manufacturing Industry

In today's highly competitive world it is essential for every organization to have a good erp software for manufacturing that will manage all their business process efficiently. Keeping this in mind every major organization has decided to use a popular tool that has evolved over the past few decades. Enterprises Resource Planning (ERP), the descendant of MRP II offers the answer to the economic and productivity troubles of manufacturing and service enterprises. Thus, the ERP system has become very popular as an enterprise management software tool.

Businesses all around the world are increasing their reliance on ERP systems as a cost efficient alternative to their software applications. An ERP system provides organizations, especially industries like manufacturing, with a solid foundation, incorporating all of the fundamental aspects of running a business. Expectations run high when an organization deploys an ERP package - if the solution is a good fit for the company, the company stands to gain tremendous cost savings and service improvements across the enterprise.

ERP in Manufacturing Industry

In the earlier days ERP system was largely used only by the manufacturing industry and a wrong assumption was carried over that the system is made for only Manufacturing industry. It was basically due to the way in which ERP was historically developed from the methods of Material Requirement Planning (MRP) and Manufacturing Resource Planning (MRP II), which are relevant to manufacturing organizations. In the manufacturing industry, MRP became the fundamental concept of production management and control. At this stage BoM (Bill of Materials), which is purchase order management that utilizes parts list management and parts development, was the prevailing trend.

ERP is for all industries

The large organizations have wide resource to manage. Handling massive volume of resources using the various software applications or with the help of legacy systems is something that these organizations never succeeded. It was necessary to find a suitable solution that will help them manage their business in more effective manner. These organizations have found solace in the ERP system which in all manner what they were wanted for. The term ERP originally referred to how large organization planned to use organizational wide resources.

Initially ERP systems were used in more large industrial types of companies. However, the use of ERP has changed and is extremely comprehensive. Today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small.

ERP models and functional methods

Over the years like any other technology system ERP also upgraded with timely changes that could help organizations technically and economically. Today organizations have the option to choose from On-the premises ERP system, Web-based system, Cloud-based with SaaS model system in the market.

Whatever the models are, the basic usage, functions and objectives of the ERP systems remains almost the same. The system uses a single database, where most information is entered once and only once. Since the data is available on-line and in real-time basis virtually all the organizational users have access to the same information for planning and control purposes. This can facilitate more consistent planning and control, in contrast to legacy system.

One system that can make all the difference in your manufacturing business

ERP systems developed for manufacturing industry can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, can now fit under one umbrella

ERP Advantage

• Integrate the organization's activities
• Force the use of 'best practices'
• Enable organizational standardization
• Eliminate information asymmetries
• Provide on-line and real-time information
• Facilitate intra-organization communication
• Enable inter-organization collaboration

ERP and e-business

With the advent of e-Business, companies are utilizing the facility in the Internet to make connections with their suppliers, customers and trading partners. This shifts emphasis from the traditional internal focus of the ERP system to a web-based ERP application, increasing the importance of both Business-to-Business and front-office applications.

Looking at the whole scenario it is imperative that ERP systems are making tremendous impact on global business landscape. Every major manufacturing organization has implemented the system to remain competitive and leverage their information assets across the entire enterprise. The ERP packages promise to provide the required enterprise-wide backbone.

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  3. A bill of materials is critical for brick-and-mortar manufacturers. The production of physical products is still one area of business that’s relatively untouched by the march to digitalization and working in the cloud.
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