The Crucial Role of ERP Systems in Manufacturing

Enterprise Resource Planning Systems are game changers in the commercial world. The crucial role they play in manufacturing cannot be exaggerated. On many occasions, ERPs have been defined as software with the capability of changing the statistics of your business or any business, from negative lines to positive lines, and that is a fact.

In a world where everyone is after success, ERPs have become crucial in ensuring that all businesses eventually have a solution, regardless of capital or obstacles presented even at startup stages. Currently, over 70% of large businesses like Amazon, Apple, and Tesla, make use of different ERP Systems for manufacturing their products, since there are plenty you can choose from.

These businesses have reported massive cash-in of profit, otherwise known as ROI, and less loss due to production, ever since the implementation of ERP in their respective organisations. The promise with ERPs such as Microsoft D365 BC is that they can enhance your business to yield more profit. The only challenge here is knowing the ERP System to use for your business, and how to use that ERP. Luckily for you, we also have that covered in this post. Read on.

How To Use ERP Systems For Manufacturing

ERP Systems can be complicated to an extent, but that complication is limited to the time before you become familiar with them. Using an ERP is very easy afterwards, and we’ll show you how.

Understand Your Business: You can use an ERP System to denote how much product your company can manufacture, and how many customers you can satisfy within a timeframe.

Inventory Management: An ERP System can also be used to optimise inventory levels. This includes keeping track of; Work in progress, Raw Materials, and even finished products.

Quality Control: You can also use an ERP System to ensure you maintain quality throughout your manufacturing. This will require you to define the quality parameters so that the ERP System will be effective.

SCM (Supply Chain Management): With an ERP System you can manage demands and supply. This will enable you to spend adequately on supply while satisfying larger consumers and maintaining spotless relationships with customers, and stakeholders.

Finance Management: An ERP System like Microsoft D365 BC can be used to manage your production expenses. This includes; Cost tracking and financial reporting. This will help you ensure that every penny serves its purpose.

Analytics and Reporting: Through the right ERP System, you can change your analytic game and be ahead of any possible obstacle that can affect your company’s manufacturing capabilities. You’ll also be able to keep track of your company’s performance in the local and international markets, while successfully meeting the demands of every customer, through the incomparable data-analysing capabilities of ERP Systems.

Categories Of ERP Systems

There are 3 main categories of ERP Systems, each with its unique capabilities. After understanding what type of ERP System your business needs to grow, you can settle for any of the 3 mentioned below.

Cloud-Based ERP Systems

Cloud-based ERP Systems reside in the cloud. Just like your Microsoft account, you’ll be able to store your company’s data there as well.

The advantage of Cloud-Based ERP Systems is that you’ll be able to surf through real-time data, optimise your ERP System and work with precise feedback.

However, the functionality of your ERP System might not be 100% since you will be relying on 3rd parties. The software will be hosted by a vendor and then provided to you at your request.

On-premise ERP Systems

On-premise ERP Systems are installed on your computer, so their usability and functionality are restricted to your organisation only.

You can easily personalise On-Premise ERP Systems to suit your company’s needs. This will give you precise data through personalised analysis, which will in turn affect the manufacturing capabilities of your company.

Data is also protected with On-Premise ERP Systems as access is restricted to the company’s computer it is installed on.

Hybrid ERP Systems

Think of a Hybrid ERP System as a combination of On-Premise ERP System, and Cloud Based ERP System.

Should you choose to work with a Hybrid ERP System; part of your company’s data will be accessible online, in the Cloud Based ERP System, while some parts will be on the On-Premise ERP System installed in your computer.

The Hybrid ERP System combines both the Cloud Based ERP and On-Premise ERP Systems to provide effective results that can positively affect the manufacturing capabilities of your company. Modern businesses often fall into this category of ERP Systems.

Major Difference Between On-Premise ERP Systems and Cloud-Based ERP Systems

The major difference between a Cloud-Based ERP System and an On-Premise ERP System is that, with an On-Premise ERP System, everything is restricted to the company’s computer where the ERP is installed. Also, you’ll always require the assistance of dedicated IT sources for maintenance. With On Cloud ERP Systems, you only need to focus on the growth of your company's manufacturing capabilities as your company’s provider handles every other technicality.

Conclusion - The Crucial Role of ERP Systems in Manufacturing

ERP Systems have been enhancing the manufacturing scale of large businesses, and from the look of things, more businesses will join the trend in no time. Regardless of which ERP System you decide to work with, rest assured that the success score of your business will improve since ERP Systems are effective.

Here at onpoint, we understand the modern needs of businesses that use ERPs like Microsoft D365 BC and we are ready to work with your team to get cost-effective solutions and profitable resource planning.