17 Dec How does ERP software work in the Manufacturing Industry?
The manufacturing industry has developed as one of the high growth sectors of the nation and it contributes 20% to the national GDP. Country Like India, U.S., China, Russia, Germany manufacturing industry acts as a driving force of respective nation economics.
From when Make in India came into account, it is said that by 2022 the manufacturing sector increase share to GDP of a nation to 25%.
Source: IBEF
In this article, we will see
1. Traditional Business process in Manufacturing Industry.
2. What is ERP software and Why ERP software is important?
3. How does ERP software work in the Manufacturing Industry?
So, let’s get started.
From the above content, you must have got an idea of why Integration of technology has become the topmost priority of any manufacturing industrialist. Technology that increases efficiency, increase accuracy, transparency, and strategic movement to meet the target and survive among its competitors.
Technology which is designed as per these requirements is named as ERP. Enterprise Resource Planning.
Let’s take a moment, to understand the what traditional process that every manufacturing Industrialist is following till the date.
Traditional Business process in Manufacturing Industry
Any organisation consists of many departments, having numbers of manpower to process any project smoothly. As in, the Sales department, Inventory Department, Manufacturing Department, Finance department and many others. Before ERP, how things are going on, we will see in this content.
Let’s say a Customer “A” reached to a Sales Department of an industry for a certain product. Now Sales department take a piece of information on the availability of that product to the Inventory Department.
If the product is available, then it will be delivered to the customer followed by the sales department. If in any case the Inventory department shows non-availability of that product then the Sales department approach to the Production department and ask to manufacture the product.
At the same time, the Inventory Department confirm the raw- material to the production department. If the production department has the raw material, then it commands to Shop Floor Execution to start manufacturing.
If NOT then the process proceeds to the Finance Department to buy raw material. Now Finance department contact Supplier and get raw material. Now supplier supply raw material to the Production department and further production department ask Shop Floor execution department to start manufacturing and the final product will be delivered to Customer, Followed by the Sales Department.
Well, It too complicated Right. Let also have a look at the major problem of having a traditional Business process.
1. Time and money consuming
2. Chance of false data
3. Trust issue with customers
4. High Inventory Cost
5. Transparency Issue.
Hence, it’s a demand for time and to stand out from a highly competitive atmosphere. Your Industry needs technology that helps you to overcome these issues and also help you to expand your business.
What is Enterprise Resource planning?
As we know, the business has many departments and they exchange a lot of information with each other. This process consumes too much of productive time. To solve all these, industries should implement a technology called ERP.
Enterprise resource planning (ERP) is the integrated management of the main business processes, often in real-time and mediated by software and technology.
Enterprise Resource Planning is an all in one business application.
Source: Wiki
How does ERP software work in the Manufacturing Industry?
Any big organisation or in a way to expand the organisation, every department should have complete details of what is happening in the organisation. Like what new product to launch, what raw material will be needed, have proper manpower, have sufficient demand-in products to supply and many more. In other terms, it’s called transparency. Every organisation must have a transparent system.
Here, ERP software, which is designed as per the need or requirement of the company. Like some company need SAP and some need other ERP software.
Basically, In ERP when one data is updated, it updates all the other department on the same. Now a different department generates different reports on the updated data. It means that every department can be well pre-planned for the next project.
Let’s us also understand it with a scenario.
A product comes into your organisation. Might be it’s a raw material or maybe a new product. So, once it confirms. This information will be updated on ERP software. Now the same information will be updated by the Finance department in terms of value. Human resource department updates the same in terms of manpower. Production department generates a report on raw material to manufacture the same product. Supply chain Manager comes to know what all products need to manufacture the same product and ensure the availability of all required product with a different department. Each department creates its report and update on ERP software that help to inter-linked with another department. This brings transparency to the organisation. And ultimately a given task will be completed before or on the deadline.
Conclusion
While Concluding ERP software in the manufacturing industry, let me give you the major reason for adopting ERP that will prove a revolution to your organisation.
1. Integrate Financial information.
2. Reduce warehouse Inventory Cost
3. Increase Operation process
4. Standardise Human Resource information.
5. Integrate customer order information.
Comment down Let Walkter Beacon Lab know about your next step and what you think “How ERP software going to help you to expand your organisation”. We would love to assist your organisation with our ERP Software.
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