In our latest instalment of guides to ERP for business leaders, we’re looking at how ERP software can make life easier for you as an operations director. In today’s market, for a busy ops director, it’s all about balancing internal efficiency and cost-effectiveness with exceptional service and maximum personalisation for your customers. And it’s no mean feat – especially if you’re an SME up against a massive multi-national conglomerate who have mastered their supply chain.
But regardless of the size of your business, the right ERP software, carefully mapped to your business processes, can bring some pretty significant benefits to operations – from a helicopter view of the supply chain to granular detail on a component.
Pursue the lean supply chain
Lean supply chain management is all about eliminating waste and pesky non-value-added activities in your processes. The leaner your supply chain, the faster and cheaper your business can deliver products and services to your customers. The lean supply chain can help drive manufacturing methods such as Kanban, or JIT (just-in-time) production, which is particularly useful and prominent in the automotive sector.
ERP software can not only help you quickly and easily identify value-add and non-value-add activities quickly and easily, it also gives you the tools to enact change and eliminate wasteful processes. With a complete and connected view of every stage of the supply chain, you can see straight away which areas are taking up valuable time, money or materials. Once you’ve identified these problem areas, you can then automate and streamline processes where necessary to achieve better efficiency and increase profitability, without compromising on customer experience.
ERP also gives you the ability to track serial numbers, multi-location stock transfers, and distribute tailored picking instructions in order to improve your warehouse operations, ensuring that your internal processes are not a key sticking point in the supply chain.
Deliver complexity, simply
As we mentioned in the introduction; whatever the size of your organisation, it’s all about balancing customisation and standardisation. Whether you’re a discrete manufacturer or a services business, too much customisation can lead to inefficiencies and high overheads; too little can lead to diminished customer satisfaction and in the worst-case, lost business.
A key area where the right ERP software can help in this area, particularly in manufacturing, is with the reduction of unnecessary inventory. Offering a wide range of product SKUs can lead to the accumulation of large volumes of inventory, which in addition to tying up cash must be stored and maintained. ERP software can help you identify slow-moving inventory and reduce its time gathering dust by finding ways to innovate and deliver individualised services and products. In addition to innovating, you could also work collaboratively with sales management and marketing to drive special offers and warehouse clearances that address your surplus in inventory It can help you ensure that only useful product is regularly stocked, and reduce that which doesn’t sell.
ERP enables better communication and collaboration between different business functions as well external partners, which unlocks the capability to work through complex, multi-function and multi-location processes like this more quickly and cost-effectively.
In pursuit of the hallowed lean supply chain, a massive contributing factor is quality. The more products you can get off the line with no issues, the more efficient and cost-effective your business will be. The challenge, as always, is finding a way to ensure consistency without compromising on time and budget.
ERP can help you a number of ways here:
- Manage variations – The fact that we’re not living in a simulation means that no two production situations are identical. Variations in many factors including temperature, humidity, ventilation and pressure can have a massive effect on product quality. ERP systems can give you a helping hand here by facilitating real-time equipment monitoring and analysis, coupled with alerts to help you take corrective actions and ensure a more consistent environment.
- Procedure implementation – Quality means consistency. An ERP system gives you the ability to ensure that processes, whether automated or not, are strictly followed during production.
- Data accuracy – ERP software gives you access to real-time, accurate data synchronised from across the business to ensure you’re meeting quality criteria and standards.
- Document management – Many ERP systems (including Epicor) come with a document management module. This enables you to manage, maintain and retrieve a wide range of content, as well as attach it to projects and reports to give more insight into specifications, BOMs, formulas, etc.
We’ve said it before, and we’ll say it again – an ERP implementation alone will not help you realise the benefits we’ve detailed above. You must have the business processes in place, carefully mapped to your ERP software, in order to see improvements in your productivity and your profitability. An ERP implementation built on out of shape business processes is like a house built on bad foundations – it’s only a matter of time before it all falls down. Remember our mantra – start with the process. You won’t go far wrong.