The manufacturing industry continues to grow and intensify with each year, presenting manufacturers with sets of opportunities and challenges. To keep up with competitors, manufacturing companies are turning to newer Enterprise Resource Planning (ERP) systems as key differentiators—helping optimize processes, bolster efficiency and uphold market dominance. However, achieving this is no easy task, because ERP implementation requires careful planning, strategic decision-making and adherence to best practices.
This article will look at:
- The importance of ERP systems in the manufacturing industry
- Best practices for implementing manufacturing ERP systems
7 Deadly Sins of ERP Implementation
Some mistakes are the result of process-oriented or people-centric choices – and are easily avoided. These are The Seven Deadly Sins of ERP Implementation.
The Importance of ERP Systems in the Manufacturing Industry
The manufacturing industry is competitive in nature, and ERP systems are crucial for companies in this sector. ERP integration with your core business processes brings the following expected benefits to your organization:
1. Continuity in a Fast-Changing Marketplace
The manufacturing sector is constantly experiencing new technologies, regulations, consumer expectations and economic factors that reshape business as usual. Competitive manufacturing companies keep up with these changes by utilizing manufacturing ERP systems. This software allows your organization to manage different core business functions seamlessly, such as supply chain management, production planning and scheduling, inventory control, quality control and customer relationship management.
ERP systems allow your company to centralize data—such as sales data, inventory data, financial data and processes from different departments—into one integrated system, allowing you to have real-time visibility and control over your entire business. This gives your leadership team information needed to make adjustments to production schedules, inventory levels and supply chain processes.
Furthermore, automated workflows reduce disruptions caused by staff turnover. An ERP system gives your company the freedom to focus on innovation and meeting your customers’ needs instead of grappling with constant marketplace shifts.
“When ERP software is running well and closely aligned with your organization's ways of doing business, it makes important business processes function more smoothly and opens up new possibilities, such as redeploying workers or implementing an omnichannel e-commerce strategy.”
2. Increased Productivity
Through ERP systems, your business is able to optimize key processes, bringing greater productivity and efficiency. A new system will have role-based dashboards, giving your employees access to information they need to effectively perform their core duties. Furthermore, repetitive and time-consuming processes are eliminated with automated reporting functionality, boosting data accuracy.
ERP solutions also have features such as production planning, forecasting and scheduling coordinated with supply chain and inventory management. These features result in leaner production with reduced costs.
Your organization is also empowered to identify process bottlenecks and inefficiencies—through ERP systems— addressing these issues promptly. With ERP capabilities, your company maximizes the use of labor, machines and materials.
3. Keeping Up with Competitors
Analytical capabilities and data transparency features available in ERP systems provide your organization with actionable insights that are key to staying competitive. With role-based reporting and real-time operational analytics, your business can spot problems as soon as they occur.
By using data provided by ERP systems, your company can make critical business decisions, such as entering new markets, adding products or customers and initiating mergers and acquisitions. An ERP system also offers your firm a single source of truth, allowing you to rapidly adapt to market demands and trends.
With the right software and a successful ERP implementation, your company can maximize productivity and experience continued success despite any challenges.
Best Practices for Implementing Manufacturing ERP Systems
An ERP implementation project is a complex and multifaceted undertaking that requires significant organizational resources, careful planning, effective change management and the right technology selection.
For a successful new ERP system implementation, consider the following manufacturing ERP best practices:
1. Outline Your Business Justification
Clearly outlining your business goals and objectives before you start your ERP implementation project is essential because it helps reveal the pain points in your company. At this point, take time to assess your existing systems and workflows, and identify any areas that need improvement.
The following key questions can help you achieve this goal:
- What value does my business provide to customers?
- What processes need enhancement to deliver that value?
- What are our Key Performance Indicators (KPIs)?
A clear business justification ensures that your ERP implementation is aligned with your strategic objectives. This sets the stage for a successful implementation of your ERP software.
“The first and the most crucial step for your ERP project is defining your goals and objectives to understand your current position and desired destination. This paves the way for your organization to understand the best way to get there.”
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2. Identify and Focus on the Business Processes
Having a thorough understanding of your business processes is the bedrock for successful ERP implementations. Mapping out and evaluating your current business processes allows you to identify areas for improvement and determine how an ERP system can directly impact and enhance these best practices.
Manufacturing ERP systems encompass a wide range of core processes such as:
- Production & planning
- Inventory & procurement
- Quality & cost control
- Finance
- Sales & marketing
- Human resources
Focusing on your business processes and selecting an ERP solution that best suits your needs helps ensure a seamless integration and optimal utilization of the system.
3. Staff Your Internal Project Team with the Right People
A successful ERP implementation project is also dependent on building the right internal ERP project team. This team should be made up of executive suite sponsors and key business process leads who have the necessary technical background and knowledge of your organization’s data and culture. The team members you choose must be process-oriented, excellent communicators, open to change and strategic to achieving your goals.
The project team plays a significant role in an ERP implementation:
- Guiding the implementation process
- Ensuring proper buy-in from stakeholders
- Facilitating user adoption
This internal ERP project team’s expertise and commitment are essential for driving the project forward and overcoming any challenges that may arise along the way.
4. Select an ERP Solution that Best Suits Your Business
The ERP market has many options to choose from, which may be overwhelming. However, it is crucial that the ERP system you choose aligns with your business requirements and budget.
Broadly, ERP systems come in two forms—cloud-based or on-premise. When compared to on-premise systems, cloud-based solutions offer improved security, accessibility and scalability.
When researching solutions, core aspects to consider include:
- Integration capabilities to connect seamlessly with your tech stack
- Functionality to streamline essential processes
- Usability for employee adoption
- Vendor reputation for reliability and support
Finding an ERP software that integrates seamlessly with your existing systems, helps streamline processes and provides the necessary functionality for your various business functions helps ensure a successful implementation.
“There are literally thousands of decisions that must be made on these projects. The project team must be empowered to make most of them. That is one reason organizations must put their best people on these teams.”
5. Select the Right Methodology and Proper Project Governance
Your ERP deployment success also highly depends on the implementation methodology and project governance. The right methodology will depend on the following factors:
- Budget constraints
- Internal resources
- Timeframe
- Integration capabilities
Full-service implementation and quick-start implementation are the two common methodologies used in most ERP implementations. If your organization has limited internal resources and complex business footprints, then a full-service implementation would be the recommended methodology. Full-service implementation requires your business to partner with an experienced ERP implementation partner, such as Ultra Consultants, to guide you through the entire process.
A quick-start implementation is suitable for businesses that have internal resources capable of handling the technical aspects of the ERP implementation. These businesses have established enterprise processes or a legacy ERP system in place.
The methodology you choose won’t make a difference if your business does not have proper project management in place. For the project team:
- Establish clear roles and responsibilities
- Define project milestones
- Ensure effective communication and collaboration among team members
The right methodology combined with a proper project management team and implementation partner ensures that the implementation process is streamlined and ensures a smooth transition to the new ERP system.
6. Partner with an ERP Consultant
Partnering with an ERP consultant such as Ultra Consultants significantly boosts your chances of a successful ERP implementation. ERP consultants have the expertise and knowledge to help your business select the right-fit ERP solution that addresses each of your specific needs. Furthermore, they help with implementing the system, migrating your data to the new system and providing ongoing support to facilitate long-term employee adoption.
When you collaborate with an independent ERP partner, you get the benefit of someone who puts a priority on your business outcomes rather than pushes a specific ERP solution for sales commissions. This implementation partner should be able to:
- Customize the ERP system based on your existing workflows and processes
- Provide employee training and support
- Help you make informed decisions throughout the selection and implementation process
An independent and experienced partner helps your business mitigate risks that might arise during the ERP implementation process and also fast tracks the process, helping you maximize the benefits of the new ERP system.
Conclusion
The implementation of Enterprise Resource Planning (ERP) software in manufacturing requires careful planning, thoughtful decision-making and best practices for execution. However, businesses need not navigate this complex process alone. As an impartial consulting firm focused solely on client needs, Ultra Consultants provides customized guidance through every stage of ERP adoption.
Our consultative approach prioritizes configuring core functionalities to match each of your unique operations and objectives. Furthermore, our change management leadership facilitates smooth transitions that drive user adoption and maximize return on investment. With decades of accumulated expertise but no allegiances to vendors, Ultra Consultants recommends optimal solutions based entirely on suitability to your individual requirements and priorities.
We recognize that no two manufacturers are identical. So, whether acting as project manager during ERP implementation rollout or trusted advisor beforehand, our role is to understand the nuances of your workflows, culture and goals to deliver the maximum benefits of the right ERP system with best practices. Our platform-agnostic insights on selection, implementation and value realization enable manufacturing enterprises to achieve greater efficiency, insights and competitive advantage.
Get started on your project, implementing manufacturing ERP software, with expert guidance from Ultra Consultants. Request your free discovery call today.
