What Every Manufacturer Needs to Know about ERP

Aug. 17, 2016
Once you understand why, you can completely transform how you run your manufacturing business for the better. Discover the 'why' by reading more.

Enterprise resource planning (ERP) software should make running your manufacturing business easier. At its best, an ERP gives you visibility, efficiency, and increased profitability. Unfortunately, the reality for many manufacturers is ineffective ERP systems only increase complexity, cripple decision-making, and can bring business to a grinding halt.

Because of this, many manufacturers limp along with their existing ERP believing there is no alternative. Too much time and money has been invested so they’ve got to make it work—even when it’s evident that things are not working. What you might not know is all ERP systems are not created equal. Once you understand why, you can completely transform how you run your manufacturing business for the better.

The Pains: ERP Systems That Barely Allow You to Survive

Is ERP just too complex, too inflexible, and too expensive to meet the needs of a modern manufacturing business? The answer is it depends on where you want to put your money and resources.

Legacy ERP systems, those that require your IT organization to manage and maintain in-house, typically incur 20 percent higher support costs. Your company must invest in a datacenter with powerful servers to run this system. You also need to recruit, hire, and train system administrators who are going to program, run, and maintain the system. There might also be middleware required to operate on top of a database management system.

In a 2016 survey, 66 percent of manufacturers use multiple ERP systems and 25 percent using ERP reported a high level of automation. Figuring out how to make all these systems work together becomes more than a full-time endeavor, and more customization adds more layers of complexity. In the end, you’re left with poor visibility and too many manual processes that bog down your business.

The Gains: A Single, Cloud-Based ERP Helps You Thrive

Adjusting your strategy to embrace the cloud can alleviate most of your pains. A true cloud ERP system is delivered over the web so there is no hardware to buy, no software to maintain. You focus on your manufacturing business and the ERP vendor handles all the IT issues, giving you a single system that centralizes all data and processes. Other gains experienced by today’s modern manufacturers who rely on a cloud-based ERP to run their business include:

Wolverine Advanced Materials, a global supplier of vibration damping reduced personnel spending, going from two shifts of 70 people down to one shift of 30 people.  

Aaron Thomas Company, a packing manufacturer and full-service contract packaging company, achieved 80 percent revenue growth and executes mock recalls in seven minutes.

Ralco Industries, Inc., an automotive supplier specializing in precision welded assemblies, metal stamping, design, tooling, and prototyping, reduced on-hand inventory by 15 percent.

Fluid Routing Systems, Inc., manufacturer of highly-engineered fuel management systems and hose extrusion products for the automotive industry, gained better visibility into account reconciliations—a process that once required days to complete now takes only minutes.

Caltherm, manufacturer of thermal and pressure control technologies, improved accuracy on inventory and quality labeling leading to 100 percent accurate shipping.

Before the cloud, manufacturers had no choice—on-premise ERP was the only way. Smart manufacturers today no longer have to divert time, resources, and money to managing and maintaining their ERP. They rely on a single version of the truth to run their business so they can focus on innovation and delivering on customer demand.  

Is your business thriving or surviving? See how a manufacturing cloud ERP can help you thrive, download the white paper: Manufacturing in Turbulent Times.

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