Benefits of an Integrated Manufacturing ERP Software System
If you’re in manufacturing, your money is made on the shop floor. Most manufacturers already know that.
Even still, we’ve come across plenty of companies running their operation with basic accounting software that wasn’t designed for manufacturing – or that’s duct taped to a stand-alone database and collection of spreadsheets that are being used to manage the shop floor.
But there’s a better way – in this article, we’ll explain what integrated manufacturing ERP software does and the undeniable benefits that the right technology can bring to your workflow, processes, and profits.
Product Costing
Simply put, you have to know your costs.
If your software can’t provide a detailed breakdown of material, labor, services, and overhead, you’re flying blind and probably headed for disaster.
Any good manufacturing system provides fully functional product costing and detailed bill of materials that track the components and miscellaneous charges that make up your finished items and assemblies. You also get accurate insightful reports detailed bill structures, component requirements, and production history.
Material Planning
Manufacturing software helps you determine what (and when) to make and buy. It also provides tools that help you figure out how much material to stock on-hand so it’s available when needed.
Built-in Material Requirements Planning (MRP) functionality ensures that you have sufficient material on hand at all times. It simplifies work processes, eliminates purchasing and scheduling problems, and allows purchasing and production managers to plan with insight.
MRP accomplishes this objective by analyzing supply and demand based on open sales, projections, inventory stock levels, and open purchase orders in your integrated manufacturing software. When you combine this essential data with product build times and lead times, you can generate reports that advise the purchasing manager of orders that need to be placed, revised, or canceled.
Job Tracking
It’s critical that at any given time, you’re able to quickly figure out where your jobs stand. It’s hard to deliver on-time if you can’t track the progress of your jobs and maybe increase throughput or make other adjustments on-the-fly when needed.
Work Order functionality is the cornerstone of any good manufacturing software system. With the ability to issue work orders, develop schedules, and track costs, you’re able to maintain complete control over your jobs and the entire manufacturing process. Perhaps most importantly, detailed work order reports keep you informed with up-to-the-minute, work-in-process information.
When used in conjunction with built-in Bill of Materials functionality, all of the required paperwork to move the job through the shop can be generated from each work order, including travelers, dispatch sheets, and operations tickets.
A Single Source of the Truth
A critical aspect that’s easy to overlook is the fact that good manufacturing software ties your business together in one integrated system. Take MRP, for example, that’s relying on data from several integrated components from sales and purchasing to production and inventory in order to produce meaningful insight that helps you make the right decisions.
When you’re using spreadsheets and department-specific databases that “bolt on” to a basic accounting package, it’s difficult (if not impossible) to generate the reports and insight you need.
Beyond reporting and visibility, an integrated manufacturing ERP system also creates process efficiency and better labor utilization that goes straight to your bottom line. That’s because everything is managed in one single system from orders, purchases, and accounting to materials, inventory, and production. That eliminates the inefficiency and errors that often result from duplicate data entry and inaccurate reports that come from disconnected software systems and spreadsheets that are glued together.
Conclusion
Many manufacturers started their business using basic accounting software like QuickBooks. When you’re small or just starting out, your processes are often simple enough to manage manually because you can just walk out onto the shop floor and quickly get a good feel for what’s going on. For those businesses with simple processes, a full-featured manufacturing ERP system might be overkill.
But many manufacturers reach a point where they’ve grown and operations have become so complex that one or two employees simply can’t keep track of everything that’s happening on the shop floor.
That’s when you need manufacturing software.
No two manufacturers are alike. And while the sheer number of manufacturing applications and features that are available can be staggering, we think it’s helpful to focus primarily on the essential functionality for product costing, material planning, job tracking, and integration. Because that’s what good manufacturing software does!
If you’re outgrowing your basic accounting software and would like to look into integrated manufacturing software, please contact DWD for a free software needs assessment.
