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ERP Implementation in Manufacturing Industry

What comes to your mind when you hear the word ‘manufacture’? Typically, most people think of a huge industrial organization filled with machinery. In general, manufactures are associated with a wide range of composite processes, ranging from production to management, that in complex guarantee the seamless work of the business. In fact, we cannot be any more clear concerning such a description. Yet, here appears another logical question: how is it possible to organize all of these processes in the right way? When outdated resource planning strategies frequently don’t provide desired results, ERP comes to help. At this point, some readers may ask: does ERP for manufacturing truly make sense? And we’re glad to answer: yes, yes, and yes again, it definitely makes sense. How? Read on, and we’ll show you.

Back to the Basics: ERP in Manufacturing and Everything in Between

ERP Software in Simple Terms

ERP is like an electronic locker where you put different folders. Each folder is a separate program module responsible for a particular process, for instance, CRM, accounting, recruitment, etc. All folders have locks, and the manager gives the keys (access) to those who need to work there. The advantage of such an electronic cabinet is that you can easily remove any module or add a new one if needed. Moreover, in Odoo, all the folders-modules are perfectly integrated with each other.

Such a system helps avoid repetitions and loss of essential data, significantly reduces the number of errors, enables conveniently monitoring the business, allows you to download statistics, clearly see what is causing the decrease in efficiency, etc. Nowadays, ERP systems are more flexible and affordable than ever. They are actively used in the service sector, retail, and logistics. Thus, even small businesses can benefit from ERP systems.

What is Manufacturing ERP?

To put it briefly, manufacturing ERP is a specific type of enterprise resource planning software aimed at helping companies whose primary functions relate to the manufacturing industry. Interestingly, the ERP system was initially created for manufacturing companies, which is why this resource planning system perfectly fits this industry.

In the field of manufacturing management, ERP systems, first of all, allow you to create a single information space for a comprehensive display of financial and economic activities. At the same time, access to the stored information is clearly delineated, and possible actions in the system depend on the team member’s access.

5 Major Advantages of ERP for Manufacturing Companies

Notably, an integrated manufacturing ERP system provides a multitude of financial and operational benefits at the micro and macro levels, so it’s even hard to mention all of them in one article. In the following paragraphs, we gathered the most significant advantages ERP may bring to the manufacturing industry.

1. Manufacturing ERP Software Increases Workers Productivity

In the modern business environment, many companies face problems with employee motivation. How to achieve better results and increase productivity? Although there are many approaches to this critical issue, not all of them truly work. Fortunately, with ERP software for the manufacturing industry, you have nothing to worry about. Thanks to the ERP system, manufacturers can streamline their workflow by automating different processes. Therefore, employees can spend less time finishing the same amount of work. As a result, due to optimizing operations for enhanced productivity, the efficiency of the whole manufacture undeniably increases.

2. Want to Improve Human Resource Operations Seamlessly? With ERP for Manufacturing, It’s Easier Than Ever

There is no doubt that human resource management (HRM) is an inseparable part of each company, so the manufacturing organization isn’t an exception. Due to ERP’s attendance and training tracking capabilities, it is possible to raise your manufacturing business to an entirely new level. By automating administration operations, your HR department can shift the focus from mundane paper-based tasks to the growth and constant development of your organization’s workforce.

3. The Better Analysis, the Faster Growth or How Manufacturing ERP System Can Streamline Your Way to Success

As we’ve already sorted out, manufacture is a huge organization that hosts multiple departments and services under one roof. Accordingly, each sector requires a particular system to manage reporting and operations. Nevertheless, with such a wide range of various systems that don’t even communicate with one another, is it possible to launch robust analytics across the whole organization? On the one hand, everything is possible when you spend a lot of time and resources. On the other hand, there is definitely no need to make a great effort because ERP has already made that for you. This system not only helps to capture real-time reporting that is quickly accessible but also enables managers to unify departments and compare metrics across the business more efficiently. What is more, manufacturing ERP allows centralizing operational and financial data for increased visibility.

4. Scalability as a Key Matter

Scalability is of paramount importance in the contemporary business environment. Nowadays, manufacturers are surrounded by countless challenges, think at least of a global pandemic. In such tricky circumstances, only those who are capable of adapting can stay afloat. Fortunately, by implementing an ERP solution for your business, you will join the cohort of those who didn’t fail and aren’t likely to fail at all. Thanks to ERP, you gain the ability to scale and adapt your organization with regard to any changes or disruptions in the industry.

5. Advancing Supply Chain, Inventory, and Transportation Management with Manufacturing ERP

An efficient job scheduling is a guarantee of proper supply chain management. Fortunately, supervisors can track resource involvement and consumption in ERP, streamlining manufacturing supply chain management. At the same time, an ERP solution that’s optimized for inventory management automates basic manufacturing operations so that stock organizing, purchasing, and transferring are correctly synchronized. ERP manufacturing software also helps control optimal stock levels by integrating the inventory requirements of workers, buyers, and suppliers. Furthermore, the system allows viewing orders, deliveries, and sales from a centralized location.

ERP & Warehouse Management: Why Odoo Is the Best Choice

At Smart Tek, we provide Odoo services that are customizable to fit any business according to its needs. Odoo delivers a comprehensive solution for diverse aspects of your organization, including manufacturing, CRM, 3-rd party integrations, e-commerce, sales, production, inventory to the warehouse management system, personnel, and marketing management, to mention just a few.

Correct management of warehouse stocks is the basis for the stable functioning and further development (scaling) of the company. The warehouse must ensure the uninterrupted operation of the sales department and the utilization of production capacities, the timely fulfillment of obligations to customers. Suppose you assign the responsibility for maintaining optimal stocks in the warehouse to a person (supplier). In that case, errors and delays are inevitable. The human factor cannot be taken away, which leads to a drop in the company’s authority in customers’ eyes to the loss of trust of large customers.

Therefore, the right decision for a manager is to implement a warehouse management system. Here appears the logical question: which one is the best for the manufacturing industry? Of course, it’s Odoo. In this block, we will briefly describe the main features of the Odoo ERP system for warehouse management. The main advantage of this system is that the WMS functionality is tightly integrated with other parts of the system, including sales, purchases, production, etc. If Odoo is configured correctly, it can automate most routine operations, excluding human errors.

The principal features of Odoo in the warehouse management:

  • The warehouse in Odoo is tightly integrated with all parts of the system.
  • It’s possible to create and manage an unlimited number of warehouses.
  • You can create an unlimited number of storage locations at each warehouse.
  • Arrival and shipment in one, two, or three stages — stages of quality control, packaging are added. It is possible to set up more specific receiving or shipping.
  • Warehouse replenishment can be carried out along different routes — by purchasing from suppliers, own production, and moving goods from another warehouse. Replenishment from another warehouse is convenient to use if you have, for example, several retail outlets that are replenished from one common warehouse.
  • You can set up more complex rules for moving goods through warehouses, depending on your manufacturing processes.
  • For each product, it is possible to configure the rules of minimum balances — as soon as the quantity of the product falls below the minimum level, a replenishment mechanism will be launched based on the routes of receipt of this product or warehouse.
  • Manufacturers can launch accounting for serial numbers of goods, packaging, and branches with expiration dates.
  • Advanced reporting is also included.

Best ERP for Manufacturing: We Will Help You Choose the One

Nowadays, there is a wide range of different available ERP types and deployment options. However, which one will suit your business? Let’s explore together.

  • An on-premise ERP system provides control, support, and ownership once implemented. This option also involves the cost and risk associated with maintaining hardware and system infrastructure for manufacturers.
  • A cloud-based ERP system offers a complex but flexible system with constant support, updates, training, and flexible customization.
  • Hybrid ERP combines on-premise and cloud-based hosting and deployment services for a manufacturing organization. These models enable ERP users to migrate between various delivery models or integrate advantages not feasible in current implementations.

When is Your Organization Ready for Manufacturing ERP Software?

ERP solutions will undeniably benefit each manufacturer. However, are there any critical signs that indicate you need to implement a manufacturing ERP solution right now? We defined 4 key factors to consider:

  1. If your current manufacturing system & processes don’t show the desired result or function inefficiently.
  2. If your company is stuck at a particular level, changes are implemented slowly, and you don’t notice any growth.
  3. If there is a lack of current security requirements to mitigate risk.
  4. If identifying broken processes and finding areas of improvement are crucial to the development of your organization.

What Aspects Determine the Cost of Manufacturing ERP?

There are a lot of parameters that affect the price of an ERP solution, so let’s mention the main ones.

Customization Level

Everything is obvious here: the more hours of business analysis and development are required, the more the final system will differ from its “boxed” version — the higher its cost will be. But right off the bat, without a preliminary study of the company and writing a detailed technical specification, it’s simply impossible to estimate the number of necessary changes.

ERP System Testing

If the project is small, and we are not far from a boxed solution (customization is about 20-30%), you can go without automatic tests — and test the system with the help of the customer and the project analyst. This will save some budget.

For an ERP system with a high level of customization, this option is not suitable. It will take a lot of time to write automated tests — which will immediately increase the project’s cost. Yet, in this case, you will definitely get a top-quality solution.

The Team That Will Be Involved in the Implementation

Here we are talking about the team’s experience (both Junior and Middle or Senior analysts and developers can be involved in the analysis and development) and its size. Do you need a simple project with one business analyst and one developer involved in? Or a complex, large-scale system that will require the entanglement of a large team of business analysts and developers, as well as testers, designers, project managers? Everything depends on the type and complexity of your ERP solution, but the larger team you hire, the higher price will be.

Wrapping Up

In conclusion, a manufacturing ERP system for manufacturing streamlines operations. It provides support, mitigates risks, provides better customer service, and as a result, helps manufacturers grow the organization and boost revenue while enhancing quality.

Are you looking for an industry-specific, zero-risks, cost-effective, and leading-edge ERP system for the manufacturing industry?

Then, you’re at the right place and at the right time. Just drop us a line below and make the first step towards ERP, a world of endless possibilities.

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