In the age of digitisation, if you are still tracking your tasks on spreadsheets, it’s time to make a change.
We all know that, at times, even the best products fail because of poor management. Thus, handling business operations from accounting to inventory management calls for expert intervention from digital tools, like ERP systems or MRP software. This article explains what ERP is, how manufacturing businesses can benefit from it, and what particular problems it solves.
What is ERP?
ERP is the most used software in the business arena. ERP stands for Enterprise Resource Planning and it is designed to solve most complex business problems.
ERP is not a modern-day invention; it has been around for more than five decades.ERP history started with material requirements planning (MRP) systems in the 1960s, when J.I. Case, a manufacturer of tractor and construction machinery, worked with IBM to develop the first MRP system. The technology was limited to large companies with significant budgets dedicated to the implementation of such systems. Oracle and JD Edwards decided to make this software accessible to more businesses.
By 1990, the term “enterprise resource planning” was coined and recognized that many businesses—not just manufacturing— could use this technology to optimize efficiency.
What is the purpose of an ERP solution?
When every department within a company uses a different software, coordination becomes an issue. The flow of information from one department to another is restricted and units function as independently, without a unified goal. This situation can be easily handled with the help of an ERP system.
The foremost objective of the system is to integrate the tools used in a facility, creating a unified system that
could hold the critical information.
What are major issues that an ERP software can solve?
The list of issues that an ERP can solve is quite long, but in this article, we will cover the 5 biggest issues that are universally applicable to all businesses.
1. Filter out the communication challenges
Although there are multiple departments in an organisation, the real success of a business lies in unity. When every department works towards a single goal, growth is guaranteed. The ERP software gathers all information and makes it available in real time to every department.
2. Reduces Manual dependency
ERP replaced spreadsheets with digitised data entry solutions. The load of maintaining data manually is not only tiresome, but also filled with errors. ERP systems help with maintaining data, tracking tasks, and automating processes, but also organising the work in an effective manner.
3. Establish better customer relations
An important objective of every business is to build strong relationships with customers. To keep customers satisfied, it is important to open a direct channel of communication between the organisation and the customers. The ERP software allows employees to track feedback, preferences, and order history. Based on this data, brands can offer their loyal customers better service and tailored service.
4. Establish financial stability
Transparency in financial dealings creates stability. The ERP stores detailed information about orders, purchases, production, procurement, repair, delivery, and many other expenses. Based on this data, companies can conduct a transparent audit and make necessary corrections.
5. Better decision making
So far, we have learnt that ERP brings better communication, transparency, and better visibility of data. With these added benefits, informed decision making becomes quick, easy, and effective.
Final Thoughts
ERP is a perfect partner for every enterprise. If chosen and implemented properly, the software can change your business for the better in a short time span. Be it manufacturing or any other business, an ERP system is designed to help you run your business smoothly and improve your productivity rate.
