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Manufacturers Rethink How To Use ERP Systems

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supply chain and manufacturing

Today, the numerous business challenges raised by COVID-19 are forcing manufacturers to rethink how they use their enterprise resource planning (ERP) systems.

Full visibility into supply chains is a must. Plus, the need to understand when and where there are supplier and other delays.

Manufacturers seek to strengthen relationships with existing partners and build ecosystems for long-term resilience.

Finally, as consumption patterns shift, manufacturers also need the flexibility to react to changing market conditions.

Therefore in this article, we look at how a well-integrated ERP system can help businesses address many of the challenges that have arisen since COVID-19.

What do manufacturers need to rethink since COVID-19? How they:

  • improve the visibility of inventory, sales activity and the financials
  • store and access customer data
  • identify essential metrics
  • make important decisions quickly
  • shift resources, alter production volumes, adjust supply chains
  • improve the customer experience

Thankfully an ERP integration can provide solutions to many challenges manufacturers face in the ‘new world’ that is post-COVID-19.

ERP Integration

An ERP integration refers to connecting a manufacturing ERP system with other back-end systems ranging from eCommerce, CRM, PIM or product information management, warehouse management, accounting, and other business systems.

In many cases, ERPs come with pre-built integrations. But it’s also unlikely that every ERP comes ready-made for every integration a manufacturer needs. Since manufacturers run a mix of complex legacy systems, modern SaaS, and everything in between, it’s important to familiarize yourself with all available ERP integration methods and determine which ones are most optimal for your business.

ERP integration maintains a single source of truth

One of the main reasons manufacturers should integrate their ERP systems with other back-office systems such as eCommerce and CRM is to maintain a single truth source.

Manufacturers run on large volumes of data. Without a single source of truth, information can be difficult to locate, manage, and relay to the right place at the right time, hurting manufacturers’ competitive advantage.

Without integration, numerous systems operate in silos and have different (or missing) customer information elements, product data, or order details. With an integration syncing this information between systems in real-time, manufacturers can enjoy greater data accuracy, streamline operations, unlock additional staff productivity, and boost their revenues.

How ERP Integration Works for Manufacturers

The purpose of ERP integration isn’t merely to digitize manufacturing processes that were previously done by paper or a phone call. Integration introduces numerous other benefits felt from the factory floor all the way across business systems and supply chains, including what we’ve mentioned earlier and in more detail these areas too:

Fewer data errors

Manufactures maintain numerous complex relationships with their suppliers, distributors, and resellers. As such, managing accurate user details, order data, and shipping information is mission-critical for manufacturers.

This data must seamlessly travel between the eCommerce, CRM, and ERP system, where it usually lives. When data is connected, there’s no need to manually re-enter it, reducing the possibility of errors, inconsistencies, and duplication over multiple systems.

Customer experience

Manufacturers must relay real-time inventory, stock numbers, and order data to partners and customers. Otherwise, customers can get incorrect order history, fail to receive shipping notifications, and orders can fall through the cracks entirely.

When the ERP’s customer data integrates with customer data in eCommerce and CRM, it’s easier to relay real-time inventory, order updates, and fulfillment data to partners and customers.

Employee productivity

Since an ERP manages multiple business processes, it also manages operations involving human resources. With ERP-eCommerce integration, it’s easier to track and automate onboarding, quoting (RFQ), approval processes, checkout, and other time-consuming and unproductive sales activities.

Since routine tasks that don’t need creative problem-solving can automatically occur, manufacturers can save time and money and build better relationships with suppliers, partners, and customers.

Financial visibility

When production, transaction, and financial data is linked with the ERP, it’s much easier to build more accurate financial reports. If integrated with the CRM and eCommerce system, you can generate reports with sales and customer data.

All this makes it easier to create financial projections, visualize cash flows, generate profit and loss statements, and share that information with the organisation’s right members.

Improved connectivity

An integrated ERP system enables transparency and collaboration from the factory floor to supply chains. Brands can optimize material movements between warehousing and production.

By integrating suppliers, manufacturers can improve the supplier experience, better understand material availability, and optimize production.

Production management

Manufacturers tend to deliver products for different brands and sub-brands simultaneously. To use their resources effectively and plan ahead, manufacturers need to have visibility into all production cycle areas.

Integrating the ERP with warehouse management systems and supplier networks offers visibility into product traceability and helps manufacturers improve performance.

Multichannel effectiveness

Many manufacturers serve numerous verticals yet run on narrow margins, so any ability to boost productivity is welcomed. When changes in the warehouse system, CRM or eCommerce are made, an ERP integration immediately relays them to the ERP system.

This can greatly increase efficiency for businesses that have an offline and online presence, operate numerous selling channels, or sell in different regions or countries.

Inventory management

Connecting an ERP with eCommerce and CRM helps manufacturers understand the relationship between inventory and sales. These critical pieces of data help reduce carrying costs and optimize capacity for seasonal trends and possible disruptions.

With a connected ERP, you better understand your inventory and create more accurate projections, allowing you to take advantage of opportunities.

Alignment is the biggest benefit of ERP integration

Many manufacturing businesses are great at improving small individual processes but are slow to take on transformative projects like system integration. The larger the ERP integration project, the more they fear can go wrong.

However, a connected ERP allows manufacturers to align various disconnected business silos, processes, and human resources. Sharing crucial information across the far reaches of the organization and getting closer to customers are other benefits.

Perhaps most importantly, integration offers leadership teams much-needed insights to take action when it is warranted. All these benefits culminate in better financial management and reduced manufacturing costs, leading to better control of their business now and in the future.