ERP Software for the Manufacturing Industry

Everything a business does relates back to profitability in one way or another. It’s the mother of all metrics and drives improvements in sales performance, customer retention, cost control, inventory optimization, order management, supply chain management, workforce productivity, and more.

Reviewing trends in profitability (company-wide, by profit center, product line, or individual product–as well as in comparison to industry benchmarks) can help your manufacturing company understand the big picture in terms of business health. Comprehensive dashboards and performance reporting provide visibility and the ability to drill-down into the details you need.

How do your results compare with others in your industry? Is profitability increasing over time? What are the internal trends? Do you have product lines that are lagging behind? Is there too much inventory on hand? Are there product lines that are growing significantly?

Asking “Why?” for each of these questions can help you create a plan that targets opportunities for improvement. With that plan, you can begin to work on improving those areas and meeting or exceeding benchmarks.

As a manufacturer, you need to have market intelligence at your fingertips. What do your customers want? How and when do they make their buying decisions? Are there seasonal or geographical components to demand in your markets? How is demand changing over time?

Understanding customer demand and projecting demand into the future is a tricky business. You don’t want to overproduce items and tie up working capital. You also don’t want to underproduce and find yourself unable to give customers what they need, when they need it.

With the right technology, you can optimize supply decisions and produce the right products at the right times. The business benefits of accurate demand forecasting—increased customer satisfaction, increased inventory velocity, and increased profitability—are definitely worth it.

When you have reliable demand forecasts, you have the ability to properly schedule production processes. As a manufacturer, it’s critical to plan what you will be producing so you can have the right resources available at the right times. Demand forecasting makes this possible, along with managing your supply chain, understanding customer expectations, and having the right workforce available.

Production scheduling helps you maximize the efficiency of your manufacturing equipment and the other resources in your production facilities. ERP software for the manufacturing industry gives you the ability to see the utilized time for your machinery, including the setup time, so you can eliminate bottlenecks in production. Tools like drag and drop scheduling and work center calendars make it easy to allocate resources and prioritize jobs.

Inventory velocity (inventory turnover) is a key metric for your business and something you need to track–ideally by product or product line–so you can optimize inventory levels and see business trends over time.

Keeping your velocity high means cash is freed up to create a return for your business rather than being tied up in excess inventory. A high inventory velocity also helps you reduce inventory holding costs and protect yourself from inventory obsolescence.

A focus on velocity should also be balanced by measuring your inventory fill rate. A focus on velocity alone could cause stockouts and lost sales if onhand inventory levels are too low. Sophisticated inventory tools are essential for managing your product mix and forecasting demand so you can be nimble in the face of changing market conditions.

Getting the order right the first time and shipping it out quickly with the quality level a customer expects are critical issues for your business.

Manufacturing companies enhance profitability by using efficient order management systems that automate internal manual processes, as well as eCommerce orders received from storefronts, marketplaces, and EDI trading partners.

Not only do these capabilities pay off in increased customer satisfaction and retention, but they also impact profitability by preventing the expense of costly returns, restocks, and reshipments.

In order to meet customer demand and use resources efficiently, manufacturers must understand both the steps that happen outside of their organization and those that happen inside the organization.

Managing the supply chain is vital and it starts with planning: strategic supply chain design planning, strategic sourcing, demand planning, and supply planning.

Manufacturers can take advantage of technology solutions that use what you know about your supply chain and vendor performance to project when to place orders based on lead times, your internal production and shipping time, and demand expectations.