This article closely examines enterprise resource planning (ERP) software, examining what ERP is, which companies should invest, the key benefits of this powerful business tool, and how ERP integrates into other wire and cable software to ensure robust and future-proof operations.
The move away from disparate and disjointed processes
Isolated business applications with disparate and disjointed processes are a risky strategy for any business. Poor product quality, inaccurate costings, increased rework and scrap, and delayed deliveries are just some of the issues manufacturers face by failing to embrace Industry 4.0 and the smart factory era.
New business models
Manufacturing business models must incorporate the significant step-change in business processes brought about by the Industrial Internet of Things (IIoT), smart factories, big data, cloud-based infrastructures, and robust business intelligence.
Enterprise resource planning (ERP) is one such development.
ERP systems are highly effective in bringing tangible results across all operational processes within the manufacturing environment.
Some of these benefits include:
- Data management
- Production planning
- Sales and purchasing
- Order fulfillment and delivery
These enable increased efficiency, enhanced productivity, and improved supply chain interactions and warehouse and transport functions.
Read on for a detailed focus on these and other benefits.
What is enterprise resource planning?
A dictionary definition of ERP is: “The management of all the information and resources involved in a company’s operations by means of an integrated computer system.”
Often likened to the human body’s nervous system, ERP is defined as the ability to seamlessly integrate multiple business processes simultaneously to boost efficiencies, drive down costs and win more business.
Integrating data, including financials, supply chain, operations, commerce, reporting and manufacturing, into a centralized database enables real-time analysis of the entire operation.
ERP gives organizations the information they need, when they need it, in a timely and understandable format. If modifications or changes occur at any stage in the entire business process, the rest of the system is alerted and changed accordingly, resulting in efficient and well-informed decisions.
The essential functions of an ERP are:
- Data management
- Production planning
- Sales and purchasing
- Order fulfillment and delivery
Manufacturing organizations have many types of physical data located at various points across the plant. These include transactional data from business events, analytical data from business performance, and master data referring to crucial business functions.
Looking at each of these in turn:
- Transactional data support the ongoing operation and critical business processes of an organization in areas such as sales, order management, manufacturing and purchasing.
- Analytical data is the business intelligence that demonstrates metrics and measurements that overall supports decision-making.
- Master data refers to robust integration with other software systems that play a key role in the overall operation of the business.
Managing all data improves business process outcomes and enables everyone to use input and output interfaces across all functions.
ERP production planning modules handle all aspects of the business processes.
- Understanding production capacity
- Risk assessments
- Inventory control
- Waste management
With wire and cable manufacturing, operators managing complex production orders with multiple lengths and different sizes can easily complete the job. In addition, spool capacities can be considered along with bottleneck planning.
Enhancements to traditional customer service processes help businesses understand their customers’ needs more clearly. For example, customer personas can be identified using historical data alongside an understanding of customer buying cycles.
Not only does ERP benefit business functions, but it also benefits the customer. Predictions ahead of time enable fast, accurate quotes that fulfill needs and expectations. Ultimately customers feel valued and understood.
ERP systems ensure purchasing processes can be streamlined. Automating tasks allows for real-time data, such as raw material costs resulting in the detailed breakdown of specific items. The ability to allow for multiple delivery dates is another benefit.
For wire and cable manufacturers, customer requests can be progressed with accuracy and speed. In addition, direct insight into stock availability and fluctuating raw material costs can be obtained, assisting with all aspects of sales, purchasing, and quotations. In short, customer service is of the highest standard, and valuable customer loyalty is established.
Order fulfillment processes are full of logistical intricacies that can be carefully managed and synced thanks to ERP. Accurate and timely order fulfillment, including providing complete documentation, are essential to manufacturing and customer satisfaction.
With human error being the most significant contributor to inaccuracies, ERP can effortlessly eliminate various scenarios. Furthermore, avoiding data silos means everyone in the organization can assess real-time data allowing for transparent and up-to-date information.
Features that can improve fulfillment processes include:
- Forecasting software to help determine when to order raw materials and how much to order.
- Historical analysis of purchasing history for customers enables alerts to be triggered if there is an irregularity on the account.
- Shipping software and multi-carrier capabilities to connect order entry with accounts receivable and customer services help streamline the entire process.
Picking, shipment, and billing to the end-user integrate effortlessly to provide the most seamless process. ERP manages raw material costs, cutting required lengths and the subsequent attaching to drums. Businesses can easily add to the customer invoice any last-minute adjustments.
Types of ERP and key providers
There are different categories of ERP software. The main four are:
- Box ERP – Simple to use and install with immediate operation. These systems have limited customization but are cost-effective for most small companies.
- Large-scale ERP – More complex systems created to work with a specific business framework. The system requires a long-term investment in development time.
- Flexible ERP – Lies somewhere between box and large-scale. It can be used out of the box but does have customization capabilities. These are ideal for small/medium-sized businesses.
- Industry-specific ERP – Specialized to operate in specific industries. These provide features that easily recognize industry terminology and integrate with other industry-specific software and complex manufacturing processes.
Major providers of large-scale and flexible ERP systems include:
- SAP – A frontrunner for large enterprises. Implementation can be lengthy but can be accurately tailored to any given organization.
- Microsoft Dynamics 365 – Robust offering for smaller and medium-sized organizations.
- Oracle – A top name for larger organizations. It can offer add-on functionalities and is powered by machine learning and artificial intelligence.
- Aptean – Tailored solutions for larger manufacturers.
These systems all benefit from integrating with other smart manufacturing software systems; examples include design and quotation software and manufacturing execution system.
Which companies should invest in ERP?
The impact ERP can have on any business or organization can be significant. The smoothing out of processes, the added efficiencies, and improvements in service and production planning help towards future-proofing business and gaining competitive advantage.
In reality, most business types can implement ERP and expect to see improvements. Every business has resources requiring ongoing nurturing, such as employees, finances, and business data.
Examples of organizations that benefit most from ERP include:
- Professional services
- Distribution and logistics
Sometimes, it isn’t always necessary for a company to upgrade to an ERP system. Instead, it may be sufficient to leverage the existing software better and make adaptations and upgrades to bring the system up to speed with the changing company processes.
For those where system upgrades fail to meet the demands of a business as it evolves, it is necessary to consider investing in an ERP system.
Within the manufacturing sector, ERP investment is encouraged for all, not just those facing issues. Manufacturers who are flourishing should also embrace Industry 4.0 to remain competitive.
All too often, business owners invest in smart factory processes to alleviate problems caused by adverse business conditions, such as inaccurate costings, inadequate quality production, missed order delivery, and incorrect forecasting and planning.
Favorable business conditions such as rapid business growth, new product development, and new market opportunities should also motivate. The ability to react quickly and accurately to changing customer and industry demands while remaining competitive and profitable should be the end goal for any manufacturer.
What does ERP investment look like?
Before investing in an ERP, or any smart-factory technology, companies should determine their exact requirements through a thorough exploratory process involving multiple departments within the business. Time spent in this area can avoid much wasted time and cost later.
Implementing an ERP system is no easy task. Flexibility is the keyword, and identifying what’s needed to modify every business process is vital.
ERP affects all business functions and is far from being purely an IT project. Because of this, all business functions must be involved and committed.
Business owners should consider ease of use, implementation cost and time, ongoing operating costs, staff training, cloud architecture, and equipment upgrading.
Through comprehensive project research, robust planning, and transparent internal communications, decision-makers can identify an appropriate supplier and ensure staff acceptance.
ERP will undoubtedly contribute to the company’s long-term success, so it is worth remembering that ERP investment will see a return on investment (ROI) further down the line.
Integration with wire and cable specific software
It has been established that ERP systems specific to the wire and cable industry can easily manage the complex manufacturing processes involved by tracking and controlling at every stage.
Let’s now consider how ERP can become an even more powerful tool when integrated alongside complementary software designed specifically for the wire and cable industry.
Dedicated cable design software
Cable design software can be fully integrated into many current and legacy ERP systems and offers another automation level that will bring tangible benefits to users.
Design software, such as CableBuilder, helps simplify the complex management of cable design data from the initial design concept to deliver the full bill-of-materials directly to the ERP system.
Seamlessly managing cable product data through the typical workflow milestones of design, customer quotation, ordering, production, and quality assurance, specific cable design software offers a real advantage further strengthened when integrated with ERP.
Manufacturing execution system
A manufacturing execution system (MES) presents an additional opportunity to help manufacturers achieve the next level of product quality and savings in materials, time and cost. Integrating an MES, for instance, CableMES, into ERP, alongside cable design software, delivers an exponential return that enhances every aspect of the design and manufacturing lifecycle.
MES operates in real time to enable the control of multiple elements of the production process:
- Order execution – Ensure schedule adherence by delivery to length, on time, while minimizing WIP and waste.
- Production performance – Maximise production by minimizing downtimes and running at target speeds while producing a consistently good quality product.
- Material management – Avoid production delays by ensuring that material is available at the correct location, in the right quantities, and at the right time.
- Product quality – Minimise inferior quality products by implementing a robust quality management system that immediately identifies inadequacies and stops adding value.
ERP allows businesses to embrace Industry 4.0 and introduce smart-factory processes. Data management becomes automated, allowing systems and departments to communicate rapidly and accurately. Digitalized data reduces human error and ensures real-time vision across all elements of the business, such as stock levels, WIP, and changes in raw material costs.
Production planning enables a clear understanding of production capacity with bottleneck planning, inventory control, and waste management.
Sales and purchasing processes are significantly enhanced through ERP. Having the ability to use historical data to predict future customer demands enables fast, accurate quotes. The subsequent quality of customer service brings loyalty and ensures customer retention figures remain high. In addition, direct insight into stock availability and fluctuating raw material costs contribute to producing accurate customer quotes, further enhancing customer service levels.
The logistical intricacies of order fulfillment are easily managed and synced with ERP. Human error is eliminated, and shipping software and multi-carrier capabilities connect, ensuring order entry links to accounts receivable.
With a host of ERP systems available, it isn’t difficult for manufacturers to find the perfect fit for their business. Most are generic systems that require customization, but some systems have been developed specifically for the wire and cable industry making integration with other automated systems uncomplicated.
The robust integration of automated systems (Design, MES, and ERP) ensures that manufacturers react to customer queries and industry demands quickly and efficiently, eliminating human error and reducing scrap and rework scenarios.
In short, the ERP is a powerful business tool that facilitates essential communication across all elements of a manufacturing business.
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