You have implemented the ERP software in your manufacturing unit. But now the question is how to translate the manufacturing ERP software into savings. These advanced systems are designed to help manufacturing businesses work more efficiently, quickly, and accurately. Moreover, they provide visibility to control business costs and improve customer service.
In addition, ERP applications serve as the backbone for finance transformation. CFOs are now entering a period of significant transformation for finance in all industries, including manufacturing, with new technologies readily available to improve efficiencies and provide insights into business performance.
Rather than paying for different systems to handle different functions of your manufacturing unit, you should consider implementing ERP for the manufacturing industry This software will simultaneously handle many changing parts of the manufacturing process, reducing overall staff requirements and system expenses. Read further to learn where manufacturing ERP software can help save money.
- Inventory Management
Inventory costs involve the cost of carrying and storing inventory and handling such as shipping and receiving. With manufacturing ERP software, you can automate inventory management processes. Moreover, the system offers better reporting and forecasting, helping keep the inventory carrying costs to a minimum.
- Inventory Reduction
An ERP system for manufacturing business help improves inventory management, which further reduces inventory requirement. This results in lower warehousing costs, handling, and transportation, reduced damage, and storage of less obsolete stock. According to statistics, businesses reported 30% of overall inventory savings and management savings.
- Inventory Turnover
An ERP system for the manufacturing industry is an ideal solution to increase inventory turnover by ensuring the inventory in stock is required in the company. Some manufacturing businesses estimated an increase in inventory turnover from 2.5 times a month to 3.1.
- Material Cost
An ERP system can improve the procurement practices of manufacturing businesses via more accurate forecasting. It allows managers to place orders in time and avoid costly emergency purchases. As a result, the purchasing manager can obtain inventory at better terms and conditions from the vendors.
Moreover, a manufacturing ERP application with a supplier portal can let your suppliers know up-to-date information on your purchasing requirements. It further aids them in planning their production better and passing on some savings to you. Reports state that the improvements in purchasing can reduce purchasing costs by 5%.
- Warehousing Efficiency
You can streamline your warehouse and storage with a manufacturing ERP system. It records essential details of products, such as specific storage requirements, location within the warehouse, handling needs, etc.
- Supply Chain Management
Supply chain management can be improved with a manufacturing industry-specific ERP solution. With improved control over the supply chain, manufacturing units can reduce waste and time delays. From ordering to warehousing, inventory control, and shipping, the ERP system can better manage all these costs by providing better control over the supply chain.
- Information Flow
A technologically advanced ERP solution can centralize and consolidate data, resulting in better reporting. In addition, the system offers automated notifications and task management, resulting in a smoother, faster information flow across the manufacturing enterprise. It means top management can make more data-driven, informed decisions, ultimately reducing costs.
- Manufacturing Labor Costs
Implementing ERP applications in manufacturing enables work schedules to run more efficiently with fewer outages and interruptions. This further lead to a reduced need for re-work and less overtime.
A significant advantage of ERP software is better forecasting of demand and improved workflows, which further means fewer rush jobs. In such a case, the requirement of changing machine setups is reduced, and the factory throughput is improved. Experts estimate that a properly implemented ERP platform on the manufacturing factory floor can reduce direct and indirect labor costs by approximately 10%.
Summing up it all!
As per a recent Gartner Study, 69% of board directors reported that the effects of a pandemic have accelerated companies’ digital business initiatives. The main challenge that CFOs face is how to fund these initiatives while controlling business costs. And manufacturing ERP applications can help enterprises save on business costs. In addition to the above-discussed areas, a manufacturing industry-specific ERP system can help minimize business costs by improving customer service, increasing sales, managing accounting and cash flow, and streamlining process design and production. Eresource erp is one of best ERP software in India. They offer manufacturing, construction, process manufacturing, transportation, trading and distribution ERP software at affordable prices.