ERP in Operations Management - Significance and Key Components
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ERP in Operations Management

by Iryna Skvoznikova

What do we call operations management within a single business? We can call it a process that comprises such aspects as forecasting, organizing, controlling and inspecting production processes in a company. Any business needs ERP in operations management if there’s a need to transfer the materials onto a finished product on time and with complete success.

Why do you need ERP for this? With a good software solution, you can automate a bigger part of administrative processes, get access to the real-time reports and get to know what is going on at any moment. In most of the cases, you will have access to the information at any time of the day or night.

What is MRP in operations management?

MRP may seem a weird abbreviation but it was a popular software solution just a few years ago. It stands for material requirements planning and it’s a predecessor of ERP solutions. It was used mostly for managing the materials that were used for crafting new products. MRP comprised three components:

  • Materials and components inventory
  • Defining what’s lacking
  • Planning the production

It was first built and used by Joseph Orlosky, an engineer at IBM company in 1964. He analyzed the way the Toyota production system worked and developed a new methodology for the process. MRP systems were used for automating production processes by a big number of companies for many years since that.

MRP in Operations Management | Diceus

MRP operations - key functions and features

There’s always a need to keep up the pace of the production process, see what materials are missing or what components of the production line should be improved. A goal of MRP is to let the company have a smooth workflow of the production processes. This is a good base for maintaining good revenue and a base for making important decisions.

Inventory. Managing the inventory is a key task of MRP solutions - a system analyzes the presence of all the materials required for the production processes. There’s no need to do manual check-ups.

Costs reduction. Thanks to a smooth workflow of the production, there are no budget blowups. There’s always a required amount of materials and equipment for making production steady.

Production workflow. The whole system works steadily. There are no breakups in the supply chain, no need for workers to spend time on solving problems and so on.

MRP system is not enough for the whole company these days. It can improve your production but it cannot give you complete control over the operations. You don’t have a proper integration with the sales team or marketing department, accounting or other components of an enterprise. ERP comes to the rescue and becomes a reasonable solution.

Top features of Enterprise Resource Planning

A robust and comprehensive ERP solution will let you manage and supervise the operations in your company. What are the key features of enterprise resource planning?

Integration

Here we mean the possibility to use this software with other solutions for an advanced workflow of your company. You can integrate it with other solutions and systems. If you have custom ERP software, you will definitely have such an opportunity.

You get a comprehensive platform that you can use for analyzing, supervising and managing most of the tasks. You get one database where the data is collected and stored. It can be easily accessed from any department at any time. There’s no need to be physically in the office to access the data.

Integration gives you a possibility to improve communication between departments within one company. It’s especially helpful if you have overseas branches. There are no misconceptions between departments and there all the information is visible and clear.

You can see the history of transactions, sales pipelines that were used five years ago and the ones that are used now, use trends and forecast the future revenue. You get the efficient organization of the processes with an easy access across all the departments of the company.

Automation

ERP is responsible for automating tasks and making the workflow run smoothly and evenly. We can mention here such tasks as accounting, reporting, forecasting, invoicing, processing payments and so on. There’s no more need to spend human hours on the actions that can be delegated to a comprehensive application.

There’s a minimal risk to make a mistake. A human may simply enter a wrong digit and the whole system will fail. With the automated app you won’t have any manual interactions and therefore the accuracy of the reports, forecasts and other pieces of information will remain great.

Data Analysis

Collecting and storing data is not enough for an efficient business workflow. There’s also the need to process information and get the right items on demand. Data analysis in the ERP system is an important feature as you may have tons of information that you will never cope with manually.

Business decisions depend on data analysis. You may request information about a specific segment of your clients, about any of the functions that your enterprise performs. You may use this software for planning the budget for the next period or forecast the amount of produced goods. Data analysis gives you fast and reliable tools for improving your business performance.

Reporting

Reporting differs from the previous feature called data analysis. Reporting means providing users with easy-to-perceive data that may come in a form of visuals, dashboards, tables and so on. A report is a result of the conducted analysis. You can grant access to the reports to specific positions in the teams or departments.

In most ERP systems, you can generate a new report at any time. And you will get the latest data. And a great benefit here is a lack of errors.

CRM

Customer relationship management feature is helpful for every company that has at least one client. If you use a standard spreadsheet for keeping tracks of your customers, you should definitely take a closer look at available ERP solutions with a CRM module or component. You will get all the information about each client with a 360-degree view - all in one place.

You will have a pack of tools for automating the sales, email marketing campaigns and much more. You will be able to manage the lifecycle of each sales pipeline and reach full customer satisfaction.

SCM

Supply chain management feature is responsible for the information about the availability and presence of materials for productions. It also supervises the way all the materials turn into new goods on time and how they get to the store. Software solutions tend to automate these processes and this is quite helpful for large enterprises.

Accounting

Managing finances is vital for any business. ERP solutions will offer you various tools for efficient accounting. You get complete control over receivables, payables, assets, risk and tax management. You can deal with a few currencies and organize all the processes across the globe. If you have a custom solution, you will have all the components of the accounting module that you need for your business.

Forecasting

It’s a highly important feature as you can plan your future revenue, the number of sales and other aspects basing on the information that you get from an ERP app. You have tons of data processed together with the latest trends and you get a forecast as a result. It may look visually attractive containing visuals and well-structured content.

ERP software functions | Diceus

ERP software functions

You can choose the functionality of an ERP solution depending on the needs of your business. If you choose off-the-shelf software, you will have a standard set of functions while a custom variant will provide you with a specific list that will fully respond to your business requirements.

Here’s a typical list of functions that you may find in popular ERP platforms:

  1. Finance
  2. Operation
  3. Strategy
  4. Product design
  5. Forecasting
  6. Supply Chain Configuration
  7. Quality management

These functions may come as one single software application. Or you may have all of them in a form of separate modules that you add to a new system. The cost of the platform will depend on the number of functions you plan to use.

What’s the significance of ERP system?

ERP platforms are created to create long-lasting value for enterprises. You will not get any benefit if you use a system for a month or two. It’s good to start using it only if you plan to implement it for the next few years. Of course, you will spend some time choosing the right variant or waiting until the app is developed for you.

How can you find and get the most from a new ERP platform in your company? Here are a few simple steps:

  1. Create a new team that will be responsible for managing a new ERP project.
  2. Analyze what’s going on with your business and find areas that can be improved.
  3. Implement successful practices of other companies or test the new ones.
  4. Educate personnel and save long hours of administrative work.
  5. Make the change for the better.

Why choose ERP for your business? | Diceus

Why choose custom ERP solutions for managing operations?

You have your business running or you may have only a startup. There’s always a choice between off-the-shelf systems and the ones that are built for you. The first variant is always available, you can start using it whenever you want. Some of them are paid and others are free.

When we talk about custom platforms, we always mean the best solutions. If you choose the right software development vendor, you will get a user-friendly user interface with a powerful back-end solution that is capable of processing tons of data.

In terms of ERP development, Diceus offers custom enterprise resource planning systems for insurance, fintech, healthcare, construction, and other industries. We know that only powerful and reliable software can meet all the needs and requirements of businesses. We’re here to create comprehensive systems that will let you manage the operations in your company.

There’s no single variant of a platform that will totally suit all the companies. Each will require a specific list of features and functions. If you need custom ERP software that will help you manage the operations, let us know about it and we will offer you a valuable solution.

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