Digital transformation surrounds us and we can read about it on all technology-related websites. You can see that there are new approaches to software development lifecycles and delivery time is becoming shorter. And this makes an influence on common business models and processes – we see how they improve and become more sophisticated at the same time.
The rapid speed of technology development and implementation may be a bit threatening for business owners. However, there’s a need to meet the requirements of a new digital age to stay on the competitive edge for a long time.
Customers want to have personalized sales and ads, one-day delivery, smooth communication and transparency of all orders. Production lines should work efficiently and provide customers with the right number of goods on demand. What can help you meet all those requirements? Implementation and integration of ERP solutions will help you make your core processes efficient and productive.
Manufacturing ERP software: Why migrate to the cloud
The manufacturing industry comprises complicated business processes and has a lot of requirements for the software. There’s a need to access data in real-time no matter what type of device you are using at the moment. It’s good to have an opportunity to extract any piece of data from the database in a second or so.
A cloud solution is an application or a pack of them that are installed on a remote server. If you have a custom variant that was built for your company, you will access it the way that is comfortable for you. Most off-the-shelf solutions, on the contrary, are available through web apps. It’s not always comfortable to navigate through them from mobile phones.
Three reasons to migrate to the cloud:
- Scalability. The system scales up or down to the number of users or requests.
- Flexibility. You can expand the server capacity with a few clicks.
- Reliability. Data is protected and accessed via secure protocols.
Moving your ERP software to the cloud will let you simplify the processes inside the company. You can restrict access to specific components of the ERP for SME like bar code scanning for one group of people and viewing the partners’ contacts for another one.
Cloud solutions can be integrated one with another. You can have a look at the available solutions like Amazon Web Services, Microsoft Azure and others. Besides, they are good for any manufacturing areas including construction companies.
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You can benefit from using cloud ERP for any kind of manufacturing industry from aerospace to electronic devices. It will let you add, remove and manage operations, inventory, costs, quantities, replenishment planning and so on.
What is an ERP system in manufacturing?
In simple words, ERP software for manufacturing company solves the following tasks (a few of them):
- Production planning and management
- Financial management
- Inventory management
- Customer relations management
- Distribution and logistics
- Equipment and assets
- Management of orders
If you have never implemented a complex software or you think of upgrading the current one, we have a list of things to check. If two or more statements below are true for you, it’s high time for a new ERP system:
- You spend too much time aggregating data from different sources
- You spend too much time collecting and analyzing data
- You are not satisfied with current business reporting
- You have separate systems and departments that don’t communicate
- You plan to grow or scale up only specific departments
- Back and front-office operations take a lot of time and they are still inefficient
- You spend costs on redundant things
Top three failures because of poor manufacturing management in ERP
What if your ERP system fails? There’s a lot to read about how good it can be but let’s have a look at the top failures that global manufacturing companies have ever faced.
Cisco aimed at becoming a market leader in the 1990s. There was a gap in tracking the inventory of goods that were produced in several locations across the globe. The supply system was built to be highly responsive and to be able to manage the demand. The result was the production of a twice bigger amount of hardware that led to a loss of $2.2 billion in 2001.
There was a claim that this problem was caused by the system that was developed by the company. The automated system recorded a bigger number of hardware pieces that were ordered. This system ignored significant issues like the level of debts, interest rates, bond markets, and other parameters.
How could Cisco prevent the disaster? Having a great department responsible for integrating a tracking system doesn’t guarantee the absence of any cyber-attacks or insufficient forecasting results. Data security is of high importance as well as developing stable and consistent software products. Outsourcing ERP software development to a company with good expertise and experience could minimize the risks.
Nike spent $400,000,000 to upgrade the supply chain management software and ERP and CRM systems in 2000. There was a problem with untrained staff but Nike representatives stated that they solved this problem. There was an announcement to increase profit by 2003.
A wrong choice of the development company and a blind belief in the forecasting system influenced a footwear supply chain. Retailers had to place orders in advance and it was called “a crystal ball scenario”. It wasn’t a traditional Nike business model. This led to the loss of $40,000,000 of the income.
How could Nike prevent the disaster? There had to be a clear and easy-to-use supply chain control system and the analysis of competitors’ activities. The human factor, wrong software and the change in demand are the key things to consider to avoid such cases in the future.
This company had a new ERP and DC systems that were responsible for picking orders and moving them to the right location. There were so many expectations about the future profits that the company made deals long before the use of the new systems. There was a big load of orders that the new system couldn’t process the right way.
The software errors led to the partial shipments of the orders and tons of complaints about that fact. There wasn’t any opportunity to see what’s missing on the order. The company announced its bankruptcy. Its major competitor bought the company for $80 million while the cost of the main operating department was about $5 billion.
This was a tremendous disaster for the drug supplier that was caused by the use of the wrong software that caused the supply chain transportation problems. Foxmeyer couldn’t solve the problems as the two companies above.
How could Foxmeyer prevent the disaster? Hiring the right company for developing reliable and stable solutions for planning and managing the supply chain could save them. It could be outsourcing the services to make sure that only qualified and certified people deal with creating a product that can influence the future of the whole corporation.
Manufacturing ERP modules: Blockchain
It’s important to have tools for manufacturing traceability. Reaching this point is critical for production processes within an average company. Blockchain leverages traceability and brings process transparency onto a high level.
All operations and transactions are recorded. No one can ever make changes to these pieces of data. As a result, we get a single source of truth in a chain of custody. When we are talking about everyday operations, we will have minimized downtimes.
Replacement parts. For example, an ERP system can use IoT machines to manage replacement parts. They will track orders, arriving and installing stages. If these machines are based on blockchain, you will end up with a transparent automated process that will greatly improve shipment traceability for the end-users.
Food and beverages. Blockchain can help organizations meet regulatory compliance of the Food Safety Modernization Act and other norms. There will be full food traceability from production lines to shipments. You can access realtime data where the product is now like on a field, farm, factory, distributor and so on.
Each checkpoint is recorded and cannot be changed. The slightest change of the product quality will be seen in less than a second – a retailer will have an opportunity to get only best-quality food or beverages.
Pharmaceutical industry. Blockchain is a magic wind for anti-counterfeiting efforts. It can also improve the security of the supply chain and guarantee complete regulatory compliance. There are strict requirements from the Drug Supply Chain Security Act (DSCSA) regarding tracking and tracing prescription drugs.
Transparency and visibility of each stage of production and supply lifecycles are efficient with the help of blockchain. Improvement of these processes will lead to an increase in revenue and better ROI.
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The implementation of blockchain requires the adoption of new business models no matter if it’s an energy company or trading company. If your organization is ready for change and digital transformation even for the core processes, you will benefit from implementing blockchain.
Advanced manufacturing software – expand the capacity
When you face the need to scale up your business, you have two ways. The first is to add more space for production, warehouses and so on. Another way is expanding with the help of software. The second variant means using only existing capacity and improving the processes so that they will meet new demands.
An advanced ERP system will reduce the number of downtimes, track materials availability, production lines, any problems with delivery and further distribution. You will have fewer human working hours, no duplicate or inaccurate data, fewer delivery delays and so on.
ERP system for manufacturing company from Diceus
We deliver robust ERP solutions for manufacturing organizations that improve the efficiency of the processes. Diceus becomes a technology partner that takes care of the implementation of the latest technology stacks for good performance. Every partnership is driving digital transformation that will let manufacturers reach their business goals.
We can help you define what kind of ERP system you can benefit from and provide you with a thorough analysis of the current technology trends. Let us know about your current processes and we will get back to you with variants on how to improve them.