What is the Best ERP for Manufacturing?

Table of Contents

What is ERP Manufacturing?

ERP Manufacturing Benefits

How to Choose an ERP

Finding the Right Implementation Partner

As anyone involved in manufacturing knows, there are a lot of moving parts in the manufacturing process. From sourcing raw materials, managing multiple product lines, juggling customer orders, and sending and receiving shipments, there’s a lot to handle. The more complex a process is, the more places that it can go wrong. Fortunately, manufacturing software is here to help. The right software solution can help coordinate communication between different teams, streamline the manufacturing process, and help you better fulfill future orders.

Here’s how.

What is ERP Manufacturing?

First, let’s begin by answering the questions, “what is erp in manufacturing?”, “how erp works in manufacturing,” or “what is erp in manufacturing industry?” ERP stands for enterprise resource planning. Businesses use ERP software to integrate management of their main business processes, streamline operations, and improve communication between departments. Modern ERP software had its origins in Material Requirements Planning (MRP) software in manufacturing. It is possible to do MRP manually, but most businesses use software because it’s much more efficient and cost-effective.

Companies use MRP systems to help estimate what quantities of raw materials they’ll need. It also helps them schedule raw materials deliveries. Sourcing raw materials in a timely and efficient manner is hugely important for a busy manufacturer.

Modern ERP software has evolved far beyond its MRP origins. While still retaining its MRP functionality, current ERP systems also include accounting, human resources (HR), and more.

Manufacturers use ERP software in a variety of ways. In addition to fulfilling MRP requirements, they can also use ERPs to coordinate the availability of different manufacturing lines with pending or potential orders, track market changes, maintain regulatory and legal compliance, and more.

ERP Manufacturing Benefits

Next, let’s look at the benefits of manufacturing ERP for small businesses. ERPs are used across a wide variety of industries, from legal or medical offices to discrete manufacturing. Unsurprisingly, ERPs are highly customizable. Companies can choose between a variety of ER modules that offer different functionality. Implementation partners also customize ERP installations to fit the needs of each business. That said, ERPs offer distinct benefits to different industries, including the manufacturing sector.

ERPs provide five main benefits to manufacturers. ERP manufacturing software streamlines processes, reduces costs, identities inefficiencies, helps companies control their inventory, and allows companies to easily maintain compliance.

Streamline Processes

ERPs streamline manufacturing processes and operations. What does that mean? It means that ERP manufacturing software helps reduce the time between receiving and shipping customer orders. It helps manufacturing firms streamline the accounting processes and easily gather and analyze real-time data from across their business. This provides them with real-time insights into their business. Better data means better business decisions, and better service for their customers.

Reduce Costs

Almost every company wants to reduce the cost of doing business. Some costs are necessary and cannot be cut without risking damage to the business of reducing the quality of their products. A lack controls can lead to wasteful spending, which can send business costs spiraling out of control. In order to manage costs effectively, businesses need to have a way to easily track and measure them. That’s where ERPs come in. ERP software can help businesses track production costs, including breaking down product costs and all the activities that contribute to the total cost of each product. ERPs also allow businesses to automate some tasks like data entry, or to automate or set reminders for critical tasks to ensure that milestones and deadlines are met.

Identify Inefficiencies

Part of reducing costs and streamlining operations involves identifying—and correcting—inefficiencies in the manufacturing process. ERPs provide accurate costing information to help companies identify wasteful costs and wasteful spending. Companies can use dashboards and KPIs to gain additional insight into the business and take advantage of opportunities they may overwise have missed without this increased data visibility. Removing inefficiencies and moving to more swiftly capitalize on opportunities can lead to increased revenue and profit margins.

Control Inventory

ERPs help businesses track and control their inventory. From materials sourcing until the moment when finished products go out the door, ERP manufacturing software can help businesses manage their inventory. This includes tracking the physical location of inventory, as well as manufacturing costs. It can also provide alerts when stock needs to be replenished, as well as forecasts for what inventory and raw materials will be needed to fill future orders.

Maintain Compliance

Many companies across a variety of industries rely on their ERP software to maintain regulatory and legal compliance. Manufacturers are no exception. The best ERP for manufacturing businesses should make it easy for manufacturers to remain compliant with regulations and tax requirements. ERPs simplify the transfer of data between production lines and the back office in real time

How to Choose an ERP

The benefits that ERPs offer to manufacturing firms are dependent on picking the right ERP to fit the needs of your business. While many ERPs offer broadly similar functionality, there are often significant differences between how the different versions of software work and the benefits they offer. As an example, some ERPs are designed the meet the needs of businesses within specific sectors, like nonprofits, healthcare, or manufacturing.

The first step in choosing an ERP is to determine your own internal needs, including current pain points and bottle necks, which features are essential in your new business management software and which features aren’t, and how different departments will use it throughout the workday. Next, you should research the different providers and options available. Focus on ERP software solutions that are intended for businesses like yours, or research and see if you can find out what ERP your competitors use.

After you’ve completed your internal research and have some idea of what type of ERP software you’ll need, it’s time to find an ERP implementation partner.

Finding the Right Implementation Partner

Many ERP software providers sell their software indirectly through a series of resellers/implementation partners. What does that mean? It means that you’ll buy the ERP software directly from an ERP reseller. This offers many benefits for you. Your implementation partner will help customize and configure your ERP installation to fit your needs. Your implementation partner can help you pick the right ERP software for you. They make decisions about ERP implementations every day.

They’ve been through the implementation process many times with many different types of companies. They’ll ask the questions that you might have missed and train your employees so they can use your new ERP with confidence.

Schedule a demo today to see what Sage ERP can do for your manufacturing business.