An ERP system is software that integrates various departments of an organization, creating a clear view of all the operations. This in turn gives clarity to the business owners on identifying the pain points and working towards customer satisfaction. Now let’s see what ROI can be expected from ERP Implementation.
The investment you make in an ERP implementation varies depending on your company size, the number of processes involved, the number of users, the number of modules needed, customization, and IT infrastructure. Even though it is difficult to measure the exact ROI of ERP implementation, there are many benefits and improvements you can notice in a short period.
Below are the major areas where the problems occur, how an ERP can solve them,
Good Inventory Management :
This is a major issue any manufacturing industries are facing. To keep track of all the information regarding the stock materials, stock arrangements, minimum stock balance, when a new purchase is required, and where to be purchased, all these can’t be done in a manual way using a store manager.
Imagine when there is a high requirement and the production works are so hectic. Suddenly a “stock-out” of raw material occurs! What will happen..? Feels like a nightmare right..?
This is where you need an ERP system that can completely take care of the inventory management, gives you the exact real-time stock information, and creates an alert message then and there to prevent such a situation. Thus you are free from additional costs, which apply to labor hours & machine hours, and also helps to get products delivered on time
Well-organized Production Planning :
This will be the first step you need to consider when receiving an order for production. You have to forecast everything based on the current real-time information and develop a plan to execute the project on time. The production capacity planning tells us, whether we have all the required machines and raw materials that could meet the quantity of products to be delivered on time. Then allocating that particular resource as well as manpower and machine hours to that process.
Even though you come up with a well-organized plan with all predictions, there may occur a sudden machine downtime, reduced manpower, or even late deliveries from the suppliers. These kinds of situations can be well handled by having an ERP that gives control over everything.
Financial Stability :
With several processes involved in the manufacturing industry, the cash flow happens in various departments. Knowing every detail of money being spent helps the organization analyze the reports and estimate the cost for future projects effectively.
The ERP can give crystal clear reports about each penny spent and received. With this information, the company can also reduce unnecessary costs and maintain a stable cash flow which is a major advantage for any business.
An ERP can benefit you in various aspects, but due to the uniqueness and complex nature of the manufacturing industry, it is difficult to list down everything.
Hence you can start comparing your work method before and after the implementation of ERP, and notice all the key points where you can see significant results. It gives you continuous improvement as you can also analyze the process and optimize it more effectively using the results.
