Modern enterprise resource planning (ERP) systems help businesses around the world, including your competitors, revolutionize their operations. Manufacturing companies of all sizes are adopting industry-specific technology designed to better manage business processes on an integrated, real-time basis.
Technologically advanced ERP systems are an investment in your business operations, efficiency, intelligence and productivity. Every feature of a modern ERP system is ultimately tied to these enhancements, which enable your organization to become more productive, more competitive, and better positioned to meet your customers’ needs.
What is a modern ERP?
The origin of the ERP system or solution dates back over 100 years as Economic Order Quantity (EOQ) – a decision tool for optimizing inventory costs. This eventually evolved into Materials Requirements Planning (MRP), a system for managing manufacturing processes, including planning, scheduling, and inventory control. Over time, additional functionality was added, such as finance and CRM, and the individual components were integrated into one overall, albeit difficult to use, system.
An oversimplified definition of ERP is a system or solution that companies use to manage day-to-day business activities, such as procurement, project management, manufacturing operations, and sales. ERP systems can also introduce automation that replaces manual tasks. The goal of an ERP system is to improve business productivity and agility.
EXECUTIVE BRIEF Why manufacturers should invest in a modern ERP
As these commercial systems evolved, they met the needs of their time, but their functionality was directly limited by the available technology. Today’s ERP systems might be better called digital operations platforms (DOPs) to reflect their agile, artificial intelligence (AI)-based, experience-driven nature, as well as the critical role they play in cloud-based digital businesses. While ERP systems have evolved to meet the needs of digital businesses, legacy ERP approaches fall short of the needs of modern digital businesses. Legacy ERP approaches fail to deliver the speed, flexibility, and intelligence needed in the digital age.
Advancements in technology have transformed what an ERP (aka DOP) can do for your organization. Modern ERP systems provide a live view of what is happening and its impact on your business today, as well as in the months and years to come, allowing you to focus on the future rather than the past.
So why haven’t all manufacturers adopted a modern ERP system?
Main benefits of an investment in a modern ERP
Despite some uncertainty about investing in a modern ERP system, major manufacturers are taking the plunge. Productivity gains and process improvements more than offset the costs. Moreover, modernization can have a strategic impact on the company. Without access to a modern ERP system, it is difficult, if not impossible, to support new business models and benefit from the key performance indicator (KPI) improvements that come with a successful ERP implementation.
Some of the key benefits of a modern ERP system include its ability to help organizations:
Improve user adoption: You can’t get return on investment (ROI) if your employees can’t use your ERP system. Updated systems are more user-friendly, encouraging employees to seek out data and incorporate it into decision-making.
Why are companies delaying ERP modernization?
There are several misconceptions that prevent manufacturing business leaders from modernizing and moving their ERP system to the cloud. These misconceptions include the belief that the cloud is insecure, that it is more expensive, that failures occur more frequently, and that a cloud-based ERP is unique. Business leaders are also concerned that an ERP implementation could cause significant business disruption, loss of organizational focus, or even a “breakdown” of business processes that the company sees as essential to its success.
In today’s rapidly changing and increasingly competitive business environment, manufacturing companies need complete enterprise-wide visibility and the ability to collaborate across the ‘business. They need the agility and flexibility to react quickly to a changing market, grow and grow to take advantage of new opportunities, ideally ahead of the competition. Legacy system functionality may have been sufficient for earlier eras, but no longer meets these ever-changing requirements. The way of doing business today is data-driven and requires the right tools to access, share, and leverage that data to make business decisions to not only survive, but also grow your business.
Make Better Business Decisions – Business analytics enables companies to connect data across business silos and explore overall results and KPIs to functional contributors. With modern ERP systems, companies can develop the “analytical mindset” within their organization to increase data-driven decision making to improve operational efficiency. And by aligning corporate KPIs with departmental goals, teams and individuals can get a clearer picture of how their priorities impact overall business performance.
ROI is still the key metric for business decision makers, and modern ERP systems help teams communicate more clearly with management stakeholders through business analysis, scenario planning, and analysis. financial impact analysis. By understanding the drivers of current financial results and then using tools to model future results, teams not only gain greater confidence in their decisions, but also greater support from leaders who know that ‘they invest company resources intelligently.
Attract and retain talent – A dual challenge for manufacturers today is the retirement of employees with years of “tribal” knowledge and manufacturing expertise, combined with a new generation of workers less inclined to embark on careers in manufacturing. Without these resources, your business cannot exist. This new generation of digital “natives” demands technology that is user-friendly and compatible with the way they work. They want software that mirrors the look and feel of the applications they use in their daily lives and supports immediate data access and collaboration. For many manufacturers, modern ERP systems have been a key differentiator when targeting this generation of workers.
Break down business silos and increase collaboration — By extending ERP capabilities beyond operations with a modern platform, manufacturers can increase collaboration across functional areas to improve workflows and increase productivity. As teams leverage improved communications and cross-functional data, they can reduce cycle times and increase accuracy. Social tools native to ERP systems allow teams to share rich information across regions and time zones using devices that support work where and when needed.
ERP systems must support “outside-in” requirements for exchanging information with suppliers and customers. Networked support for processes such as supply chain management, product lifecycle management, and order management helps reduce cycle times, increase accuracy, and improve overall business flexibility. Analytics for contextual decisions can take into account third-party data, such as inventory levels, lead times, and demand forecasts to improve planning, scheduling, and cost and risk management.
Improve key performance metrics – Manufacturing companies using the latest ERP versions see more significant benefits in metrics such as complete and on-time delivery, inventory turnover, internal schedule compliance, and reduced operational costs . These performance improvements have a direct impact on the bottom line, which may even be enough to pay for the ERP system.
Use Emerging Technologies – Analytics, mobility, cloud, partner networks, and the Internet of Things (IoT) are becoming table stakes in the modern manufacturing environment. Organizations are becoming more and more sophisticated in their use. For example, using IoT and analytics together (e.g. applying analytics to low-cost sensors on machines) can help support predictive maintenance and enable higher profits in new designs. on duty. Outdated ERP systems cannot support this innovation.
Why Infor® for a modern ERP?
Industry Specific Capabilities
• Optimal collaboration between suppliers and customers, configuration and design
• 90% of industry-specific features are built-in/configurable
• Ongoing cloud upgrades deliver new features delivered with the ability to switch as needed
• Minimize customizations for future flexibility, cost management and risk management
Ease of adoption
• Pre-bundled capabilities go beyond finance and HR into industry-leading CloudSuite™ solutions for enterprise workflows
• Multiple core drivers enable agile development of new capabilities tailored by industry group
• Just the software you need for your business without a bloated codebase
• Scalable to additional capacity and capabilities as needs change
• Agile deployment process with implementation accelerators and built-in best practices to reduce time to value
Cloud and technology ecosystem
• Common cloud platform for integration, workflows, contextual BI, extensibility, IoT and AI
• Standards-based middleware for API integration between Infor applications, third-party applications, and IoT
• Data and analytics services for contextual and enterprise-level insights
• Global cloud infrastructure with Amazon® Web Services (AWS®) for agility, scalability and security
A modern ERP enables continuous growth
The manufacturing industry is changing. New business models, products, locations, and regulatory concerns need to be supported, and old technology may not be able to support your business in the new environment. Modern ERP software vendors are continually adding new industry-specific best practices to their solutions that will ensure competitiveness. This will give your organization the flexibility to support growth as your business evolves over the years.
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