What is Manufacturing ERP Software? Types, Benefits, Features, and Importance

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Several changes have occurred in the design, manufacture, use, operation, marketing, and sale of products due to digital transformation. Every process, operation, and business become more efficient by iterating and leveraging the power of the latest technologies, like cloud-based Manufacturing ERP software solutions. 

Technology has transformed all industries, but the manufacturing industry is undergoing a revolution. From Big Data to IoT (Internet of Things) to Industry 4.0, and from digitizing warehouses to advanced supply chain management, the manufacturing industry is undergoing an unprecedented digital transformation.  

Organizations must adopt various solutions that will improve efficiency, increase revenue, boost productivity, and enable them to make informed decisions. Following this need, an ERP system fulfils all requirements for a dynamic manufacturing environment and integrates every aspect into a single platform concerning the manufacturing industry.  

Our objective in this blog post is to discuss ERP for manufacturing, including –  

  • What is an ERP System for Manufacturing?  
  • ERP for Manufacturing: What is its importance?  
  • Key Benefits of an ERP System in Manufacturing  
  • What types of best ERP systems are there for manufacturing? 
  • What more can manufacturers achieve from ERP Software for Manufacturing? 

What is an ERP System for manufacturing?  

Manufacturing involves several processes, from material planning to quality control. Enterprise Resource Planning (ERP) software and integrated solutions help streamline and automate all the manufacturing processes.  

The purpose of ERP software in manufacturing is to manage and integrate various financial, human resources, supply chain, commerce, reporting, and operations functions.  

Manufacturers utilize ERP software to improve the usage of resources, efficiency, and overall performance using a single platform.  

ERP software for manufacturing: What is its importance?  

Regardless of the size of the manufacturing company, ERP systems can be beneficial in many ways.  

Thus, to make informed decisions at every stage of the manufacturing process, modern manufacturing companies need solutions and tools that speed up growth and enable a data-driven culture.  

Without the power of big data and analytics, it is complex to run today’s hyper-connected and data-driven manufacturing environment. Thus, manufacturing companies must integrate diverse internal processes, provide a 360-degree view of the entire business, and improve production and distribution.  

It can be challenging to implement the right manufacturing ERP software. Budgets, implementation goals, timelines, and features and functions are just some factors to consider when doing so.  

For many industries, an ERP system is a promising investment. ERP Manufacturing systems should have the following must-have features.  

Key Benefits of an ERP System in Manufacturing   

Today’s ERP manufacturing system offers various functionalities to help manufacturers improve manufacturing processes across the entire organization.  

Below is the list of capabilities an ERP solution brings into manufacturing:  

  • Finance and Accounting  
  • Process Automation  
  • Quality Control and Assurance  
  • Compliance and Risk Management  
  • Inventory Management  
  • Requirement of Planning and Management  
  • Distribution and Supply Chain Management  
  • Asset Management  

Let us explore the features mentioned above of an ERP system and see how they help an organization’s fast-tracked growth.  

Finance And Accounting:  

Developers designed Manufacturing ERP systems to manage entire business operations fully. Manufacturers can easily keep track of every financial activity and documentation using different reports and integrated BI (Business Intelligence) tools.  

It directly benefits the top management to monitor, govern the planned manufacturing processes, and plan future strategies precisely and accurately.  

Manufacturers can customize an ERP system as per their needs. For example, add/remove features when required.  

Process Automation:  

Advanced technology is the best way to fight human errors, automate daily processes, and save person-hours.   

Today’s ERP Manufacturing systems are equipped with advanced features and functionalities, offering manufacturers complete process automation. It makes it feasible to integrate various processes like stock, sales, purchase records, human resources, and so on.  

Automation saves manufacturers time and enables them to access real-time data better to control their manufacturing and involved machines or equipment.  

Quality Control and Assurance:  

Quality control refers to a set of standards and requirements that ensure a particular product meets satisfactory goals set by the enterprise. It is a key motive force for a product’s and business’ success.  

And quality assurance allows thorough examination and testing of the manufactured product. To accelerate quality control and assurance, an ERP software application helps manufacturers track and monitor different quality management processes by alert mechanisms and monitoring at every level of the manufacturing process.  

Compliance And Risk Management:  

A dedicated software application for risk and compliance is unnecessary if manufacturers already have an ERP system.  

ERP systems already have this feature to help you track all the compliance and regulations about environmental, information security, and human resource regulations at every stage.  

Inventory Management:  

Effective management of inventory is vital to all manufacturing companies. Inventory management involves knowing and overall control over finished products, stocks, products’ status, raw material management, purchase order tracking, and more.   

In general, an ERP system for manufacturing includes:  

  • Extensive methods related to inventory management,   
  • JIT (=Just-in-time) features, and   
  • MRP=Material Requirements Planning).  

Modern ERP systems help manufacturers efficiently streamline inventories.  

Requirement Planning and Management:  

Manufacturing businesses must plan their requirements accurately to fulfill their production needs. Manufacturing is a complex process and requires forecasting to meet current and future demands for production. Thus, a data-driven ERP system for manufacturing provides real-time information to make better, intelligent decisions that favor a company’s growth.  

With the help of ERP software, it becomes easy to manage multi-level processes. Such software also helps manufacturers ensure enough material and resources are available to meet demands. Hence, manufacturers can quickly eliminate waste and meet sales needs with a suitable manufacturing ERP system.  

Distribution And Supply Chain Management:  

Multi-store brands and retail chains stress various aspects of managing distribution and supply chain, including warehousing, packaging, points of sale, logistics, and vendors.  

An ERP system is key to a company’s longevity and growth and helps manage distribution and supply chain processes effectively.  

Asset Management:  

The best manufacturing ERP software comes with a module for asset management, which deals with the physical assets and equipment a company or factory must manage. In addition to reducing risk and cost, it also increases uptime and productivity for companies.  

Now that you know the features of an ERP system in manufacturing, let us explore its benefits.  

Benefits of an ERP system for manufacturing industries:  

  • With intelligent ERP software, manufacturers can enhance inventory management, supply chain, distribution, and warehouses.  
  • A good ERP software application is cost-efficient when manufacturers look for automating processes to increase production efficiency and save time.  
  • Manufacturers can unify all diverse modules of manufacturing with an integrated and complete ERP software such as Microsoft Dynamics 365 for Sales, Supply Chain, Marketing, Finance, Customer Service, etc.  
  • With real-time reporting and dashboards in Manufacturing ERP software, manufacturers can make better decisions quickly.  
  • An ERP helps optimize manufacturing operations and processes and enhances management to boost growth opportunities.  
  • Obtain enhanced workflow visibility and a 360-degree view to control the entire manufacturing process.  
  • ERP software helps manufacturers provide customers with the ultimate experience.  
  • Factory managers can quickly resolve all issues using advanced alert management and collaboration features in ERP software.  
  • Manufacturers can help employees to better adhere to compliance and regulatory standards with the help of ERP software applications.  
  • An ERP system helps manufacturing companies avoid risks, reduce redundancy, and mitigate human errors.  
  • Manufacturers can better forecast current and future demands using advanced analytics, cloud computing, and business intelligence tools.  
  • An ERP system makes it easy to access real-time data to create relevant, faster, and more effective decisions that help an organization grow faster even in volatile market conditions.  
  • Across the organization, administrators can improve quality management and streamline operations by helping employees deep-dive into the use of ERP software and its benefits.  
  • By implementing a manufacturing ERP system, companies can increase productivity, systematically define product life-cycle management, and establish a strong relationship between customers and employees for overall happiness in the organization.  
  • ERP software centralizes data storage and provides safe access to the data, reducing overall cost and operational overhead that manufacturers try to put into having multiple software applications.  

Since the tech-driven industrial revolution, ERP systems have been driving manufacturing. Hence, they help ensure the adaptability and flexibility that companies look for. With them, it is easy to adapt to sudden market changes, enabling organizations to gain a competitive edge.  

What types of best ERP systems are there for manufacturing?  

There are two kinds of ERP software for manufacturers –   

  • The first one is – Custom ERP, and   
  • The second one is Off-the-shelf ERP.   

But when it comes to manufacturing, there are several types of ERP systems, including –   

  • For assembling multiple parts to create a product, there is the Discrete Manufacturing ERP System   
  • For Batch process manufacturing, manufacturers implement Process Manufacturing ERP systems, and   
  • Finally, for combined manufacturing, companies use a Mixed-mode manufacturing ERP system.  

Now, if you are wondering which ERP system is the best, you are not asking the right question since it depends on your requirements. Thus, the best ERP is the one that best suits your company’s needs.  

Today, different deployment and setup options, such as ERP software’s size, functions, and what is required, are available.  

An ERP system must be hosted locally on existing systems for on-premises needs. It will offer complete control, management, and ownership of all the aspects of your manufacturing processes. Only manage hardware and system infrastructure, and that is all. But it has its pros and cons.  

Whereas a cloud-based ERP system like Microsoft Dynamics 365 is intelligent and is an ideal fit in today’s highly competitive manufacturing market. Cloud-based ERP systems are popular among manufacturing giants like Otis Elevator Co., Vanguard, Saia Inc., etc.  

With cloud computing’s help, ERP software has the power for scalability, agility, and good accessibility compared to on-premises ERP software systems.  

A cloud-based ERP and Hybrid ERP system (a combination of both the options, cloud and on-premises ERP, allowing manufacturers to leverage the best of both worlds) saves manufacturers a ton of cost and time since it is an ERP software that is deployed “as a service” using the cloud services like Microsoft Azure.  

What more can manufacturers achieve from ERP Software for Manufacturing?  

When a product or process of manufacturing a product goes out of people’s sight, manufacturers will not even know. Thus, connecting, tracking, collaborating, automating, and managing manufacturing processes is always favorable to give manufacturing companies a competitive edge.  

And for running with time and constant change, manufacturers must always strive to be adaptive since the processes and strategies that are working today may not work tomorrow.  

Manufacturing companies should always be open to keeping pace with today’s advanced and emerging technologies and embrace changes to help their organization grow like never.  

An ERP system for manufacturing helps manufacturers:  

  • Be agile  
  • Innovative   
  • Efficient  
  • Strategically respond to unexpected changes in hassle-free ways.  

And if you are thinking or ready to implement ERP software, contact Dynamics Square. We are in your neighborhood and just a text away!  

Dynamics Square is Microsoft’s Gold Partner and helps businesses with stress-free D365 product implementation, training, and 24*7*365 support.