Insights

How An ERP System Keeps Everyone In The Loop—and Making Better Decisions

How An ERP System Keeps Everyone In The Loop—and Making Better Decisions


Jan 13, 2017
Manufacturing and Distribution

ERP Keeps Everyone in the Loop 

You read a lot about enterprise resource planning (ERP) solutions optimizing a job shop’s processes, but one area that’s often understated when evaluating the value an ERP brings to an organization is that of internal communication. In fact, one of the most impressive features of an ERP is its ability to connect all areas throughout the organization, leading directly to better decision-making. Well-informed decisions—as opposed to those that could be described as resulting from a “shoot-from-the-hip” approach—are what make the difference between a company just getting by and one that’s growing profitably.

Reactionary, shoot-from-the-hip decisions are based in part on instinct (which of course every good company leader relies on to some extent) and in part on best guesses about the company’s inventory levels, deliveries, raw materials, product costs, etc. ERP system data gives decision makers accurate, real-time data generated throughout the job shop, from finance and HR to manufacturing, order processing and customer service. That means everyone in the company who’s been given access can see and use up-to-date information to make quick decisions based on facts.

Here are some additional communication-related benefits of having an ERP system in place in your job shop:

  • Centralized Access to Information
    All data related to company performance is in one central portal, greatly reducing the amount of time employees spend searching for the information they need in order to take action.

  • One Set of Accurate Data
    When operating with a mix of department-specific software programs, “different versions of the truth” are probably be being used to make decisions—a very risky prospect. An ERP solution presents a consolidated set of data shared with all departments, putting the organization in a much safer and more powerful place when making decisions about the business.

  • Insights that Supplement Experience
    As Millennials are taking the places of retiring baby boomers, these less-experienced employees benefit from the insights provided by an ERP solution, rather than waiting for experience to catch up with them.

  • Customization by Role
    Today’s ERP systems can be programmed to prioritize the most relevant information for specific users. This means that someone in HR, for example, would see all relevant HR-related data first on his or her dashboard. Rather than sort through all the system’s daily data, users can focus on what’s most important to accomplishing their goals.

  • Depth of Information
    ERP systems help users understand the “why” behind the data they’re seeing. If, for example, inventory levels drop below a specific point, data related to that drop, like current orders and recent shipments, will automatically appear in the portal to help the user understand the problem in a broader, more actionable context. It will also suggest appropriate corrective measures. Using the inventory level example above, the system might alert the user to the next inventory delivery date and highlight all orders that will be impacted by the shortfall.

  • Alerts and Predictive Capabilities
    ERP systems can be set to send alerts when certain types of situations take place, along with corrective action recommendations. Beyond just alerting users to existing issues, the system can actually help predict outcomes of different scenarios, allowing employees to look at current conditions and determine possible outcomes based on trends.

  • Potential for Better Customer Service
    Integrated communication improves the experience customers have with your company. With an ERP in place, customers have accurate, real-time information (through company reps and/or in a customer portal), about order status, problem resolution, product fulfillment and other issues. With real-time access to all critical customer data, sales, service operations and other customer-facing employees can quickly and accurately handle customer requests.

  • Time-saving Automation
    Automation using an ERP also improves communication throughout the organization, sending materials, order and production information to all areas throughout the company. Once an order is processed, for example, the system can send all required information to sales, production, shipping and accounts receivable—ensuring quick, appropriate action based on timely information.

An ERP system makes it possible to have an accurate, up-to-date, 360-degree view of the state of your company. Without it, companies find the process of gathering and making sense of all their information too burdensome and revert to gut-reaction decision making; others spend countless hours working from spreadsheets and other standalone information sources (many or all of which may include errors) and try their best to make sense of it all in a holistic way. Which sounds like a better path to smart decisions?

If you think your job shop could benefit from the “big picture” an ERP solution provides, reach out to talk with one of our manufacturing experts and we’ll show you what an optimized organization looks like, and how it leads to profitable, sustainable growth.

Author(s)

Jeffrey Wulf
Jeffrey H. Wulf
Partner
View Profile

Comments

Write a Comment

* = required fields

(will not be published)

(will not be published)

Job Shop Insights

Subscribe to Job Shop Insights


Submit