How ERP Helps Manufacturers Adjust to Changing Demand

  • 13 December 2017
  • CTND
Categories: ERP,Manufacturing

ERP illustration displayed over a man holding an ipad and phone

There are two inseparable factors that can make or break a manufacturing business: supply and demand. Without the right data, these factors can seem unpredictable. Sudden changes in demand can wipe out companies that don’t act quickly enough to satisfy customers. It can feel like a hurricane blew through unannounced — without data, that is.

A healthy, state-of-the-art enterprise resource planning (ERP) solution can act like a meteorologist for demand, allowing companies to strategically control supply.

Anticipating Demand

Demand is always in flux. It can be affected by seasons, shifting market forces, new technologies, your own marketing efforts, and anything else that influences the whims of humans and their spending habits.

There is no way to control or predict every factor that affects supply and demand. Weathering the tides of demand requires fast decisions to keep your supply in sync, safeguard quality, avoid warehousing obsolete inventory, schedule equipment replacement and repairs, hire staff when needed, and much more.

None of these decisions should be pulled out of thin air. They require hard data that is current, accurate, and easy to access. But according to a 2015 study by Epicor, 46 percent of CFOs make decisions on instinct because they don’t have this data.

The data those decision makers need is right in front of them — they simply don’t have an easy way to access it. It might be siloed in another department, buried in software that makes finding it cumbersome or confusing. It might even still exist on a handwritten document in a filing cabinet.

Every one of these problems can be solved by the right ERP software, a complex tool that provides a digital map of inventory, suppliers, human resources, accounting, and all the other aspects of your business. Many decision-makers may even have a modern ERP solution, but are simply not harnessing it to its fullest potential.

The Essential Elements of ERP

An ERP isn’t merely a way to keep track of parts and orders; it’s a guide for performing today and preparing for tomorrow. But to transcend being merely a software tool and become the pulse of your company, an ERP needs to be purpose-built.

An ERP with a social element, for example, makes it easy to share information that doesn’t otherwise fit into a database. The sales department might know demand is slowing long before orders decline. Human resources might spot trends in exit interviews that no one else has access to. An inventory clerk might spot a deterioration in part quality upon delivery, but have no way to easily share this observation.

An ERP with a social tool provides all departments with easy and obvious ways to share their knowledge across departments without interrupting their workflow or stepping outside defined roles. In fact, an Aberdeen Group report found that businesses with social ERP tools are 2.5 times more likely to see real-time updates interdepartmentally, and are 145% more likely to have real-time collaboration, regardless of departments or divisions.

Part of the Process

A modern, agile, hosted or cloud-based ERP affects not only a company’s ability to fill orders, but also how limber it is at responding to customer’s desires.

When an ERP is a part of each step of your business process, the data you have access to is up-to-the-minute so you that you know now when raw materials prices drop, demand spikes, machine efficiency decreases, and much, much more. Once you begin to truly master the data in your company, it becomes evident that the dance between supply and demand is much more than a disaster waiting to happen. It is a highly complex pattern of interlocked steps that should inform whom you hire, what you build, how much you build, and whom you trust to be your partners. Even if you are a wizard at making decisions from instinct, your instinct will be sharper with access to the right data.

Cre8tive Technology & Design implements high-performing ERP solutions for manufacturers in many industries. To learn more about what we do, get in touch with us today.

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