What are the Benefits of Using an ERP System?

For our friends that own and operate machine shops, there are many benefits of using an ERP system. When you are running a busy shop, you can’t be worried about a handful of independent computer software systems that don’t play nicely with one another. That’s where Enterprise Resource Planning (ERP) software comes in. ERP is software that integrates and streamlines some of your most important business processes in one place.

Let’s take a look at some of the benefits of ERP software, and what ERP can do for your shop.

What are the Basic Features of ERP?

As CIO Magazine so clearly explains, “Enterprise resource planning (ERP) software standardizes, streamlines, and integrates business processes across finance, human resources, procurement, distribution, and other departments.”

With this in mind, there are a few things that a shop owner should look for in ERP software. These include:

  • A common database that is shared between departments
  • Real-time business processes
  • A consistent user interface that is easy to learn
  • Integration across your entire operation

As you can probably already see, the job of ERP software is to make sure that businesses have a clear understanding of how their business is operating at all times.

While it is possible to find an off-the-shelf ERP software that will have to be optimized for your business, some software providers (like Cre8tive Technology and Design) offer a fully configured turnkey ERP. A turnkey ERP has been customized to the unique needs of the machine shop that will be implementing it.

As the name implies, a turnkey ERP is ready to work right out of the box, and will include the training and support necessary to see immediate results. Unless you have a lot of time on your hands to finesse ERP software to do what you need most, a turnkey ERP is definitely worth considering.

What are the Main Advantages of ERP Systems?

There are many things that ERP can do to make your business operate better and more smoothly. They improve efficiency across your entire enterprise. Here are a handful of ERP system benefits:

Enhanced Customer Service

Imagine knowing at a glance how long an order took from sales to fulfillment. Or, what if you could track customer behaviors and know in a moment how many customers that order item A also order item B? How great would it be to have a system alert your supply chain automatically

just before your busy season?

Modern ERP can manage all of these tasks. ERP is designed to improve customer service by automating what can be automated (moving a task from sales to the shop manager, for example), and help track customer relationships across time. With ERP, you can alert your customer that it’s time to replace a part you’ve machined before it fails.

Real-time Reporting

One of the benefits of an ERP implementation is that you can get reports and insight in real time. Your business data is available at a moment’s notice. When inventory shortages, shop floor errors, or supply fluctuations occur, you can know immediately to allow you to take action. If business suddenly increases, your HR staff will know instantly so labor rates can be altered.

Expanded Automation

Much of this reporting is made possible by increased system automation. Southern Illinois University explains, “ERP software automates repetitive tasks, such as order fulfillment, payroll deposit, and inventory management. One example would be the automatic notification of a company’s inventory and shipping departments when a sale is placed.”

Automation increases efficiency and saves time. This can offer a competitive advantage because your focus can remain on your shop, and not on all of the business functions.

Cost savings

System automation will save you money, but an ERP solution can also help trim costs in other ways. Instant reporting can help you to track inventory, sales, billing, and purchasing. Integrated systems can make it easier to understand your freight spending, shop floor optimization, and more. You can see connections between your billing cycles and your spending cycles.

An enterprise resource planning system can help make your shop more efficient and more financially nimble.

As we’ve said elsewhere in our blog, “Beyond the initial upfront cost, ERP software will actually save costs in the long run. An effective ERP platform will boost efficiency among employees and machines, and reduce manual administration costs. Inefficient and time-wasting workflows are eliminated, freeing up more time for employees to complete tasks that are productive. The ERP system will pay for itself in gained revenue.”

Supply Chain Management

Because of the benefits of ERP software that we’ve mentioned above, ERP can be remarkably helpful in managing your supply chain. Because you’ll know immediately when a product is ordered, and because the ERP has calculated inventory and parts and labor, all in the single system, you can better plan for fulfillment.

If parts are delayed, equipment fails, or there is a problem with a supplier, your ERP can alert you immediately, allowing you to stay ahead of the curve.

Improved Collaboration

Perhaps the biggest advantage of an ERP system is that it improves collaboration across your enterprise.

CIO says ERPs, “promote collaboration through shared data organized around common data definitions, resulting in better decision-making. The standardization and simplification that ERP systems offer result in fewer rigid structures, thereby creating a more agile enterprise that can adapt quickly while increasing the potential for collaboration. An ERP systems centralized database, while being a bigger target, is easier to secure than data scattered across hundreds of systems.”

If you are ready to take your machine shop into the future, Cre8tive Technology & Design has developed a Turnkey ERP Solution. Contact us today to learn more.

Posted in ERP