ERP: What is it and why it’s important?

erp in manufacturing

ERP (Enterprise Resource Planning) is the business operational efficiency behind every successful manufacturing company. Think of ERP as the central nervous system of the company, integrating crucial functions like inventory management, finance, manufacturing, and customer service into a single, seamless platform.

ERP: Streamlining Operations

An ERP system helps streamline your business’s operations from end to end. It connects all your core functions — like inventory management, finance, manufacturing, and customer service — on a single platform. This gives you a holistic, real-time view of your entire organization and helps eliminate data silos, and keep track of production costs and prices.

  • Inventory management – It lets you track raw materials, work-in-progress, and finished goods in real time. You’ll always know how much inventory you have on hand, what’s on order, lead times, and more. This helps ensure you have enough stock to fulfill orders without excess waste.
  • Financial management – It automates tasks like accounts payable/receivable, budgeting, cost accounting, and financial reporting. You’ll gain insights into revenue, profitability, and key performance indicators so you can make data-driven business decisions.
  • Manufacturing – It schedules and optimizes your production based on actual customer demand. It provides tools for bill of materials, routing, capacity planning, and shop floor control so you can efficiently use resources and fulfill orders on time.
  • Customer relationship management. An ERP gives you a 360-degree view of your customers and their interactions with your company. You’ll have customer data, order history, billing info, and support cases all in one place. This helps build better customer relationships and optimize the sales process.

By connecting your organization and breaking down silos, an ERP paves the way for improved productivity, reduced costs, and sustainable growth. That’s why for most manufacturers, implementing an ERP is not just important — it’s essential.

ERP is the center of all business operations in a manufacturing company, and all other systems, processes and applications must integrate with it and sync data to and from it.

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