Role of Manufacturing ERP in manufacturer industry

Introduction

Enterprise resource planning has shown a significant increase of use in various organizations. It has changed various business model towards generating more profit and reduction in loss. In the process of manufacturing too manufacturing ERP has great importance.

If we look at the traditional way in which production work was managed, we get to know how difficult and time consuming it was to manage resources. The pen-paper work, in which a lot of details needed to be filled especially without errors.  From loading of raw material to its processing everything was recorded into books.

Amount of material used in the manufacturing process. The whole conversion of raw material to final product with so many steps involved was all recorded in books.  For any need telephonic lines were mostly busy in coordinating people to the process. If there is any disturbance in the process to know the reason, more people were involved than needed. This made manufacturing process more hectic and time consuming.

As the manufacturing ERP came into use all process got much easier.

From unloading of raw material, everything got recorded into the software. Tracking of where the material is used, to which department it is to be sent all things got recorded .All this could be known in a matter of click to the manager. For example for the manufacturing process what all things are needed for what time interval at which place, by whom , all this information can be obtain in advance.

So when the actual process happens to the final product obtained, we have all this data which is interconnected. The final product is then sent to designation site for further process. The process runs smoothly with prior knowledge of what things are needed. The amount of things needed to the directional flow of the process till its final product, everything is tracked and recorded.

This makes Manufacturing ERP a valuable source to the company. Following are the areas in which Manufacturing ERP plays an important role.

• Systematic management

The production process of any small or big business has various stages. Each stage has its own need of various material and method involved. The amount of material needed in the manufacturing process is depended based on the output units.

So for example, if a company makes peanut butter, then raw material used are peanut, salt, butter. The peanut are roasted and then crushed into powder. The weight value of peanut in added in the software.

The time for grinding to make it powder is also added in the system. The quantity of salt and butter, all this values are added in the system. The three items are mixed and final product is made. Quality and cost of raw material used, time for whole process is set in the system. In this way step by step, noting down the facts till following the flow of process, we can get all the information. The ERP has all the data which can be visualized by the concerned person from anywhere based on the type of software used.

Let’s say the process of car manufacturing; there would be so many things involved. It takes some years to manufacture a car.

The first step is procuring of raw material. Every company is looking for an effective solution in getting high quality to cost effective raw material. Manufacturing ERP plays a vital role in getting information about who can supply them at a desired cost and time. In the second step of designing there are many parameters to consider based on the type of model. An ERP has prerecorded information which helps users to easily fetch and match requirements. With this accuracy of manufacturing process is increased.

The main process of manufacturing form the input to output, everything is systematically done. Parallel cross check of the process is also done to avoid errors and mistake. In the final testing part from the ideal to the real comparison is done which makes the testing process easy for engineer’s to carry out.

So in this manufacturing ERP provides a systematic management of the process.

• Data Security and Privacy

Data for any business is of high importance. Data of various types are generated in the manufacturing process. Traditionally company stored its data by maintaining books. This was very time consuming and hectic. Much of the paper work was done. Now if suppose in the manufacturing process raw material is parceled from one place to another. The buyer has already paid the amount and a physical receipt is needed to get its material. If suppose any person lost it then it’s a loss for the company. If they do not have a proof of the purchased item to get them delivered.

ERP provides an effective solution to this. Everything is stored in the system from purchase agreement to receipt. Whenever any proof is needed they can easily show it. So in this way ERP provides security of data of items used in inventory or for any other purpose.

The second effective solution is in the quantity of the material used. Data of all input items along with the quantity is available in the ERP. So one can know amount of material used and its cost from the system. All the data generated of the whole process is stored in the ERP software. No need to maintain any books.

If it a cloud based ERP then users from anywhere can get access of the data with vital information. Private cloud based data privacy is used and only authorized users can get access to it. Public users are blocked and so in this way data security and privacy of manufacturing process is obtained.

• Error Detection

Error detection is the process done by the company by comparing ideal to the real time values obtained.

There always a flow chart of the manufacturing process. In any stage if there is a variation, that causes error in the process. All this ideal values are prerecorded in the system. Also the flow in the process step by step is also design. Methodology along with value is submitted in the system. Ideal output value is also provided in the system.

Now if suppose the manufacturing process starts, based on the process we input the value in the system. If suppose the amount does not match to the prior information in the system then error is detected in the system. The whole process comes to halt and first the error is solved then process again gets reactive.

Like for example, in the manufacturing process of cement. The input material is limestone, sand and clay. All this materials are crushed and grinding is done. In this 80% is limestone and 20% is clay. Now suppose we do not have mixture of this kind in the system, automatically error is detected in the software and notification will be given. The process will be paused and real reason of what is the mistake will be known.

Employees can correct it and then again the process will proceed. So if this was not done and more clay was added then cement would not be of proper quality and product would not be of desired value.

So by error detection one can get to know mistake easily.   ERP thus provides effective errorless solution to manufacturing process.

• Qualitative and Quantitative Analysis

We have often heard such terms in statistics. But what is the use here in manufacturing process?  Well it’s of great importance.

Any final product will undergo qualitative and quantitative analysis before reaching it to the market. Product produced is of what quality, this study is done by experts. Manufacturing ERP provides solution to this too.

From the starting of manufacturing process till the final product what is the input to output every data is present in the ERP software. Every minute detail can be collected and analyzed. Now if suppose there is a company that produces cup and soccer. So here glass is the input and from the quality of glass how many cup and soccer are made and of what quality can be known.

In quality analysis of what quality is our final product can be known by getting into details of its test performed. Quality test are often performed on goods manufactured. That data is compared to the ideal statistical figures. The final result is then obtained.

The company can differentiate products based on quality and quantity. Based on the type needed they can sent it to concerned unit. By doing so the company can save time. This helps in decision making of what type of goods are in demand. Manufacturing ERP does all the calculation.  Also data of specific goods is shown. This bridges the gap of supply and demand making company’s sales quick and effective. Company generates more revenue in this way.

• Time saving and high production

Manufacturing ERP provides effective solution to time management. When we have prior information as to which things are needed, we can get ourselves ready for it. Also in manufacturing process where high attention is needed to carry out the task, that can be known.

If one task is very hard, we are equipped with material needed for it. If there is any mistake in the task performed, one has the input data. We are aware of the things needed for this condition and in quick time things gets resolved. Necessary material is brought in time and a lot of mismanagement and time waste is reduced.

Whenever error or mistake is less in manufacturing process the production level increases.   Errors and mistakes need time and manpower to solve the problem occurred. With zero or less errors waste of money is also reduced. This helps in attaining strategic and good financial position of the company.

• Getting Estimation

Manufacturing process ERP maintains data from the initial process to the end process of manufactured goods. In this at every stage there is data entered of the input material to input values such as temperature, pressure etc.

All this is stored in the software. From the input data what amount of goods is obtained is also known. So an estimation of output value to the input value is obtained.

Likewise if there is error by human, how much time is needed to solve this can also be estimated from previously known history.

Cost, profit, or loss can be known. For example the cost of raw material from let’s says A company is $5200, that from B is $5150 and from C company is $5100. Other company D tells it to $7000 then this is unacceptable. This was a simple decision but much complex decision can be done by analyzing data and estimation of various processes can be known.

Estimation helps to gain strategic position towards future growth of the company. It helps to tackle any hurdle and getting things done fast.

Conclusion

Manufacturing ERP provides an effective solution towards management of resources. This brings change in a systematic functioning of the whole process. Qualitative and quantitative analysis can be done bringing accuracy to the final product. Manufacturing ERP thus provides and effective solution towards the overall flow in the process.