Select an ERP system that keeps up with the evolving needs of manufacturing operations
EXECUTIVE BRIEF
Efficiently turning raw materials into finished products means looking beyond the walls of today’s factories to global value chains where advances such as big data and the internet of things (IoT) are enabling external collaboration and driving operational innovations. To keep up with evolving business practices and constantly changing markets, manufacturers need an enterprise resource planning (ERP) system that not only supports their procurement, project management, operations, sales, and other day-to-day activities, but also gives them the flexibility to easily shift wherever and whenever business demands.
Modern ERP systems might be better called digital operations platforms (DOP) to reflect their artificial intelligence (AI) and experience-driven nature, as well as the critical role they play in cloud-based digital businesses. The right digital operations platform is one that allows a manufacturer to quickly react to external factors impacting the business, along with the agility to implement operational innovations that help maintain a competitive advantage.
When selecting a modern ERP system, manufacturers should consider the following criteria:
Depth of industry and business processes
Today’s manufacturing operations are complex, and it takes an entire internal and external ecosystem to keep things running smoothly. When selecting an ERP system, manufacturers should make sure it’s built to manage the complete manufacturing operation—from financials and strategic planning to shop floor management, quality control, and scheduling. In addition, the ERP system should be designed to meet the unique needs of the manufacturer’s industry. This could mean built-in tank scheduling for brewers, or federal security compliance for US aerospace and defense manufacturers. Modern ERP systems need to be flexible, cloud-based systems that can expand along with a manufacturer, whether that expansion includes adding new services or opening new operations around the globe.
A modern manufacturing ERP system leverages technology that goes beyond enabling manufacturing operations. It should serve as a unifying foundation for the business ecosystem—with capabilities such as business analytics, enterprise asset management (EAM), and even a built-in commerce network. Depending on a manufacturer’s particular needs, an ERP system should be able to seamlessly integrate with other, more specialized applications, such as product lifecycle management (PLM), human capital management (HCM), and product configuration tools.
A manufacturer should be able to easily configure its full digital operations platform around its ERP system with complementary applications that address its specific industry and operational needs. Ideally, industry-specific capabilities should be built directly into the ERP system, enabling the manufacturer to focus on the specific, key processes that are truly unique to its business. With modern ERP systems’ reliance on configuration instead of customization, manufacturers would benefit from continuous cloud upgrades with no coding needed, allowing for future flexibility as their business needs change over time.
Security and risk management
Support for complex workflows
The right ERP system will help a manufacturer maintain a competitive advantage and business approach. The platform needs to be able to accommodate the rapid development of enterprise capabilities tailored to the manufacturer’s unique business requirements and workflows. A modern ERP system should support extensibility that enables manufacturers to build their own applications and mobile apps, and automate unique workflows that are built for a manufacturer’s specific business needs.
A modern ERP system should be intuitive and easy to use, and not require that users need extensive knowledge of complex source codes or programming languages to extend the software. It’s critical that any extensions of the system continue to work when updates or upgrades are deployed. And because today’s workforce is mobile, the ERP system should be optimized for use via desktop, tablet, and smartphone.
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Collaboration with suppliers and customer ecosystems
The ERP system that a manufacturer selects needs to be able to work beyond the enterprise—connecting the full technology ecosystem that includes customer, supplier, and partner applications.
Manufacturers have a number of principal responsibilities within these ecosystems: setting priorities; planning and executing supply chain strategies; driving incremental improvements, while quickly adapting to changing market and customer requirements; and linking changes in demand to changes in supply, while being mindful of the financial results. By enabling seamless communication between all stakeholders, the ERP system can help enable increased productivity, efficient decision-making, fewer errors, and improved customer satisfaction. Legacy ERP systems, on the other hand, often create an environment of unstructured communication, which causes confusion and a lack of collaboration between supplier and customer ecosystems.