ERP Reduces Manufacturing Costs While Increasing Capabilities

While 2020 was a challenging year for various industries, efforts to bring the economy back to pre-pandemic levels are finally gaining ground in many areas across the United States. Manufacturing was hit particularly hard by the onset of COVID-19, where mandatory facility shutdowns, global travel restrictions, and an inability to perform critical operations remotely significantly impacted business, often grinding manufacturing to a complete stop.

However, with hundreds of millions of COVID-19 vaccines administered (and steadily climbing), manufacturing businesses are starting to rebound as economies slowly reopen and look to take advantage of the 6.9% revenue increase projected for 2021, recouping any losses over the past year by cutting costs.

Enterprise Resource Planning is one way manufacturers can reduce their costs, so here we’ll look at some of the benefits that ERP systems bring to manufacturing industry operations.

Data Analysis

One of the most important operations carried out by ERP systems solutions is advanced analytics. Meticulous record-keeping is essential for manufacturers, from accounting to inventorying and everything in between. Supply chain analytics can help a business gain insight from the large amounts of data associated with the procurement and distribution of goods, while predictive analytics can help with strategic decision-making activities. Predictive analytics can be applied to specific markets, analyzing trends, and factoring in global data to ensure procurement costs stay low and sales stay high.

Remote Operations

Maintaining safety will continue to be a dominant industry trend throughout 2021, particularly as more areas move quickly to reopen fully. The best way to ensure an employee’s safety is to give them the ability to work remotely. While manufacturing companies must complete certain tasks in-person, they can run the business’s administrative operations from an off-premises location. ERP solutions provide this access while ensuring system security from independent devices.

Interdepartmental platforms integrate, reduce the risk of data loss or transferal errors, and reduce IT personnel’s cost. Many ERP systems automate routine tasks, reducing associated manual labor costs while increasing efficiency and overall productivity.

Inventory Management

Inventory management is another critical area that an ERP solution can assist with to help manufacturers lower costs. Automated inventory tracking provided through ERP systems can help ensure that incoming goods are used effectively while minimizing the time that produced goods take up valuable floor space. Advanced analytics provide:

Better inventory data means better data analytics, providing a company with improved cost breakdowns essential for identifying an area of cost reduction opportunity.

Overhead Costs

Reducing overhead is a challenge for manufacturers, but ERP systems can help. Automating processes means less billable manual labor hours, and manufacturers can optimize equipment maintenance to minimize depreciation. Smart floor mapping can ensure that facilities are maximizing space and that expensive resources are utilized efficiently. A cloud-based ERP system won’t take up valuable facility space or generate expensive utility costs and, in fact, reduce costs associated with business systems maintenance.

ERP Solutions for Manufacturers

Investing in ERP solutions for a manufacturing business is an investment in the longevity of the company. Experts predict that a full economic recovery will take years, so keeping costs low will continue to be an important issue for some time moving forward.

Finding the right ERP solution for your business is important, so take the time to research available products and consult with industry specialists to find the manufacturing ERP that meets your needs.

If you already have an ERP system in place, analyze what it is doing for your business and compare it with what you expect it to do. If your system isn’t performing the way you hope, see if optimization is a cost-effective option that’s right for you.

Your software vendor is your partner in getting what you need from this technology upgrade, so make your decision only after thoroughly vetting your vendor options. With how costly ERP, MES, and QMS can be, you should make sure you aren’t paying for more than you’ll ever realistically use. Ideally, you’ll find and select a vendor with expertise in your industry and a track record of servicing companies similar to yours.

e2b teknologies is your partner for next-generation Sage enterprise software to help save you time by automating business processes and streamlining workflows. Sage’s ERP systems boost productivity while keeping costs down, resulting in a more competitive, agile, and responsive operation.

Contact our team of ERP experts when you’re ready to begin your ERP software evaluation process.
Find out how we can take you to peak performance on the warehouse floor, in the accounting department, and across your entire footprint with Sage.


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April 22, 2021 Manufacturing Aimee Schossler