Technology

The Future of ERP - And How it Will Impact Manufacturing

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Enterprise Resource Planning (ERP) technology has long been a staple for manufacturing organizations that wish to streamline operations and hasten inventory and warehouse management while improving customer service. However, with the advent of new technologies, ERP implementations are about to get dramatically better. These new technologies – including cloud computing, mobile solutions and real-time business intelligence/analytics – along with new advances in warehouse automation -- will empower manufacturing organizations like never before.

In fact, these new ERP innovations will allow manufacturers to completely jump-start their operations. For example, in the very near future, manufacturers will rely on mobile networked devices and on-demand software to increasingly enable the seamless integration, tracking and optimization of key tasks from inventory, shop floor and management all the way to capacity and materials planning and product quality control.

Manufacturers focused on growing their businesses must consider implementing these ERP advances in particular:

Mobile

Mobile is emerging as a critical technology for manufacturers that wish to empower their remote workers while improving customer service and satisfaction.  One leading manufacturer of insulated industrial outerwear relies on VAIs S2K Sales Force application so that the outside sales staff can use smart phones and tablets to directly view sales patterns, notes, previous sales, inventory levels and past appointments prior to visiting clients.  They can also enter more notes or place orders in real-time – which are all immediately visible to the back office.  This resulted in a major productivity boost for the manufacturer.

Business Intelligence and Analytics

Most manufacturers are not leveraging their own internal data to their best competitive advantage. In fact, these organizations often have valuable data scattered throughout their enterprises without a proven mechanism to find, track and recover exact components of data in real-time – necessary for making more intelligent decisions on-the-fly as well as keeping abreast of competitors, sales forecasts, inventory changes and market trends.  Next-generation ERP technology will get a boost from new advances in analytics and business intelligence solutions that will give manufacturers the ability to rapidly uncover the right data sets while providing intelligence on how to act on that data based on the situation at hand.

Warehouse Automation

ERP solutions will be further bolstered by warehouse automation advances that offer such important capabilities as RFID tracking and integration with voice-pick solutions.

New advances in ERP will give manufacturers the ability to analyze large data sets to more effectively drive innovation, productivity and efficiencies.  According to a recent study by the McKinsey Global Institute, a major retailer leveraged the power of Big Data to improve operating margins by more than 60%.  And, McKinsey believes that the manufacturing industry can benefit in a similar fashion by leveraging data-driven strategies to innovate, compete and capture value from both deep and up-to-the-minute real-time information. 

There are new technologies that can dramatically improve operations and inventory management for manufacturers of all sizes.  These advances will transform the role of inventory management from a record keeping tactic to a more strategic business asset by driving major improvements in overall productivity while eliminating costly mistakes in the warehouse.

On the shop floor and in the warehouse, many manufacturers are already using RF scanning to improve performance and overall productivity.  By implementing RF scanning alone, manufacturers can automate the entire warehouse and shop floor, improving performance across all key areas including: receiving; directed put away product movement; picking; packing order verification; returns refused shipment; raw materials issue production; bin replenishment; warehouse transfers; file set-up; and, cycle counting.

With RF scanning added to their ERP implementations, warehouses will uncover seven powerful ways to hasten the order fulfillment process by:

  • Integrating systems
  • Automating picking
  • Driving better shipment planning
  • Automating shipment verification
  • Reducing paperwork
  • Managing warehouse capacity, and
  • Incorporating sales into the process

 

For optimal warehouse automation, there are traditional approaches that companies can utilize – most notably fixed stations and check out stations for validation.  And, as an alternative to RF scanning, some manufacturers are also using new voice-enabled, label-based and paper-based approaches that have proven to be effective.

With so much innovation across core ERP functions critical to manufacturers, now is the right time for organizations to explore how these advances can further modernize and streamline operations, inventory and warehouse management, sales and accounting, among others.  Forward-thinking manufacturers should consider adopting new mobile cloud, business intelligence and analytics capabilities in order to stay ahead of the curve and the competition.

 

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Discussion
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sunita1234
sunita Chaudhari 0 Points | Thu, 06/12/2014 - 12:11

Its fantastic to read something on Future of ERP. I really like this post. ERP system focus on small and medium enterprises to solve the business requirements, function do very fine, the system is very flexible, also can second development, can adapt to the long-term development of the enterprise.Thanks for sharing.

erp applications

emmageorge91
Emma George 12 Points | Tue, 10/29/2013 - 07:26

Web based ERP is definitely a debatable topic because it has its benefits and drawbacks. The main benefits of web based ERP includes the feature that it can be accessed & utilized from anywhere in the world where there is internet access and a browser. Access can be ensured with a security code and interaction is fast and effective.

Robglenn
Rob Glenn 3 Points | Wed, 09/04/2013 - 06:46
Comment has been flagged as Inappropriate.
Warren
Warren Burns 11 Points | Wed, 06/27/2012 - 02:43

The Real future of ERP

ERP will become a background process.  It will fade into the background and will become plumbing.  Similar to networks have done over the last decade.  

Loosly associated industries will see potential in providing services that generate insight into the transaction characteristics of their customers much as the clearance houses did to disrupt commodities and futures markets in the late 1800's.  They will be able to execute transactions at a scale and cost that makes in house transaction processesing untenable.

Mobile - you are right.  Mobile will become the predominant form of interaction with line of business processes.  Location awareness will generate additional context for process execution and ERP processes will evolve away from batch processing towards real time.

User interface will be decoupled from the ERP vendor.  A one size fits all UI will be replaced by role specific (transaction code aware) user interface that compliments ERP data through inclusion of external data, customer data and other compliamentary data sources that improve the ability to make decisions in real time.

Warehouse automation - Service orientation will reduce the focus on this by driving it to a service provider activity.  Easy gains have already been taken, the point of diminishing returns is just around the corner for all but the very latest players in the game.

No one pays extra for a house with fantastic plumbing, but they will pay less for a house with terrible plumbing.

 

WB

jdodge
John Dodge 1367 Points | Tue, 06/26/2012 - 17:43

Kevin, welcome to Enterprise CIO Forum. What's the bottom line of all these technology advances? Carrying inventory for hours instead of days? I can see the benefits as far as you go,  but what is the bottom line that only a CFO and customer could love? 

Kevin Beasley
Kevin Beasley 19 Points | Wed, 07/11/2012 - 20:29

Hi John - Thanks for your reply! To answer your question... With the combination of mobile, business intelligence (BI) and warehouse automation advances, the bottom line benefits are greater and faster turnover in the warehouse and less inventory overall – which makes organizations much more profitable and efficient. By tying everything with mobile, salespeople can meet customer needs and secure new business faster and more efficiently than ever before. And when you bring in BI and analytics, organizations can do a much better job of forecasting from both a sales, inventory and purchasing perspective. Specific benefits to manufacturers include the ability to reduce overall costs and aggregate sales. By leveraging a three-pronged approach with mobile, BI and warehouse automation, organizations dramatically improve profitability, inventory management and customer service.Hope that makes sense, but let me know if you have any additional questions.