Manufacturing & ERP – 6 areas of benefit.

Trying to convince a manufacturing company on the benefits of Social Media is really difficult – there are some basics in the factory that need fixing first.

Often, an ERP can help – here are SIX areas it could help:

  1. Use of Legacy Systems
  2. Compliance with Laws and Regulations
  3. Business Processes
  4. Impact of Mergers and Acquisitions
  5. Outsource/In-source Initiatives
  6. Limitations of IT Infrastructure

More Information is available via the Gartner Magic Quadrant – Manufacturing and Compare ERP Systems Guidebook

Use of Legacy Systems: Many medium and large companies were in existence prior to the availability of comprehensive software solutions. These companies sustained their business activities by using several small software products, which were not well integrated, cost-effective, or user friendly, and which generated large amounts of unstructured data. These relic systems, known as legacy systems, cannot meet the complex needs of today’s medium and large manufacturers and are largely obsolete. However, many companies continue to use them.

Compliance with Laws and Regulations: As companies continue to expand their businesses to new products and frontiers, the more complicated it is to comply with local and international laws and regulations. This is particularly important to the manufacturing sector, where there’s potential to affect all major activities, from procurement and production to distribution and retail, asset management, and human resources.

Business Processes: Medium and large companies must continuously adapt to the ever-changing business environment by defining new workflows and procedures and restructuring existing ones. As companies become larger, more people, assets, and partners will be involved in any change dictated by the market, not only draining the company’s resources and finances, but also exacerbating the logistical complexity of defining, testing, and implementing new business processes across multiple business units.

Impact of Mergers and Acquisitions:  Through mergers and acquisitions, companies realize growth and expand their business activities. During this process, however, companies must integrate the operations of different departments, plants, or sites, which often operate in different languages and regions, and use different business processes and software solutions. This process becomes only more complicated as the size of the companies involved in the deal increases. And any issues that remain unresolved following a merger or acquisition have the potential to derange all entities.

Outsource/In-source Initiatives: Globalisation and the need to reduce production costs have forced some companies to move some or all of their production facilities to a country with lower labor costs. Companies with headquarters and subsidiaries or plants on different continents can face difficulties in managing activities, such as quality control and delivery time.

Limitations of IT Infrastructure:  Despite the potential advantages of software-as-a-service (SaaS) solutions, such as no need for supporting hardware or IT personnel for maintenance, medium and large manufacturers often use a combination of SaaS and on-site solutions—if not only on-site. However, large businesses still face several limitations with cloud computing due to their size, scale of businesses, and previously deployed solutions.

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