How ERP Solutions Can Address These 5 Manufacturing Problems
The demands of the modern economy have placed a lot of pressure on manufacturing to speed up operations. Like many businesses, manufacturers operate on tight margins and need to stay profitable. Adopting a modern technology solution like enterprise resource planning (ERP) software can solve many of the problems apparel producers face. With the help of an ERP, common manufacturing issues associated with inventory control, material planning and gaps in data can be erased.
ERP software integrates all the disparate processes and software services a business uses. It allows enterprises to handle inventory and order management, accounting, human resources and customer relationships from a single, unified platform. A manufacturing ERP like FDM4’s provides even more functionality, which is crucial to all aspects of production — including assembly time and labor tracking, the bill of material and job routing.
1. Inventory Control
Avoiding too much and too little inventory is a constant balancing act for most manufacturers. Another common issue that is just as challenging is knowing how much of a material or finished product you have in stock. When it comes time to reorder materials from your suppliers, you have to account for lead times, which often vary by vendor.
An ERP tracks your inventory right from the sales order and flags deficiencies so you can restock quickly. Because an ERP gives you complete visibility into every item entering and leaving your facility, you can lower your minimum and safety stock levels. You’ll have more liquid assets to work with and can save on storage space for a leaner, tighter operation. At the same time, you’ll minimize out-of-stock situations by knowing exactly when to reorder so you can always meet demand.
While planning replenishment orders, you’ll also be more equipped to handle surplus inventory. Whether it’s due to a decrease in demand or another reason, catching excess stock right away gives you more options for correcting it. For example, you can return the items or strike a deal with a customer, so the surplus doesn’t go to waste. Knowing about overstocks early with alerts from your ERP lets you avoid disposing of the items.
An ERP can also track inventory turnover and customize your turnover reports for the most useful, segmented data. Track turnover by customer to ensure you’re providing the best outcomes for each client. Group items with limited shelf lives or seasonal demand to keep their turnover data separate from evergreen products.
FDM4’s ERP is equipped with many inventory tracking features specific to manufacturing. You can track standard versus actual materials used by job to root out waste in your processes. You’ll also gain insight into your work in process inventory.
2. Inaccurate Reports
Your company needs reports on many aspects of the manufacturing process. For example, inventory managers need aging reports. The order processing team needs shipping and customer documents. The financial department uses inventory and sales data for accounting, while upper-level management needs an overview of the company to make strategic decisions. All these functions have individually designed software options to match. The common problem for manufacturing is — all these applications rely on the same data.
When a manufacturing business keeps information in disparate systems, pulling reports that meet each team’s requests is time-consuming and prone to errors. Further, the networks might have duplicated data, each missing information from the other. Reports then have to be validated and verified, which takes time.
An ERP keeps all your data in one place, so anyone who needs data can grab exactly what they require. The system offers a user-friendly self-service reporting system. Users can pull reports without involving other departments or information technology. It’s fast and easy to pull reports for customers or regulators.
An ERP visualizes data in an integrated system, drawing on enterprise-wide data from across departments. It updates with every transaction for more accuracy.
3. Lack of Planning and Scheduling
Every aspect of your facility needs efficient planning. Careful management allows you to align production schedules with deliveries and shipments. To plan everything accordingly, you need 100% visibility into your sales forecasting and inventory. Then, you can make sure staff, equipment and raw materials stock are ready to go when production increases.
Forecasting allows you to create a plan further in advance, so you spend less time scheduling shop floor activities. With an ERP, you have dynamic insights into future sales, current inventory, expected procurement, Available to Promise (ATPs) and Projected Available Balances (PABs).
4. Material Requirement Planning
Manufacturing resource management requires knowing what materials you have on hand and what resources you’ll need to complete a job. Then, you can schedule production and order supplies as needed.
An ERP for manufacturing encompasses all the intelligence you need to optimize capacity, components and material resources. It can do these things using sales predictions, open orders, bills of materials, historical production data and your production schedule all consolidated in one place.
FDM4’s ERP features a highly customizable multi-level bill of material solution. It makes it easy for production facilities to analyze the materials needed and accurately estimate labor rates for orders. With effective material resource planning enhanced by an ERP, you can reduce outbound cash flow by investing less in unnecessary materials and resources — and increase profitability.
5. Real-Time Information
An ERP updates whenever a sale goes through, a batch ticket is created, a purchasing order is requested, new production begins or any other transaction occurs. By combining all data into a single system, it stays up-to-date and actionable at all times.
Consider how real-time data influences order processing. In an ERP, customer orders arrive with the production, picking and packing teams as soon as they come into the system. You can then eliminate revenue loss due to inaccurate batch ticket fulfillment. Plus, it integrates data from major shipping companies like UPS and FedEx so orders can ship out at the price and speed that works best for your customers.
Likewise, the purchasing team can access reports, price quotes and inquiries in real time to gauge customer demand and replenish inventory levels appropriately. The process can even be automated by setting purchasing rules. When inventory declines to a set point, it can be automatically replenished in the exact amount you want. Plus, with real-time data from vendors, the purchasing team always has the correct delivery time and costing information on hand.
With an ERP, you’re not pulling data from batch tickets, accounting software, sales orders and other software to gain meaningful insights. It’s all in one place, in real time when you need it.
Try FDM4’s ERP Software
See for yourself how an ERP solves manufacturing’s toughest issues with FDM4. We offer an ERP solution tailored to the needs of the apparel and textile production industries. For non-apparel enterprises, we also have a flexible, feature-rich ERP that can solve many of the common problems that abound in every sector of manufacturing.
Whatever your enterprise needs to stay ahead, our ERP has a solution to help you grow quickly. Request a live demo today to see it in action.