6 Common Manufacturing Problems: How ERP Software Solves Them?

July 18, 2022
Nandinee Biswas

In recent years, the adoption of enterprise resource planning (ERP) software has expanded and elevated the manufacturing industry. Once, this solution used to be a back-office IT system only for large enterprises while small and midsize businesses (SMBs) operated outside the shadow of the ERP platforms. Not anymore.

Manufacturing ERP has gained importance, and it is becoming operational to transform the core of organizations. This intense growth of the system is evidenced by its efficiency in solving manufacturing problems and capability of unlocking new opportunities by enabling which is impossible to achieve without having deep insights into the current processes.

What are the Common Manufacturing Problems, and How Does ERP Software Solves Them?

If you own a manufacturing business and are not using an ERP system, a plethora of operational challenges might come your way every day. Take a look at the problems of manufacturing businesses that ERP software could fix:

Data collection error

How fast your manufacturing business grows often depends on how quickly you could access data.

When you choose to record data manually, it could keep you behind your competitors. This is simply because manual data entry is prone to human error and takes a lot of time. They lead to inaccuracies and time delays that could be costly for your business.

ERP solution fixes this. It automatically records data and gives you immediate access to it. Also, regardless of the number of applications you use to manage your production unit, there would always be a single source of information with an ERP system. You do not need to spend your valuable energy and time pulling together fragmented data. The system helps you gain a holistic view of your production process as well as other business operations, including finances, inventory levels, sales forecasts, and so on, at any given time. When you have all the crucial information, it empowers you to improve the overall health of your business.

Inaccurate reports

Lack of real-time information is another significant problem that could be solved by deploying ERP software. The accurate reporting capabilities of the system improve data visibility. This information allows manufacturers to determine pre calculated projections for accurate procurement of raw materials reduce over or under production issues, shorten inventory turn around, and more. Proper usage of this information could help businesses attain more accurate and data-driven decisions. It could improve revenue and profitability.

When you use outdated methods for data handling, you might experience delays in receiving reports and queries. Long delays could increase bottlenecks that could even hold your business back.

Low production quality

Producing quality products is always the top most priority for manufacturing companies. For this, manufacturers require to follow certain quality standards. Among the other challenges, maintaining a standard quality in every lot produced is time-consuming and, at the same time, a complex process.

An ERP system is embedded with quality control tools. It could aid your quality control process in tracking and evaluating the incoming raw materials. The system also helps you monitor product quality through different phases of the production process to offer quality products for the end-user.

MRP Software

Lack of planning and scheduling

Every aspect of your production facility needs efficient planning. When you carefully manage them, it allows you to better align your production schedules with your deliveries. This needs inventory and sales forecasting data as tools to plan everything efficiently. You could prepare the schedules for the shop floor activities and ensure you have staff, equipment, and raw materials ready to start the production.

The absence of workflow planning is a common manufacturing problem, which is why you need an ERP. The system has every data you require to ensure that all the batches are efficiently scheduled to meet the market demands and that raw materials are optimally utilized so that production goes without halts or shortages.

Increasing costs with shrinking profit margins

Rising production cost is one of the most pressing problems for the manufacturers and, if not controlled, could alter the overall sustainability of the business. ERP systems for the manufacturing industry would be the best tool to manage and keep the cost of raw materials, work in progress, or finished goods under control.

The system lets you access vital information about material reorder levels, resources used, administration, and overheads. This way, you could fully utilize all your resources and reduce the accumulation of inventory, thereby minimizing administrative and operational costs.

Changing customer requirements and expectations

The lack of real-time information about the changing market demands is yet another major manufacturing problem that an ERP could solve. The system makes it possible to store critical information and leverage the data in favour of your business’s interest. Without it, you might experience inaccurate procurement of raw materials leading to over or under production, and longer inventory turnaround, causing revenue loss to your business.

With the customer relationship module in ERP, you could analyze critical customer data and gets insights into their buying behaviour. This would help you in production planning according to their needs. The system also supports two-way communication, where your customers could track their order status and share their feedback with you, allowing you to incorporate production changes as per customer desires and offers them improved services.

Get the Best ERP for Your Manufacturing Business

If you are still stuck with manual data entry, you still did not get accurate real-time reports, there are traceability issues in your production unit, and you are wasting a lot of time validating reports from multiple systems, an ERP system would solve these as well as other common manufacturing problems.

Want to find the right ERP system for your manufacturing business? Just fill in the form.

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