Manufacturers already remain under immense pressure to continuously optimize capacity, reduce operating costs, satisfy ever-changing customer requirements, and manage supply chain dynamics. In addition, they have to focus on managing the four major resources that make manufacturing come alive. Process manufacturing revolves around the 4Ms of efficiency: Manpower, Materials, Machines, and Money; usually called the resources. These are the 4Ms that are majorly responsible to influence the aspects of manufacturing.
Resource management is the function responsible for the coordination of planning, sourcing, purchasing, moving, storing, and controlling materials in an optimum manner in order to deliver the desired product to the customer at a minimum cost. The goal of resource management is to provide an unbroken chain of components for production so as to manufacture goods of quality standards well on time.
Enterprise Resource Planning (ERP) solutions play a crucial role in formulating effective and efficient resource management plans with a more holistic approach towards achieving a sound and uninterrupted production cycle. This blog tells you how with the help of an ERP software a manufacturer can easily overcome the resource management issues faced in the everyday life.
Companies can use an ERP system to maintain and manage the entire employee set, along with producing and tracking performance metrics, vacancies, and streamlining salary and wage schedule. An ERP software can assist the HR function in identifying the prospective candidates, tracking them, and finally hiring to be the part of an effective workforce. It can enable companies to analyze employee role across departments, and practice employee rotation according to their capabilities. Performance evaluation can also be done with the help of an ERP system as employee efficiency can be mapped against each candidate and variable compensation plans can be created to encourage exceptional performances. ERP integrates core business processes in real time, making database management simple and efficient in the long run.
One of the major challenges before manufacturers are maintaining a consistent flow of materials for uninterrupted production. Material management by ERP systems can help forecast the finished goods requirement based on trends, demands of finished goods, and production schedules. Based on these product requirements, manufacturing ERP solution suggests the when what and how much of the raw material should be procured to keep the production going without halts. In fact, it is perhaps the need of the hour to adopt an ERP system for material management to keep up the pace warehouse, inventory carrying and inventory maintenance costs low and thus profits high.
ERP systems not only help in overcoming inventory accuracy problems, which result in avoiding production shortages, unnecessary halts, and often last-minute inventory adjustments; But also in deciding the best vendor and supplier based on the time of delivery, quality and cost of materials. Materials management by a manufacturing ERP solution can help in planning and designing for the delivery, distribution, storage, and collection of any number of materials required by your company. ERP software leaves no room for incorrect Bills of Materials (BOMs), inaccurate cycle counts, un-reported scrap, shipping errors, and dispatching/receiving errors; thus the entire material management is organized and synchronized without any wastage of material.
Machine or asset management is a systematic process of developing, operating, maintaining, upgrading, and disposing of machines or instruments deployed during production, cost-effectively. ERP software is capable of planning machine utilization to use them to the fullest while taking into account the setup, queue, maintenance and other times. By efficiently calculating the work-centre cost per hour, suggesting the possibility of routing and sequence of operations, and managing cost-centres for individual work-centres, ERP solution ensures that any kind of productivity losses are kept at bay.
An ERP solution can, in fact, fetch the necessary production instructions and also execute them with complete perfection. The record keeping of all the operations helps the system to locate the deviation from the prescribed roadmap. In case there is any deviation detected from the prescribed plan, it can result into a detailed root cause analysis and is extremely useful in employing a corrective action plan procedure in the upcoming set of production. Thereby, efficient machine management by an ERP software helps manufacturers save a lot of money and efforts.
Finance lays the foundation of any manufacturing business. Sound financial planning and management is the crux of sustained growth amongst the competitors. Financial management by ERP systems offers a holistic view of company finances that enables monitoring of working capital and ensures a firm grip on enterprise-wide costs. ERP software can provide real-time in-depth financial insights and analysis reports so that you take the right decision at the right time. Besides, it can also take care of financial fact sheets, trial balance, company ledgers, and bank/cash transaction entries. Ultimately, ERP solutions help companies optimize their financial operations, cut costs and increase profitability along with maintaining financial harmony across the organization.
Conclusion: The new-age ERP software equipped with capabilities that provide comprehensive resource management is a must to gain profits in today’s dog-eat-dog competition. You can use the system to optimize and track the requirement of raw materials, human resource, assets, and financial opportunities. These reliable systems can greatly optimize resource utilization, improve billable utilization, enhance productivity plus operational efficiency, cut wastage and costs, increase client satisfaction and consequently raise profit margins.