Summary: Like many manufacturers, you rely on your ERP system to boost efficiency, quality, and profitability. Read on for some great tips to help your organization maximize the value of its manufacturing ERP implementation.

How to Ensure the Success of Your Manufacturing ERP System

As competitive pressure continues to intensify, manufacturing firms today are spending a tremendous amount of money on ERP solutions to significantly increase efficiency, quality, and profitability. In fact, according to leading industry analyst firm AMR Research, the market for manufacturing ERP software applications grew almost 18 percent in 2007, reaching over $9 billion.

Yet, without thorough planning and a solid strategy in place, some of those manufacturing ERP implementations are likely to fail.

How can your firm ensure success with its manufacturing ERP system?

Collaborate Internally and Externally
Manufacturing ERP systems impact everyone involved in supply chain operations. So, when setting your requirements, evaluating and testing available solutions, and selecting your manufacturing ERP software vendor, be sure to gather input from all vital stakeholders.

Include not only your employees in the process, but your suppliers, distributors, wholesalers, retailers, and other business partners as well.

Cover the Entire Supply Chain
Manufacturing ERP systems are about more than just shop-floor production and related activities. Be sure the application you choose streamlines and enhances the entire supply chain from end-to-end.
Your manufacturing ERP vendor should have the mechanisms in place to support all associated operations, including sourcing and procurement, inventory management, distribution, financial planning and control, and sales.

It’s all About Demand Planning
Accurate and effective forecasting is crucial to the profitability of any manufacturing firm. In order to successfully improve all production and supply chain operations and boost the bottom line, the manufacturing ERP system you choose must provide advanced functionality that leverages cutting-edge statistical and predictive models for forecasting and planning from both a supply and demand perspective.

Customize, Customize, Customize
No two manufacturing firms are alike. Production processes, supply chain structures, vendor arrangements, and other activities will vary greatly from one company to the next. Therefore, “out of the box” manufacturing ERP deployments are likely to deliver less-than-expected results. It is crucial to custom-tailor your manufacturing ERP application to support your unique processes and activities.

Go Beyond Core Manufacturing Operations
Most manufacturing ERP vendors offer applications to support not only production, inventory management, and related procedures, but other key areas of the business as well. Integrating manufacturing ERP applications with other systems throughout the organization, such as accounting, customer relationship management, and human resources, will ensure optimum productivity and cost-efficiency across the enterprise.

Set KPIs – and Measure Them
Most manufacturing ERP software systems come complete with a variety of state-of-the-art reporting and analysis tools. Leveraging those tools to implement a broad performance management strategy is the key to success. Determine what it is you are trying to achieve with your manufacturing ERP implementation. Do you want to minimize cost of goods sold? Perhaps speeding up production time is your primary objective? Are you looking to reduce defects and re-work?

Once you’ve identified the primary business drivers, build a set of metrics around them – and measure them continuously. This will allow you to identify any potential problems and take corrective action before your plan gets too far off course.