ERP: What is the Value to Your Manufacturing Business?

The definition of ERP

Before we define ERP, let us start with the acronym which stands for Enterprise Resource Planning.  We can define ERP as enterprise software that helps organizations manage their day to day business requirements. At a fundamental level, ERP brings together customer management, human resources, business intelligence, financial management, inventory, and supply chain capabilities into one system.

An ERP system can drive significant performance improvements in manufacturing, distribution, and financial management as well as significantly reducing risk. ERP helps to drive business behavior by empowering users with business-critical insights for quicker analysis, decision making and helps businesses integrate their processes across all business functions.

An ERP system eliminates the problem of duplicated data by providing a single source of the truth as it stores all data in an available database, allowing all departments to work with the same information.

History of ERP

The ERP software industry has been in existence for over thirty years. Its reason for being is that companies had been struggling for a long time to manage their complex business processes, and they would often need to hire different specialists to manage these processes across each department.

The term ERP came into existence in 1990 and was introduced by Gartner. Before that, some of the technology within ERP was developed as far back as the 1960s, but back then, it only applied to inventory management and operations management for manufacturing. Eventually, engineers rolled out computer programs that monitored inventory, reconciled balances, and produced status reports.

By 1970, it had been developed and improved, incorporating Materials Requirement Planning (MRP) for production scheduling processes. Between 1980 and 1990, modern ERP software was being adopted by other industries, as the functionality had extended well beyond its roots in inventory management and other operational controls for the manufacturing sector.

Today ERP software, or enterprise software as some prefer to call it, is implemented across a multitude of diverse industries and it manages the complex processes of millions of organizations of all sizes, all over the world, including manufacturing, healthcare, non-profit groups, construction, and hospitality. Organizations that need to manage their staff, customers, and inventory can all realize the benefits of ERP.

Why you need ERP and the value to your business

Now that you understand what ERP software is and the origin of the ERP industry, it is important to know why an organization would need to use an ERP platform like SYSPRO’s. The short answer is that ERP systems are used by organizations that are looking to manage their business functions within a centralized and integrated system.

If growth is a big part of your business game plan, you need to think about the strategies that will help you to manage your workflows. Before getting into an ERP implementation, you should understand the business value of ERP. Some of the main benefits ERP software can bring to a business include improved business insights, reduced risk, lower operational costs, improved efficiency, smarter working, better collaboration, improved financial reporting and compliance, automated core business processes, and enhanced customer service.

For those who have never used ERP before, they need to understand why it is important to their business. But as globalization and the impact of the global pandemic, it is essential to find ways for your business to gain a competitive edge with an industry-built ERP solution designed to fit your business now and into the future. The benefits of ERP will far outweigh the initial cost, time, and effort involved in implementation.

By Jakes Mantle (SYSPRO author)