Why is cloud ERP for manufacturing at the top of so many companies’ to-do lists at the moment? To begin with, the enormous change and upheaval that manufacturing and supply chain operations have experienced in recent years has left even some of the best-run companies feeling overwhelmed. Also, the need to shift to ever-expanding partner networks for supplies and materials is leaving businesses exposed and short-sighted. Increasing customer demands for speed and customisation are causing outdated systems to struggle to cope. Global disruptions—while nothing new in this sector—have nonetheless been on an epic scale lately.

Many businesses are pushing their legacy ERP systems to the limit, trying to manage their day-to-day operations including their supply chain, logistics and finance operations. To not only cope—but thrive—under these changeable conditions, today’s manufacturers are seeking solutions that unify, connect, and coordinate—giving them the visibility they need to manage their operations and share data across the business on a single, shared platform.

What can AI-powered manufacturing ERP software offer?

In the modern manufacturing sector, business leaders are faced with myriad challenges, but once they have identified their problems, what separates a good business from a great business is how quickly they set about finding the right solutions—and finding ways to get ahead of their competitors.

To overcome both cultural and process-based challenges, the best companies are focusing on a few core priorities, and modern manufacturing ERP software with AI can assist in these four ways:

1. Collaboration It’s no secret that silos and lack of transparency are bad for business. Everyone agrees, yet it remains a widespread problem—especially in distributed operations such as global supply chains and manufacturing. The world (and your clientele) moves at a faster pace than ever before, demanding more and moving on quickly when they cannot get it. To achieve true agility and resilience, manufacturers need to collaborate with external suppliers, partners, and business networks—as well as the specialist teams and relevant departments within their own organisation. ERP for manufacturing provides teams and partners with the unified access and visibility they require to share strategic plans, ideas, data—and to collaborate in real time on any aspect of manufacturing operations.
2. Co-ordination Product lifecycles are getting shorter by the day. There is increasing pressure to customise items and service, and to improve sustainability across the supply chain. Every link in your manufacturing value chain—from raw materials to final packaging—has an impact on other operational areas. A cloud ERP for manufacturing enables you to coordinate partners and departments, providing them with the centralised data and intelligence they need to respond to changing pressures and demands. For example: When HR knows a major project is approaching, they can be prepared with trained and vetted staff. When sales and marketing hear that a product innovation is underway, they can prepare early with coordinated campaign and marketing plans.
3. Compliance According to a recent study from LexisNexis, corporate compliance-related costs increased by almost 20% from 2019 to 2020. And more than 89% of that global total (of over $213 billion) was borne by North American and European companies. From cyber security to trade regulations, to HR, modern businesses face a growing and daunting range of global regulations. Cloud ERP systems not only manage and update global compliance regulations in real time—they can also help you configure automated process and procedural updates in response to changing regulations.
4. Customer integration
   Traditionally, businesses have gathered and analysed customer feedback in a backward-looking and retrospective manner. After a few months of observing trends, a decision would be made to update a product or service or to improve the customer experience in some way. But today, customer loyalty is more capricious than ever. Bloomreach research shows that almost 80% of customers will switch to another brand after just one poor experience. For businesses to prosper, they need to be as responsive as possible to customers' needs. Cloud ERP solutions are helping to drive this by supporting faster real-time data analytics and more agile production processes. This enables product customisation to individual customers’ specifications, drives new business models, and helps to nurture customer relationships beyond the initial transaction—providing tailored service and support as part of a continuously learning circular economy.

What do the best cloud manufacturing ERP systems actually do?

Once business leaders have identified the challenges they face and the outcomes they wish to achieve, they will need to look at some of the specific functionalities of cloud ERP to determine how those features can help them meet their goals.

• Business intelligence: An in-memory database with a device-friendly dashboard enables ERP users to easily customise reports and aggregate disparate data sets to deliver fast, accurate intelligence. This enables C-suite stakeholders to compile all the information they need to make quick, confident decisions without having to search through large amounts of data scattered across departments, or wait ages for reports.
• Financial management: Whether in the boardroom or on the factory floor, business leaders need to keep a close eye on the bottom line. Access to accurate, real-time financial data and reports is essential. Manufacturers using cloud ERP benefit from a faster financial close, more accurate job costing, and the ability to consolidate finances and expenses all in one place, in a globally consistent format.
• Material requirements planning (MRP) and production: An old saying goes that stock is simply money sitting around in another form. For centuries, manufacturers have struggled to have sufficient (but not excessive) raw material and stock on hand. For as long as this has been a problem, its solution has involved curating information from a lot of different yet relevant sources. With cloud ERP functionality, managers can inform their operations with live data from internal departments—as well as external data from supplier networks, customers and even news and weather reports. Live MRP scheduling features help businesses ensure both supply and rapid sourcing during volatile periods—enabling significantly faster responses to changes and trends, and the ability to remain connected to business and supplier networks in real time.
• Simplified and leaner production and assembly: The drive for leaner manufacturing is leading companies to simplify production and assembly processes. Cloud ERP systems help to unify assembly plans—incorporating MRP, production and capacity planning, bills of materials and routing. Predictive analytics also contribute to this process by informing robotics and robotic process automation (RPA), and mapping machine models and factory floor layout. When production and material flow are automated from end to end, the most efficient manufacturing methods can be implemented, such as lean control, continuous improvement, and just-in-time replenishment.
• Streamlined design and engineering: Manufacturing does not begin on the assembly line, or even with the raw materials—it begins with ideas and inspiration. Designers and engineers bring new products to life, and market researchers and data analysts help to ensure that those products are as closely aligned as possible with their customers’ hopes and wishes. In the past, it took a long time for this information to be shared and acted upon, and much of it was eroded and lost like a whispered word in a game of Chinese whispers. But today, cloud ERP enables customers, designers, R&D, and production teams to collaborate in real time. It also speeds up the process by helping to centralise and manage smooth handovers of engineering documents, bills of materials, design changes, and other relevant global documentation and specifications.
• Rigorous quality management: The best quality management (QM) processes are data-driven and objective. The ability to run closed-loop QM processes—from planning to operations—within an ERP helps businesses minimise risk and more confidently launch new products and services. Moreover, AI-driven technologies can assist managers in running customised what-if simulations or creating digital twins with which to test any possible situation. This means that virtual machines and processes can be pushed to their absolute limits, without any cost or risk to valuable physical equipment. This QA and testing feedback can then be broken down by specialist area and shared with the relevant teams across the business to support continuous improvement and risk mitigation.
• Accurate project planning: Exploring new projects and expansion opportunities should not have to involve any more risk or speculation than absolutely necessary. Integrating various data sets from across the operation onto a single shared ERP platform helps planners optimise and automate production projects. And when machine learning capabilities are added into the mix, it means that the ERP system will learn over time from similar project plans, becoming smarter and more accurate as it progresses. With this kind of increased central visibility and end-to-end data capture, planners can automate ‘true actual’ costings for highly engineered products and projects. This not only adds value and reduces costs across the final outcome, but it also gives your business negotiators greater confidence to narrow margins and quote more competitively with less fear and risk.
• Product configuration: It is one thing to be responsive to customer feedback and reviews, but what if you could allow your customers to personalise products at the click of a button? Today, customer-facing, web-based product configurators supported by cloud ERP are enabling customers to bring their ideas to life. Moreover, these tools are rules-based and structured. This means that only realistic, feasible, and relevant customisations can be made. It also means that those customisations are digitally communicated to designers and manufacturers in ways that are globally consistent and designed to work with existing operational processes.
• Future-proofing and scalability: Newspapers, telephone boxes, wristwatches. Every day, something old becomes obsolete and new objects and technologies start to trend. Where once the cycle of obsolescence may have taken decades, it now seems to take just months, weeks, or even days. For manufacturers, this not only means they have to keep their ears to the ground, but that they have to be able to rejig and pivot their existing operations rapidly and frequently. The reconfigurations can have an enormous impact across every department of a business. However, with cloud ERP solutions featuring AI and machine learning capabilities, operational changes can be identified and automated throughout the organisation. Moreover, the best in-memory databases are virtually infinitely scalable, to support not only rapid change but also rapid growth and expansion.

The best ERP for manufacturing: Is it worthwhile?

These days, C-suite executives and other budget-holders face enormous pressure to quickly establish value and benefit for their enterprise software investments. Furthermore, they are being asked to achieve increased output from reduced budgets and to make purchasing decisions that deliver maximum ROI to the organisation. The temptation is to take a sticking plaster approach and keep bolting lower-cost APIs and third-party manufacturing solutions onto a legacy ERP. Is this solution less expensive? Yes. Does it work? Sure… until it doesn’t.

Traditional ERPs with disk drive databases were not designed to handle the kind of real-time, AI-powered analytics and end-to-end coordination your supply chain requires to compete in today’s world. Business is not going to become less competitive. Customers are not going to become more patient and easy-going. Inflation and increasing materials costs will not lessen the pressure on your bottom line. The saying “penny wise, pound foolish” has never been more appropriate. Once your business and your customers have outgrown the capacity of your legacy ERP and outdated processes, you can only play catch-up at that point.

Cloud ERP for manufacturing and beyond

The future of manufacturing lies in the cloud—it depends on speed, accuracy, efficiency, and global, real-time transparency. A cloud ERP with a powerful database is a versatile and invaluable tool for connecting and aligning your entire business—and for delivering the competitive edge that you need to stay ahead of the competition in the manufacturing sector.