ERP for manufacturing: Now more than ever

Why are so many manufacturers prioritizing cloud ERP today? Recent years have brought significant transformation and disruption to manufacturing and supply chains, leaving even the most efficient companies feeling challenged. Additionally, expanding partner networks for sourcing materials have increased business risks and reduced visibility. As customers demand faster service and more customization, legacy systems are struggling to keep up. While global disruptions are familiar in this industry, their scale has reached unprecedented levels.

Many organizations are stretching their traditional ERP systems to the limit, attempting to manage daily operations such as supply chain, logistics, and finance. To adapt and succeed in these unpredictable times, manufacturers are seeking integrated solutions that provide the connectivity and visibility needed to manage operations and share data across the business on a unified platform.

What is Cloud manufacturing?

What can AI-powered manufacturing ERP software offer?

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

To conquer both cultural and process-based challenges, the best companies are focusing on a few core priorities, and modern manufacturing ERP software with AI can help in these 4 ways:

1. Collaboration & Coordination: It's no secret that silos and opacity are bad for business, especially in distributed operations like global supply chains. To achieve true agility and resilience, manufacturers need to collaborate with external suppliers, partners, and business networks, as well as their own internal teams. A manufacturing ERP provides unified access and visibility, allowing teams to share strategic plans, ideas, and data in real time. It also centralizes data and intelligence, enabling better coordination among departments and partners to meet changing demands and shorten product lifecycles. For example, when sales and marketing hear about a product innovation, they can prepare a coordinated campaign, while HR can prepare with trained and vetted staff for a new project.
2. Compliance According to a recent study from LexisNexis, corporate compliance-related increased 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 cybersecurity to trade regulations, to HR, modern businesses face a growing and daunting range of global regulations. Cloud ERP systems not only manage and refresh global compliance regulations in real time—they can also help you configure automated process and procedural updates in response to changing regulations.
3. Customer integration
   Traditionally, businesses have gathered and analysed customer feedback in a backward-looking and retrospective fashion. After a few months of observing trends, there would be a decision 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 all it takes is one bad experience for almost 80% of customers to move on to another brand. For businesses to thrive, they need to be as responsive as possible to customer 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 want to achieve, they’ll need to look at some of the specific functionalities of cloud ERP to determine how those features can help them meet their goals.

• Integrated Financial & Business Intelligence: An in-memory database with a user-friendly dashboard allows you to customize reports and aggregate disparate data sets. This delivers fast, accurate intel, helping stakeholders make confident decisions without sifting through scattered data or waiting for static reports.

• Intelligent Production & Supply Chain Management: An old adage says that stock is just money sitting around in another form. Cloud ERP functionality helps managers inform their operations with live data from internal departments and external networks. Live MRP scheduling features enable both rapid sourcing and supply during volatile times, ensuring faster reactions to shifts and trends. It also unifies production plans, incorporates MRP, and uses predictive analytics to inform robotics and lean control, making production flow more efficient from end to end.

• Streamlined Design & Quality Management: Manufacturing doesn't start on the assembly line; it starts with ideas. Cloud ERP allows customers, designers, R&D, and production teams to collaborate in real time. It speeds up the process by centralizing and managing smooth handovers of engineering documents and design changes. Furthermore, the ability to run closed-loop quality management processes helps businesses minimize risk and confidently roll out new products. With AI-driven technologies, you can even run what-if simulations or build digital twins to test processes and mitigate risks.

• Accurate Project Planning & Configuration: Integrating various data sets onto a single shared platform helps planners optimize and automate production projects. With machine learning capabilities, the ERP system learns from similar project plans over time, becoming smarter and more accurate. This increased central visibility allows planners to automate 'true actual' costings for highly engineered products and quote more competitively. Additionally, customer-facing, web-based product configurators allow customers to personalize products, with rules-based tools that ensure custom designs are feasible and seamlessly communicated to designers and manufacturers.

Overcoming Manufacturing ERP Implementation Challenges

Implementing a new Enterprise Resource Planning (ERP) system in a manufacturing environment is a significant undertaking, but by addressing key challenges head-on, you can ensure a smooth transition and long-term success.

Data Migration and Legacy Systems

One of the most critical hurdles is the transfer of vast amounts of historical data—including BOMs, customer information, and production records—from disparate legacy systems into a new, centralized platform. This process requires meticulous planning and validation to ensure data integrity and prevent disruption to operations. To solve this, transitioning from outdated systems and integrating modern digital innovations becomes necessary to support scalable, standardized processes.

Architectural Complexity and Integration Issues

Modern ERP transformations often require significant architectural decisions involving cloud platforms, leading to changes in IT landscapes. This complexity demands active involvement from Enterprise Architects. Furthermore, multiple manufacturing systems, BOM sources, and sales systems can lead to poor data handoff, complicating cross-site collaboration and integration with CAD and existing product lifecycle management systems. The solution lies in providing a collaborative environment with features like a Roadmap Report to track ERP transformation progress and support crucial decisions with real-time data and clear visualizations. This aids in creating an accurate target architecture and continuous monitoring.

Manual Processes and Employee Training

Paper-based processes with limited guidance can create errors, especially in environments with skill shortages and workforce fluctuations. Managing operations manually becomes challenging as product lines grow complex. By integrating with modern digital manufacturing capabilities, real-time guidance and AI-powered visual inspections can be implemented to enhance manual operations and reduce errors while ensuring agile responses to changing production needs. However, the most advanced system is only as good as its users. Therefore, a comprehensive training program is essential. The best solutions offer not only the software but also dedicated support to ensure your team is fully prepared and confident in using the new system, maximizing adoption and a smooth transition.

Scalability and Business Continuity

For decision-makers, minimizing implementation complexity and ensuring a smooth transition are paramount. A successful ERP implementation is not just about technology; it's about reassurance. Leveraging cloud ERP allows for standardized processes across global operations, with improved integration of AI and robotic process automation, realigning workflows with global best practices for efficiency and scalability. This approach not only provides the necessary flexibility and scalability for future growth but also demonstrates a commitment to business continuity. Partnering with a provider that offers strong support and comprehensive training ensures you can manage risk effectively and maintain operational excellence throughout the entire transformation.

The Right ERP for Your Industry: An Intelligent Approach

Choosing the best ERP for your business is a strategic decision that goes beyond general features. The most effective solutions understand that a chemical manufacturer has different needs than a consumer products company or a maker of industrial machinery. An intelligent manufacturing ERP provides the flexibility and scalability to support a wide range of industries, from discrete to process manufacturing. SAP's manufacturing ERP offers deep, industry-specific functionalities built on a unified platform.

• For Industrial Machinery, integrate various manufacturing processes, such as make-to-stock and engineer-to-order, to streamline supply chain management and improve supplier collaboration.

• For the High Tech sector, enhanced global trade functionalities and crucial integration with CAD and MES systems to meet complex manufacturing demands.

• For Aerospace and Defense, the focus is on automating manufacturing operations to improve product compliance and safety across lifecycles, and enabling better project, subcontracting, and asset maintenance management.

• For the Automotive industry, addresses the challenges of global competition and complex configurations, helping to manage customized vehicle solutions and reduce development lead times.

• For Agribusiness, handles complex farming requirements and fresh produce processing, with solutions for quality management and integration with third-party systems to optimize production planning.

This unified yet industry-specific approach allows you to address your unique challenges without the headache of multiple, disconnected systems. An intelligent ERP system learns from your business processes, providing real-time insights and automation to help you navigate market volatility and drive sustainable growth.