Choosing new software can be difficult for any business. In addition to the cost, founders and decision-makers must research the software’s reputation, assess its capabilities across a wide range of desired functionality, and choose a software that will meet company needs without having an enormous learning curve.
Smaller companies are often at a disadvantage and IT professionals may not be on staff. Additionally, the extensive capital outlay for new systems may not be feasible for smaller manufacturers. As a result, the business owner or decision-maker risks choosing a system that is too weak or too strong, or one that has such a deep learning curve for already overtaxed staff that full functionality may never be realized.
There are many benefits to implementing an ERP system for a small company. Let’s take a look at them in detail!
For one, the company may need to replace an older system or one that was manually managed since the early days. Many small businesses often use cobbled together systems or legacy applications brought over by staff from previous jobs.
An ERP system can replace an older system with increased functionality and analytics to allow accurate and best practice materials management throughout the company.
Secondly, an ERP system can eliminate “fragmentation”. Fragmentation occurs when a company uses numerous software systems from department to department to accomplish the initial growth experienced by the enterprise.
The problem arises when the company scales and product offerings and manufacturing volume begin to exceed the combination of different systems’ capabilities for providing organization and control of production processes as well as back-office functions.
In many cases, fragmented software systems may not “talk” to one another, and reporting between the systems may have to be manually reconciled. As manufacturing volume increases, an ERP system can eliminate fragmentation, integrating the material and business controls into a single platform with real-time data and analytics.
Finally, a company may have diversified its product line with new and more complex iterations that explode the associated bill of materials required to produce. This bogs down the planning and purchasing required to feed the bill of materials and introduces inefficiency into the operation that extends throughout the manufacturing process.
An ERP system can process the data and provide clear, organized, and automated functionality to manage core business functions and operate manufacturing efficiently and with the right level of material availability.