Many manufacturers that already have an enterprise resource planning system in place will likely hold on to it as long as they can. Part of the reason has to do with the cost of initial implementation and remembering how long and drawn out the whole project was. There's also the risk that workers will feel as though the new system will either harm the way they function or be seen as an excuse to lay people off. This puts companies in a conundrum, even when there are options such as Microsoft Dynamics NAV. However, without making some changes, these shops and warehouses will likely fall behind the competition. Taking a perspective of overall operations, businesses should be looking for signs that it may be time to change.
Manual where there should be automatic
One of the general purposes of using an ERP system is to complete processes efficiency through automation of specific points, such as creating a bill of materials for an order or locating specific parts in inventory. However, the use of manual workarounds for items that should be done automatically is the first sign that the software has aged for far too long. This is especially the case if the workarounds in question involve, in any way, spreadsheets or other manual documents. These are often riddled with errors that can greatly impact how the business functions.
Another area where manual entry should not be present is in matters of compliance. There are certain tasks required of a business to meet regulations such as the Sarbanes-Oxley Act and the tax code requirements. If these entries are being done manually, then it's proof that a company is out of touch with new trends in ERP software, which handle these processes automatically in the cloud, according to tax firm Avalara.
Answering the right questions
Of course, there's more to ERP than simple automation. Consider the impact of a centralized database. One of the major changes that the cloud brought is accessibility. With proper protocols in place, any employee can access the right data anywhere. However, a company should ask if that's a good idea, but more important what level of accessibility is necessary, especially in comparison to what is already in the system. If there's a lot of siloing going on, in that only certain departments have access to specific information, it may be time to switch to the cloud for better collaboration in operations.
Still, it's important to consider what kind of data is accessible on the cloud, as suggested by TechTarget. Companies should ask whether the information that will be stored in the cloud is safe enough to be there, be it general documentation of customer information. With this in mind, a manufacturer can then determine what data should be stored there as well as what type of hosting solution to use. A public solution may not be the best ideal, so a private host may be of better interest to the business, or a hybrid combination that keeps certain data on-premise. Whatever the solution, the business will be better off and looking ahead.
Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.