How Does ERP Help Small Manufacturing Businesses Grow?

The global pandemic has brought significant changes in the manufacturing industry. To grow, small manufacturers need to rethink their production processes and consider digital solutions.

Many small-scale manufacturers are ready to go digital but investing in a new ERP system raises some concerns for them. It may be the cost of a new system, the time involved to research solutions and implement, the employee learning curve, not understanding the ROI, or something else. But businesses that invest in an ERP solution can increase efficiency, productivity, and profitability to help them grow.

ERP software offers real-time visibility into the organization. Overlooking a $1.00 item could cost your business thousands of dollars. From tools used on the shop floor to production components stored in warehouses to million-dollar, heavy-duty machinery, ERP helps you manage and maintain resources across all departments.

Let’s dive into why ERP is important for small and midsize manufacturing companies. In this blog, you will learn:

• Why ERP is important to help increase productivity for small and midsize manufacturers
• How ERP eliminates siloed data and provides a 360-degree view of business operations
• How ERP enables leaders to make data-driven decisions with Business Intelligence tools
• How small manufacturers can achieve agility with an ERP system
• How ERP improves quality control for greater production and a better customer experience
• Why ERP software is better for reporting, tracking, and managing resources
• How ERP software can help to grow your business

Technology keeps evolving and organizations incorporate technological innovations to help them improve and grow. Modern ERP provides automation, robust analytical tools, and production forecasting to maintain the minimal inventory levels needed to meet customer demand.

The global ERP software market is projected to reach $78.40 billion by 2026, growing at a CAGR of 10.2% from 2019 to 2026.

Why is ERP important to help increase productivity for small and midsize manufacturers?

Small manufacturing companies have limited staff members who wear multiple hats. ERP helps managers streamline operations, from managing resources to creating reports to scheduling tasks.

ERP gives real-time visibility into how various business departments (i.e. production, warehouse, sales, procurement, quality control) and resources are performing and bridges information gaps across business operations.

ERP allows manufacturers to do forward scheduling to produce a greater quantity of goods in a faster amount of time. During the pandemic, small manufacturers have had disrupted supply chains. ERP for small manufacturing businesses helps them mitigate supply chain risk and achieve growth. They can forecast inventory demand by analyzing historical patterns and sales orders.

How does ERP eliminate siloed data and provide a 360-degree view of business operations?

We live in a data-driven world where it is impossible to make a business decision without having well-documented data. Gathering data from disparate systems is often time-consuming, costly, and error-prone. Investing in Enterprise Resource Planning software can save countless hours and millions of dollars down the road.

ERP helps companies consolidate information across departments in one database, allowing manufacturers to make quick business decisions by using a visual presentation of key information with dashboards, customized tools, KPIs, and personalized workflows. With ERP, you can check critical business reports, manage shop floor tasks, and track the movement of goods.

Investing in a well-integrated, comprehensive ERP is the most effective way to overcome data silos and enhance visibility. You can align your teams, improve communication, and get a 360-degree view of business operations.

How does ERP enable leaders to make data-driven decisions with Business Intelligence tools?

Business Intelligence (BI) is a technology-driven process that uses business analytics, data mining, and visualization tools to transform data into actionable insights. Organizations can analyze historical data and patterns to see business opportunities. This information gives small manufacturers a competitive edge.

BI enables decision-makers to get a clear view of how each department is performing and if there are any issues. BI dashboards allow them to evaluate performance metrics and uncover trends. With analytics, role-based dashboards, advanced cash flow forecasting, Available-to-Promise reports, etc., ERP for small manufacturers fosters better performance.

How can small manufacturers achieve agility with an ERP System?

Agility can be defined as the organization’s ability to renew, adapt, change, and succeed in the rapidly evolving business world. ERP for small companies promotes agility by:

• Delivering business intelligence data 24×7
• Encouraging business process improvements
• Leveraging mobile technologies
• Offering automation for reduced errors and fast-paced production
• Utilizing cloud architecture and modular design

Small-scale manufacturers need to be agile to adapt to rapid industry changes. To ensure your business performs better than your competitors, you need close-knit connections and enhanced communication with customers, vendors, and employees that an ERP system provides.

How does ERP promote quality control for improved production and a better customer experience?

ERP provides a single platform to:

• Discover quality defects and resolve them with corrective and preventive actions
• Run QC tests and capture results from anywhere using mobile devices
• Meet industry, regulatory, and customer requirements
• Integrate quality data to the necessary departments for traceability and greater control

Why is ERP software preferred for reporting, tracking, and managing resources?

A few years ago, creating and compiling reports took hours and days for employees in small organizations. No matter how intense your business data is, with ERP software you can run highly complex and data-intensive analysis in real-time. ERP software enables high-performing dashboards, reporting, as well as tracking of resources across departments.

Even a non-technical person with minimal training can produce reports (forecast data, sales, demand tracking, item demand and forecast, period summary, etc.) within seconds. Reports created with an ERP system are clear and to the point.

Reporting tools in ERP software provide a basis to establish, measure, and analyze your business performance. You can accurately extract, aggregate, and analyze information from various sources and make more informed decisions.

How can ERP software help you stay ahead of the competition?

Moving to a modern ERP system can bring multiple business advantages. These include increased ROI, better customer satisfaction, more employee efficiency, and greater flexibility. As you embark on the journey of selecting ERP for your business, be sure to learn about ERP selection criteria, deployment (cloud, on-premise, or hybrid) options, and cloud ERP benefits.

Why are small businesses moving to cloud ERP?

Small and midsize businesses are increasingly investing in cloud ERP platforms because it requires a minimal startup cost and is billed in monthly payments which includes maintenance and upgrade costs. Cloud ERP is quick to implement, and you don’t need any hardware or the involvement of IT staff.

How Cloud ERP benefits small and midsize manufacturing companies:

• Faster implementation
• Rapid disaster recovery
• Reduced operating costs
• Simplified complexity
• Continuous vendor support and maintenance

Wrap up

The major goal of small-scale manufacturers is to produce maximum quality goods with minimal investment. With ERP solutions, manufacturers can overcome business challenges, produce quality products, reduce costs, and ensure better employee collaboration.

If you still have any confusion about how ERP software can help you overcome your small business challenges, you can download our brochure, ERP for Small Manufacturing Businesses, or get in touch with one of our experts.