What are the Uses of ERP?
Enterprise resource planning (ERP) systems are used by organizations looking to manage their business functions within a centralized and integrated system. ERP is commonly used by companies working within the supply chain to help keep track of all the moving parts of manufacturing and distribution. However, ERP can be utilized by a number of different industries including those in healthcare, nonprofit groups, construction, and hospitality. Organization needing to manage their staff, customers and inventory can all rely on ERP benefits.
ERP stores all entered data into a single database, allowing all departments to work with the same information. Additionally, all this data can be organized, analyzed and made into reports. ERP systems bring together customer management, human resources, business intelligence, financial management, inventory, and supply chain capabilities into one system.
1. More Money Saved
Although many vendors have introduced flexible pricing in recent years, ERP packages are still a big investment. For many, the large costs alone can make it seem unlikely that the program would end up saving your organization any money at all. But once you get past the sticker shock, it’s easier to see how ERP systems can provide an excellent ROI.
2. Improved Collaboration
The features of ERP applications can vary slightly depending on the program you are using, but generally, all systems improve collaboration in some way. As mentioned before, the centralized database is an integral part of what makes an ERP unique. With this database, you provide your company with a single source of truth to work from. This reduces any errors brought on by working with the incorrect data, further reducing costs.
3. Better Analytics
A central database of information also aids in improving your analytics and reporting. Since ERP records and stores all the data users input, it makes for an excellent business intelligence tool. As long as your vendor provides strong functionality, ERP software makes it easier and faster for your team to generate various reports. Reports that could take days of research and compilation without an ERP takes just minutes.
4. Improved Productivity
With traditional methods, tedious tasks are completely unavoidable. Tasks like generating reports, monitoring inventory levels, timesheet tracking, and processing orders have historically taken employees hours to accomplish. In addition to taking up time, these processes lower employee morale and open yourself up to a human error. After the umpteenth hour of entering the same line of data into different forms, even the best staff members are bound to make a mistake.
5. Improved Inventory Monitoring
A major challenge for growing companies is tracking and monitoring their expanding inventory levels. ERP systems utilize barcoding, RFID tags and serial numbers to keep tabs on your inventory at every stage during the supply chain. These tools help you keep track of inventory levels at different warehouses, which items are in transportation and which items are on the shelves ready for consumers. The increased warehouse visibility optimizes the pick, pack and ship process greatly, removing all the guesswork.
6. Improved Production Planning and Resource Management
Along with managing your inventory, ERP systems also manage to manufacture. ERP provides insight into all manufacturing operations including the shop floor. This enables users to optimize production schedules, equipment and labor to maximize capacity.