Do Small businesses really need an ERP System ? Are Manufacturing ERP for small business affordable ? This is still a big question among the SME sectors. There were days when ERP software was used by large industries to meet their increased demand and handle complex business processes. But now the technology has evolved enough to serve almost everyone’s business purposes. The most important fact that we should realize is that “Growing organizations rely on ERP systems”. A company opts for a software tool to further improve their business growth. All large companies once started from a smaller one, but it’s the business strategies and decisions we make that results in the growth. Hence any enhancements made in a growing company shows a huge difference in business efficiency.
Gone are the days where companies used excel sheets and did manual processes for each and every activity. Nowadays everything has become online and digitized. Customers are more preferred to use digital platforms for all their requirements which is quite easy and more transparent. With this trend, of course the companies must also adapt to serve the customers their way to survive in the market.
Now coming to manufacturing ERP for small business, in general every manufacturing industry deals with a much more complex process. From sales order, invoicing, purchasing, inventory management till production and delivery there are numerous activities to be handled irrespective of the size of the company. Any errors made at some point will surely affect the progress in production. All these difficulties can be overcome by using an ERP system.
How do you know it’s time to upgrade to an ERP System :
Despite all the factors and needs there will still be confusion whether it is the right time to make such an investment in the business. Here are a few questions to ask yourself that will help you make a wise decision.
- Is your data consistent and centralized between all your team ?
- How sure are you that there is no duplication or error in the data ?
- Feeling difficult with integrating several tools for each purpose ?
- Are you able to retrieve any specific data quickly without any confusion ?
- Can you be able to predict a better forecast on the sales orders ?
- Is your inventory well managed and up to date with exact numbers on your hands ?
- Is the purchase and transactions transparent between relevant departments ?
- Are you able to deliver your products on-time for every order ?
- Do the quality standards are met in every aspect in the company ?
Benefits of ERP for Manufacturing Small Businesses:
Information Flow :
When ERP is implemented and once the data has been fed, it is unchangeable by employees. The access is given only for the department heads to feed the day to day activity. This ensures that every employee is working on the same page. This may prevent many mismatches or duplication in data that will impact the production. Imagine you have got an instruction for additional numbers in an existing project. This information has to be passed on to every department to ensure the process happens as per plan. But what if one department fails to receive, for example the inventory department. This will end up having insufficient resources for the production causing a delay in delivery.
Productivity Enhancement :
Since all the data is fed into the software tool, any information can be retrieved within a single click under a single screen. This eliminates the need to go and contact the respective employee, getting the sheets and searching for the relevant data. Hence a huge amount of time is saved from all these extra activities. This could increase the efficiency of man hours thus improving productivity.
Reduced Operation Costs :
While using a spreadsheet for all your activity there are more chances that one can miss an important entry, or transaction. As a result of these confusions a delay in order might occur, purchasing of materials may not happen on time and missing a transaction details creates chaos in the company. Obviously this is not a healthy organization structure and causes more interruptions in production leading to wastage of money. But using the ERP system provides you an error free working structure.
Timely Decision Making :
With consistent data flow and streamlined processes the communication between all the hierarchies is improved. The managers as well as the employees are very well aware of the entire structure which facilitates better forecasting of the orders. With all these transparencies the management is able to take the timely and wise decision that could help the business enhancement. In other cases, a purchase department can raise a request for a new purchase and get approved on time without causing any delay to their production process. These instant approvals on the go, with the use of cloud based software can save more time.
Better Forecasting :
Once you have your collection of data it is easier to make predictions out of it. Moreover the ERP system has the automation feature where it can give you the prompts and notifications regarding future orders and how to manage it. This prediction will be based on all your previous orders and production quantities.
Conclusion :
ERP is a software tool designed for business optimization irrespective of the nature and size of the company. The technology has been evolved enough to provide more industry specific and affordable software to every industry and organizations. Although there are many software in the market, a successful implementation totally depends on the company. It is important to make sure you have a clear plan and complete historical data readily on hand before opting for ERP implementation.
