No longer the exclusive tools of global enterprises, modern cloud-based ERP systems are allowing many more manufacturing businesses to join the ERP party.
For decades, the world’s biggest and most successful manufacturers have recognized the value of ERP. Thanks to the emergence of pioneering solutions from providers like SAP, large enterprises wholeheartedly adopted integrated ERP systems to optimize their operations and grow their businesses.
But not every business made the jump to enterprise ERP. Rightly or wrongly, many smaller companies believed they needed to reach a certain size and scale before they could justify the complexity and cost of adopting market-leading solutions.
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That left many of the world’s mid-sized manufacturers in a kind of self-imposed ERP limbo. Large enough that they stood to gain massively from an integrated ERP system. But still ‘too small’ (or so they believed) to run and maintain ERP software on their own hardware.
A barrier to growth
These perceptions still exist today. And they can be a significant barrier to growth.
Let’s not forget that midsize manufacturing companies are the bedrock of modern economies, not to mention the world’s supply chains – across high-tech, industrial, mill products and many other sectors.
They may not be as well-known as their larger peers, but these businesses are often highly innovative, profitable and fast-growing. In fact, it’s been estimated that manufacturers in the United States have outperformed some of the biggest companies in the world over the past decade.
Without access to modern ERP systems, however, these companies are often left with a fragmented collection of different software solutions and paper-based practices to manage their businesses.
Making these different systems work together can take a lot of ‘human glue’, with employees’ manual efforts substituting for a lack of native digital integration. In extreme cases, we still see people having to print information out of one system in order to manually re-enter it into another.
In an increasingly digitized world, this is clearly unsustainable. Aside from the obvious impact on individual productivity and operational efficiency, it prevents the business getting a real-time end-to-end view into the true state of its activities. Let’s not forget it also slows the ability to innovate and grow.
Cloud changes everything
The good news? Cloud is fundamentally rewriting the ERP script for smaller businesses.
New software-as-a-service ERP solutions are allowing manufacturing businesses of all shapes and sizes to access market-leading ERP tools without having to maintain their own hardware.
It’s hard to overstate the significance of this shift. Cloud is democratizing access not only to the basics of an integrated ERP system, but also the latest and greatest innovations such as AI-powered analytics and automation.
Not only that, but leading Cloud ERP solutions also now come with preconfigured best-practices across numerous manufacturing processes. So midsize manufacturers can start to enjoy the benefits of standardized data and automated workflows across the full breadth of their businesses.
Intelligent operations
Consider the impact cloud-solutions have on data visibility and decision making. When operational and business data is locked away in different systems and paper records, it can be almost impossible for employees to make use of its insights.
But when they have a real-time view of all the information relating to financial, accounting, human resources and customer activities – accessible via user-friendly dashboards and visualizations – those insights are suddenly liberated.
What’s more, the latest Cloud ERP solutions can also provide prescriptive insights, smarter analytics and even artificial intelligence, including ‘what-if’ ERP simulations based on a complete and real-time view of operational and financial data.
So, for example, the system can not only highlight stock outages during an MRP run, but also suggest various different solutions – delaying the order, offering an alternative product, using a different material – and simulate the financial and customer impact of each one.
Driving real change
For midsize manufacturers in particular, having proactive insights like this can be transformational – it’s not surprising that more businesses are making the shift to Cloud ERP.
Look at Wuzhen-based FlexTOUCH Technologies, a manufacturer specializing in next-generation flexible metal mesh touchscreens. By implementing Cloud ERP, it not only cut its IT maintenance costs in half, but also improved business access to data. The firm went on to see a 30 percent increase in production capacity.
Slovarm, a specialty component manufacturer based in central Europe, is another example. When it decided to replace its aging ERP system and spreadsheet-based planning with a new Cloud ERP solution, it was able to reduce its work-in-progress and final-stock inventory by 60 percent. It also doubled its production throughput and transformed data visibility for production planning teams.
Examples like these show how cloud-computing is providing much-needed access to the very latest ERP solutions for a new generation of midsized manufacturing businesses.
Cloud ERP is fast becoming the critical ingredient for taking these manufacturers to the next level – helping them transform quicker, innovate faster, pivot to new markets with newfound agility and, ultimately, grow exponentially.
