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Why Manufacturing Enterprises Need to Use ERP Systems

Enterprise resource planning (ERP) gives manufacturing organizations control over every aspect of production and performance. Advanced data tracking mechanisms and consolidation of all data points into one overarching software system helps executives monitor every step in the manufacturing process.


In high-paced environments,  ERP for pharmaceutical companies can put the business a step ahead, and facilitate accurate, informed strategizing. Today, we'll look at the benefits of an ERP for contract research organizations and other competitive sectors to explain why it is a must.

The Advantages of an ERP in Production and Manufacturing


ERP solutions are comprised of several integrated business management tools, which capture, quantify and compare metrics from each element of the manufacturing organization, including:


  • Product data management
  • Production planning
  • Compliance controls
  • JIT stock management
  • Total quality management
  • Forward forecasting and scheduling
  • Managing product life cycles


The functionality of an ERP means that data is available at any time showing productivity levels, performance versus targets, and broader business intelligence. Being able to assess critical data with full customization options and scalability means that manufacturing issues such as bottlenecks, late consignments, or production downtime are significantly less likely to result in contract delivery failures or lost revenue.


Next, we'll examine each benefit a little more closely to explain how these are achieved with an ERP system.

Improved Productivity 


An ERP network allows even very complex schedules to be amended quickly and systematically, with changes rolled out organization-wide as required. Resource optimization ensures that one department isn't fighting for resources with another–even inadvertently–because the business can break down large data sets and use these for tactical decision-making.


Examples of productivity gains owing to effective ERP would be:


  • Streamlined financial operations with synchronization between availability and capacity and sales processes
  • Integrated data shared between departments that is visible and accessible to all relevant employees
  • Tightly managed manufacturing plans, combining master schedules with material requirement planning to ensure the right components and supplies are available in the right place at the right time


Production managers have comprehensive information available to track manufacturing and allocate resources or personnel to provide greater flexibility and low-waste productivity.

Cost Savings


Many organizations steer clear of technological innovations for fear of the investment cost, but a quality ERP can pay dividends in cost reductions. Automating tasks and consolidating information eliminates the time required to trace supplies, revise schedules or search for product data and overcomes the risks of manual error.


Powerful ERP solutions avoid investing in multiple software packages, allow more work to be completed in less time, and free up middle management and IT teams to focus on other areas.


Why are ERP systems used for contract developments, though? The decreased costs and boosted profitability for a manufacturing firm with an ERP system allow for additional tasks to become automated, such as creating standardized contract terms or flagging contract non-delivery. This is time-efficient for supply chain managers and improves contract quality and parity.

Advanced Monitoring and Forecasting


One of the biggest challenges in a manufacturing business is forecasting and recognizing indirect factors that may result in increased demand. Planners can encounter difficulties whenever demand surges, perhaps due to seasonal trends, and they do not have enough supplies to keep pace.


ERP systems generate accurate, data-based forecasts and sales reports, minimizing stock-outs or excess inventory and breaking down complex data into digestible, intelligent reporting. With no need to manually analyze data, or spend hours compiling reports, planners and supply chain managers can move quickly and decisively when needed, with all the intelligence they require funneled directly to them through the ERP solution.

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