Digital Transformation & the Evolving Role of ERP, Part 2: Leveraging ERP for Business Analytics

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In this special blog series, Digital Transformation & the Evolving Role of ERP, we’ll discuss ERP’s new place at the heart of Manufacturing’s digital transformation. From business analytics to artificial intelligence and the Internet of things (IoT), you’ll learn about the cutting-edge technologies disrupting how manufacturers do business.

Blog-2Turning raw operational data into actionable insights used to be a time-consuming task requiring a high level of expertise. And if you chose to do the analysis in house rather than hiring a consultant, your only option was expensive business intelligence software that had to be purchased separately before being integrated with your ERP system (if it could be integrated at all).

Today’s leading software vendors now offer business analytics as a built-in component of their ERP packages. In fact, business analytics is becoming so synonymous with ERP systems that some say the distinction between them is beginning to blur.

Are you making the most of your ERP system’s business analytics functions? Here are three areas where we have seen the biggest returns.

 

Productivity & Performance

When an issue arises somewhere in your supply chain, it has the potential to seriously impact your manufacturing timelines. Being able to quickly identify the problem area is critical to an effective and efficient resolution.

Data-driven ERP systems make it easy to get ahead of issues by facilitating up-to-date monitoring of your business’s key performance indicators (KPIs). Home screens can be tailored to each user, complete with performance gauges, navigation shortcuts, process flows and advanced reporting tools. C-level executives can get a bird’s eye view of weekly stats, and floor managers can keep up with numbers by the minute. With the ability to home in on unexpected trends and discrepancies, leaders are more equipped to provide proactive problem-solving support in lieu of putting out fires.

 

Sale & Operations

The key to balancing supply and demand is successfully harmonizing your sales activities and your operational capacity. ERP-enabled business intelligence helps integrate sales, production, inventory and finance into a lockstep effort that increases fill rates, better manages your inventory and maximizes profits.

One of the most important tools for sales and operations planning is an annual operating plan (AOP). Having a master plan enables leaders across departments to realize overarching goals for the business at the outset and to monitor performance against those goals on an ongoing basis. An analytics-powered ERP system will assist in identifying supply and demand problems like timely delivery issues, overproduction and shortages for products that are backlogged. You’ll know when you’re falling short of your goals and why – and be given corrective actions on how to fix it.

 

Advanced Forecasting

Successful manufacturers know that their bottom line depends as much upon fulfilling current orders as staying ahead of their customers’ needs. For many companies, this has historically meant trying to predict future stock requirements with error-prone spreadsheets and a padded inventory.

Today’s ERP systems are equipped to automate forecasting and calculations of optimal safety stock levels. Data such as past sales (dollars) and usage (units) are collected and combined with valuable customer or team member input. No more crunching numbers in Excel. Algorithms and what-if analysis allow the data to be processed automatically, and results are displayed graphically to the user. When a new competitor enters the scene or a business opportunity presents itself, forecasts can be adjusted to account for shifting market conditions, so optimal inventory levels can be achieved no matter the circumstance.

ERP in the Age of Digital Transformation

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