At a glance
A modern ERP system forms the backbone of the digital transformation in series production: It copes with increasing variant diversity, enables sustainability and IoT integration and puts an end to global supply chain risks. This enables efficient, agile and future-proof production
Series production is facing disruptive changes. Customers are demanding individualized products, volatile markets are making planning more difficult and the search for skilled personnel is increasingly becoming a feat of strength. In order to remain competitive, there is no way around the digitalization and automation of production. The digital transformation, in turn, brings further hurdles with it.
The good news: if you have a modern ERP system in place, you are ideally equipped for change. Thanks to smart functions, your company will not only defy current challenges. By integrating new technologies, you are also fit for the future. In this article, you will find out in which areas an ERP can already support you today and which technology trends will keep you effortlessly in the fast lane.
How to master current challenges with an ERP
1. mass customization: individualized series production
The customer is king – and their expectations are higher today than ever before. Whether it’s an individually configured new car, a tailor-made cabinet or a custom-made precision screw, both private and business customers increasingly expect personalized products. At the same time, they do not want to do without short delivery times, low prices and high quality.
The main problem here is that in individualized series production, the number of item variants is increasing while the number of items is decreasing. Each variant comes with specific information, such as master data, material lists and production plans. As a result, data complexity increases, which leads to errors, production delays and increased costs.
A modern ERP system reduces this complexity by:
- Variant management
- The software collects all relevant data on a central platform and makes series production controllable across all areas.
- It enables the automated linking of customer configurations with production processes, stock levels and supply chain processes.
- With the help of configurators and rules, the ERP system automatically checks which combinations are profitable and feasible.
- Dynamic parts lists
- Dynamic parts lists have a modular structure and adapt to the respective product configuration.
- An ERP system automatically generates the appropriate parts list based on the selected characteristics. The manual management of many static lists is no longer necessary.
- The software takes logical dependencies into account. For example, it recognizes that a panoramic roof can only be combined with a reinforced body structure.
- Flexible production planning
- Based on the individual parts list, the ERP system automatically calculates the material requirements, the production steps and the production costs.
- The software orders the right materials, allocates the required machines and schedules important personnel for assembly. In the event of changes, it makes the appropriate adjustments.
- As an ERP system manages capacities, delivery times and resources in real time, bottlenecks or delays can be avoided.
2. sustainability in production
Whether it’s high electricity prices, the Supply Chain Act or increasing customer demands in terms of environmental friendliness: even small and medium-sized companies can hardly avoid the topics of sustainability, energy efficiency and resource conservation. Even if they are not directly affected by legal regulations, they still have to assume ecological and social responsibility. Not least because large companies often demand this from their suppliers and subcontractors.
One thing is clear: sustainable series production does not start with production. Rather, a holistic view of all upstream and downstream processes is required – from the procurement of raw materials to disposal. Transparency along the entire supply chain is essential for this. This is the only way to obtain the evidence that customers, partners and authorities require. Centralized, digitalized data management forms the basis for seamless monitoring.
An ERP system supports the achievement of sustainability goals:
- As a central data hub, the ERP system enables seamless traceability of raw materials and production processes.
- The software records and analyzes energy consumption and CO₂ emissions along the entire value chain.
- The system carries out a sustainability assessment of suppliers based on environmental standards and certifications.
- Software-supported demand forecasts and efficient inventory management prevent overproduction and material waste.
- Data analysis enables companies to optimize machine running times and energy consumption. Intelligent maintenance plans reduce unnecessary energy losses.
3. the Internet of Things (IoT) and Industry 4.0
In series production, physical objects are increasingly networked with each other via the Internet and equipped with sensors. Machines continuously exchange operating data, which is generated and stored in real time. This results in enormous amounts of data, which are initially worthless in themselves. Only with the help of powerful IT systems is it possible to use the data profitably.
However, big data tools alone cannot generate any practical added value. They are able to search data streams for anomalies in real time. However, they cannot convert the data into meaningful key figures. This requires software that interprets the data to create value.
An ERP solution puts IoT data into a practical context:
- The ERP system collects and consolidates IoT data from various machines and sensors in order to make it usable in a structured way.
- By linking with IoT platforms, the software provides real-time insights into production performance and machine statuses.
- It uses sensor data to dynamically adapt production processes in order to increase efficiency.
- IoT data on material availability is used to optimize stock levels and automatically trigger repeat orders.
4. global supply chains
From natural disasters to geopolitical conflicts: Anyone working with international suppliers must expect blocked transportation routes, material shortages and congested ports. This can affect the timely supply of stock, meaning that orders cannot be fulfilled on time. Added to this are strongly fluctuating currencies and raw material prices, which make production costs difficult to calculate.
In order to identify bottlenecks at an early stage and respond flexibly to market requirements, companies need to monitor the global supply chain digitally. Otherwise, there is a risk of production downtime, delivery delays and rising costs.
An ERP system reduces the risks of global supply chains:
- The software evaluates suppliers based on criteria such as quality and punctuality.
- Thanks to real-time inventory control, the ERP system automatically triggers orders before bottlenecks occur.
- Deliveries can be tracked worldwide so that companies can react to delays in good time.
- In the event of material shortages, the software suggests alternative suppliers or transportation routes.
- The system takes price fluctuations and currency risks into account in order to optimize procurement costs.
An ERP system plays the all-important key role in digitization.
Technology trends you should know about
In order not to miss out on the competition, maximally efficient processes, the lowest possible costs and maximum flexibility in series production are essential today. Such competitive top performance can only be achieved by integrating pioneering technologies. Companies are already using the following innovations today:
1. artificial intelligence (AI)
In a volatile market environment, precise forecasts are essential for profitable series production. Although no human can see into the future, the use of artificial intelligence in ERP software enables astonishingly accurate predictions. These allow manufacturing processes to be designed even more profitably and provide a decisive competitive advantage.
When analyzing data, the technology not only accesses historical information such as machine capacities, weather conditions and sales figures. It also takes current market trends into account. In this way, it can forecast supply bottlenecks, create optimized production plans and adjust stock levels, among other things.
Let’s take the example of a car manufacturer who wants to predict demand for electric vehicles:
- The AI recognizes a 20 percent increase in demand in summer and adjusts production planning accordingly.
- At the same time, the ERP system orders batteries, chips and other components in good time to prevent bottlenecks.
- In turn, management receives AI-supported simulations of various production scenarios that show the effects on costs, delivery times and resource consumption. This makes it easier for managers to decide whether to pre-produce more vehicles or schedule additional suppliers, for example.
2. predictive maintenance
Predictive maintenance means something like “predictive maintenance”. By analyzing sensor data, manufacturing companies can monitor the condition of machines and detect signs of wear at an early stage. This makes it possible to plan preventive maintenance measures as required. The ERP system not only analyzes the machine data in real time, it also links the maintenance processes with production planning.
Let’s imagine that an automotive supplier uses sensors on milling machines:
- The ERP system analyzes the sensor data and detects increased vibrations. This indicates that a failure is imminent.
- The software proactively schedules maintenance outside of peak production times and orders the required spare part.
- As a result, predictive maintenance avoids unexpected production downtime, extends machine service life and saves maintenance costs.
3. digital twins
A digital twin is a complete virtual copy of a process, object or system from the real world. It can either stand alone or be connected to its physical counterpart. Digital twins are often used for monitoring and analysis, but also for simulating and controlling processes and machines. By connecting them to an ERP solution, companies are able to optimize production processes and avoid expensive downtime.
In the automotive industry, for example, it could look like this:
- Every new car is given a digital twin during production, which stores data on materials, production steps and quality controls.
- Sensors on robots and assembly lines transmit real-time data to the ERP system.
- The ERP system uses the data from the digital twin to flexibly adapt production processes.
Conclusion: ERP systems as a game changer in series production
Modern series production is no longer just about manufacturing products in large quantities. Today, companies must be able to produce an immense number of variants of a product profitably and sustainably – while also mastering the challenges of a global market environment. This is a mammoth task that is vital for survival and cannot be accomplished without innovative technologies.
An ERP system plays the all-important key role in digitalization. By mapping a large number of industry-specific processes, it can optimally plan and control resources and workflows in multi-variant series production. In combination with AI, it makes precise predictions and ensures highly efficient production processes. So that you are still competitive tomorrow.
