Production benefits particularly strongly from an ERP system. After all, if you are still using pen and paper, you are risking your competitiveness. In times of globalization, competition from low-wage countries and digital transformation, hardly any medium-sized manufacturing company can afford to do without ERP support.
An ERP system not only makes core processes more efficient, but also the entire organization: from work on the machines to production planning and strategic decisions at management level.
Manual production planning is no longer efficient
Many companies still organize their production with routing cards and time sheets: Paper slips of paper on which information about the workpieces to be processed, the process status and work already completed, but also delivery dates, article numbers and personal working hours are noted.
In modern production, this slip-based form of organization is too inflexible. If there is a change in the planned process – for example because someone is ill or a machine breaks down – the administration has to redistribute production orders, change time sequences and print out new slips of paper. A colleague then has to run into the production hall, collect the old order slips and distribute the corrected documents.
This procedure is highly inefficient. If there are only a few order changes per week, the additional effort may still be bearable. However, as soon as the number of plan changes increases, a point is soon reached where corrections are simply not made because it is no longer possible to react to every change in delivery dates, material, employee or machine availability.
Routing cards and time tickets are no longer up to date in modern #manufacturing. Today’s production environment is digital.
Workshop production without paperwork
In ERP-supported production, this chaos of paperwork no longer exists. Instead, colleagues at the machines benefit from a clear, digital flow of information.
Typical examples include terminals at each machine that display all relevant order data and work instructions from the ERP system. The machine operators can call up drawings, record measured values for QA, report times, quantities and rejects or make resource bookings. Instead of a pile of paper, your employees only have one screen that serves as a central information hub.
This constellation also eliminates the rescheduling effort that makes the traditional, paper-based production organization so inefficient. If plans need to be adjusted at short notice, you can enter them centrally via your ERP system. The new production orders appear directly on the workers’ screens without any time delay. They receive a corresponding message and can continue working immediately.
Optimize production orders with ERP
Some ERP systems go one step further: they allow production employees to adjust the sequence of their production orders. There are still restrictions due to approval processes and deadlines. But within this framework, colleagues can freely choose the sequence of their orders. In this way, they reduce efficiency losses resulting from unnecessary set-up times.
Let’s take the work of a lathe operator, for example: he may sort his orders by material and raw material diameter at the touch of a button on the terminal. This simplifies the changeover when changing orders and saves time. In surface coating, on the other hand, color changes should be simplified. The employee sorts his worklist from “light” to “dark” and thus reduces the cleaning effort (set-up time).
Production planning and control becomes leaner and more flexible
For production planning and control (PPC ), synchronization with other ERP modules is particularly advantageous. In this context, the most important task of the ERP system is to consolidate and process all relevant order and process data across departments.
At the same time, you receive an overview of the current capacity utilization and free capacities. With just a few clicks, your planners receive information from other ERP areas: current orders, available personnel, delivery times, stock levels, etc. Based on this, they can use the ERP system to carry out rough and detailed production planning and display it in the form of clear planning charts.
An ERP system offers you a faster and clearer flow of information.
If corrections are required, production planning records changes directly in the planning board. The updated data then appears immediately on the monitors of the colleagues at the machines. This speeds up communication considerably. Finally, your team no longer has to make additional trips and explanations, which would be the norm in a paper-based system in the event of a malfunction.
ERP systems therefore ensure that all departments involved in your production processes are more closely linked, thereby facilitating coordination within the specialist departments. This makes production more flexible and, from experience, less prone to disruption.
An ERP system creates schedule and cost transparency
ERP systems also offer advantages for internal reporting, as their functions as a data hub make them an excellent information cockpit for management. With an ERP solution, you can create individual dashboards that visually present all relevant production KPIs (throughput time, reject rate, etc.). This makes it easier for management to gain an overview and make strategic decisions based on this.
This is based on precise, production-oriented preliminary, real-time and final costing, including variance analyses. For example, you can allocate all costs to the order that caused them – including stock material, in-house and external production, travel expenses and order-related procurement processes.
On the one hand, the specification of internal reporting creates schedule transparency. You can view the status of all customer orders at any time, calculate delivery dates in advance and identify delays at an early stage. This noticeably increases adherence to delivery dates.
On the other hand, you benefit from significantly greater cost transparency. With your ERP system, you can quickly find out which orders were profitable from a company perspective and which were not due to certain complications or influences. This information is of great value when preparing quotations and evaluating incoming order inquiries.
More efficient production thanks to ERP
In production, too, companies rely on a modern IT environment that supports and optimizes their processes. Due to their numerous functions, ERP systems are ideally suited to serve as the hub of this environment. They ensure that all necessary order and process data is available via a common platform. This makes it easier for manufacturing companies to link their processes and benefit from various synergy effects.
The advantages of an ERP system relate to two areas:
- On the one hand, the system offers you a faster and clearer flow of information.
- On the other hand, it ensures better schedule and cost transparency.
ERP solutions are therefore a significant support not only for the operational level, but also for the strategic level in production.
If you are already looking for an ERP system that meets your requirements, we recommend our Whitepaper “The right way to an ERP specification”. It contains all the information you need for your decision-making process.
