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Manufacturing Process

Can ERP systems solve complex manufacturing challenges?

Manufacturing is a complex industry and along with it come complex manufacturing challenges.

It’s tough balancing an influx of supply materials and parts while handling the production and storage of goods. Managing outgoing orders and shipping is also another difficult task.

Any errors in these steps could cause major problems for your entire manufacturing process.

Defining Manufacturing Challenges

We’ve already mentioned a couple of manufacturing challenges that businesses face. However, there are other root problems that affect your manufacturing process management and more.

A white paper by MYOB explains some of the underlying issues that, if resolved, can greatly improve your systems and processes.

Here’s an overview of the manufacturing challenges, according to the paper:

  • The need for accurate, on-demand customer data makes it increasingly difficult for companiesto operate successfully across multiple locations
  • Manual, paper-based systems make it almost impossible to track the whereabouts of products
  • Changing customer behaviour makes it very hard for manufacturers to forecast and re-order stock with any certainty
  • The need to be flexible with pricing makes it difficult to maintain an accurate, reliable pictureof costs

To add to that, a separate MYOB report also shares that lack of visibility and communication, as well as disconnected systems are also affecting manufacturing businesses.

Managing multiple products in multiple locations

Operating warehouses in different locations, whether international or local, poses a lot of logistical and technical challenges for any business.

“Firstly, there’s the issue of updating and maintaining data across both sites so that it’s not only consistent and accurate, but instantly accessible – and dependable – when critical business decisions need to be taken. Then there’s volume. Twice as many outlets may mean more product choice for customers. But it also means your staff have to trawl a much bigger stock list every time they respond to a customer. And the longer they spend doing that, the fewer orders they can process over all,” shared the MYOB Whitepaper.

Keeping pace with the stock movement

When you have multiple warehouses, that also means that you may have to move your stock from one to the other. In transit, it’s more difficult to keep track of your products.

More warehouses also means an increase in stock volume. Manual or paper-based systems will find it difficult to keep up with constant transport of used, sold, or returned goods, as a result.

Speed aside, accuary is also on the line. Under a primarily manual system, manufacturers can miss errors in stocks movement and discover them when its trickier to resolve.

Forecasting with uncertainty

What happens when customers don’t commit to long-standing supply agreements anymore? According to the MYOB paper, without a “bedrock of repeat orders”, manufacturers are now unable to forecast with any uncertainty.

“Ordering in too much means there’s valuable capital tied up on the shelves and escalating unnecessary storage costs. Too little stock means manufacturers themselves are forced into hoc ordering, which results in increased higher purchase costs for them, and prevents customers’ orders from being fulfilled on time.”

Losses from flexibility

Adjusting to different customer demands, manufactures can also lose sight of the true cost of their products. Without customer loyalty and clients seeking practical, ad-hoc deals, manufacturers have trouble maintaining fixed prices.

This flexibility can cost businesses some losses. Keeping an eye on the bottom line and setting margins for their goods becomes more difficult because their base prices are constantly fluctuating.

Lack of communication and visibility

For an industry with so many moving parts, it’s all about communication and visibility.

There are so many ways that a lack of these two factors can negatively impact your manufacturing operations. What happens when customer orders or incoming stock are not accessible in real-time? You run the risk of delays and other compounded issues.

Lack of visibility also affects communication. How can a team share important updates without access to important data? When a team communicates clearly, they can increase their productivity and resolve issues quickly.

Disconnected systems

According to The Manufacturer, 74% of manufacturing enterprises are held back by disconnected data.

Having data scattered across different systems makes decision-making harder for your team. Employees also end up wasting valuable time on manual tasks and inefficient processes when software solutions aren’t integrated.

Solve these manufacturing challenges with ERP systems

Now, imagine having the right system in place – one that streamlines balancing stock levels and fulfilling orders efficiently, staffing shifts with the right number of people, and ensuring orders aren’t missed or delayed.

So, what’s one surefire way to address these manufacturing challenges? An ERP system like MYOB Advanced Manufacturing.

By visiting our MYOB Advanced Manufacutring page, you’ll get additional information on this ERP system as well as a Guide to Manufacturing in the Cloud. Click here to find out more.

Ready for a manufacturing ERP system? Let us help you!

Discover the features of MYOB Advanced Manufacturing by booking a demo or contacting the AlphaBiz Solutions team.

Our experts also provide MYOB Advanced support for existing MYOB users looking to implement additional manufacutring capabilities to their system.

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