About Enterprise Resource Planning software.

Enterprise Resource planning, or ERP, is an integrated computer-based system used to manage all the resources of an organisation, encouraging more informed decision making and improved efficiency at all levels.

The purpose is to enable the flow of information between all the functions of the organization and manage the connections to outside stakeholders.

Built on a centralised database, ERP systems consolidate all business operations into a uniform and enterprise-wide environment.

Generally an ERP system will have the following characteristics:

  • integrated and operating in ‘real-time’ so it is always up-to-date;
  • one database to prevent redundant data and multiple data definitions;
  • all ‘modules’ have the same look and feel;
  • users are able to access any information in the ERP system (subject to access permissions).

What features should ERP include?

In truth, every ERP system is different and many specialise in certain industries or sectors. Central ERP® for example, is focused on manufacturing, engineering and construction industries.

However, the general concept is that all elements of the business should be included in the system and, crucially, should be able to report financial transactions back into a central ledger. Most manufacturing Enterprise Resource Planning systems will include:

Accounts.

Rather than a separate ‘bolt-on’ package, ERP accounts should be fully integrated and able to record all income and expenditure, as well as all operating costs, stock transactions, employee costs and any other relevant transactions. Integrating with a 3rd party accounting system will rarely provide the level of reporting that is required for truly detailed analysis of performance.

Material Requirements Planning (MRP).

Material Requirements Planning, or MPR for short, allows you to forecast your future stock and raw material requirements against sales demand, or expected demand. A properly implemented MRP system can reduce customer lead times, increase On Time In Full (OTIF) performance and lead to a leaner, more efficient supply chain.

Production Scheduling.

As a true ERP system has full visibility of all resources and demand, scheduling is easier and more intuitive. Central ERP® for example, includes an on-screen Gantt chart schedule that displays all outstanding works orders, which when combined with our Shop Floor Data Capture (SFDC) feature, allows an instant picture of past, present and future production.

Stock Control & Warehousing.

Rather than just “goods in” and “goods out”, an ERP system can offer complete visibility of individual items or batches. This is particularly important for ‘mission critical’ processes such as ISO 9001 and GFSI / BRC requirements for food safety. Stock control can also be applied support to multiple stock locations and Vendor managed Inventory (VMI) and should also be integrated with accounts to provide a true reflection of stock valuation and reduce the time taken to achieve accurate month end reporting.

Payroll.

Labour costs are often the most important part of a business and a true Enterprise Resource Planning system should be able to process and report on payroll costs. Many systems rely on monthly journal entries, but this often misses the detail required to thoroughly analyse performance of individual jobs, contracts, projects or employees.

Customer Relationship Management (CRM).

Sales start at the enquiry stage and an integrated CRM system can provide a wealth of information that can lead to increased customer satisfaction. Rather than a sales enquiry diary, an integrated CRM system can track whether quality control issues are having an impact on sales, or whether complaints are increasing for a particular item, customer or as a direct result of a particular supplier, or item.

Sales Order Processing (SOP) & Purchase Order Processing (POP).

The backbone of any accounting system, SOP and POP can be extended within an ERP system to link with even more information. Does the sales order fall under a project? Have you made money on the project? Is there a retention rate that is linked to a customer contract? Do you need to get a purchase order verified before it can be placed? These are all examples of questions that are difficult to answer when using a separate accounts package.

Reporting & Analytics.

Having access to a wider range of information in one database opens up a wider range of insights. In Central ERP®, users are able to report performance across departments for a wide range of criteria. This improved viability enables more effective decision making and increases efficiency, ensuring that you can remain competitive in a rapidly changing global marketplace.

Promoting ‘lean thinking’ across the entire organisation.

In the traditional business model, individual departments and units often operate as separate entities or ‘functional silos’. The processes of each unit within an organization are focused inwards on meeting the functional objectives and there is often a lack of cohesion across departments. As a consequence management resources are often wasted on managing the relationship between these functional silos rather than on getting the job done.

ERP implementation means that marketing and sales, manufacturing, finance, and so on, are connected and unable to pull away from one another. All functions of the organisation are now ‘seeing the same data’ and the focus is on satisfying the demand rather than managing inter-functional relationships. ERP implementation is a facilitator of this culture change and can provide a robust framework for the future of the organisation.

This approach promotes ‘lean thinking‘, a practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Properly implemented, an ERP solution should lead to a more productive, less wasteful, and lower overhead organisation.

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Does my business need ERP?

Almost every business could benefit from the introduction of an ERP system.

ERP systems bring all of the separate elements of your business together into one highly visible and easily manageable solution. ERP promotes “joined up thinking” across the entire business, both internally and externally and can greatly improve performance and reduce costs.

Traditional ERP systems are often out-of-reach of smaller businesses due to the large up front and ongoing costs.

Hudman gives you access to all of the features and benefits of a traditional ERP system for one affordable monthly cost.

If you’re thinking of adopting an ERP system, or if you currently have a system that is not meeting your needs, please feel free to get in touch and one of our consultants will be happy to talk to you in more detail about your requirements.

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