How ERP resolves challenges faced by Industrial Machinery and Equipment manufacturers

The Industrial Machinery and Equipment market (IM&E) in Asia is extremely competitive and fast-paced. Companies in this market produce the machines used by other manufacturers. Because of the dynamic market they operate in, IM&E manufacturers are seeking to balance productivity and efficiency with responsiveness and agility. To do so, they are becoming ‘smart manufacturers’, turning to technology as the platform for future growth to achieve these goals.

Quality and safety

Customers expect higher quality products from manufacturers. Manufacturers are also increasingly being held accountable for the safety of workers who make the products and the environmental impact of producing them. A modern ERP system geared to manufacturing can offer both quality management, and environmental and social reporting.

An ERP application with a quality management component can monitor quality at every stage of the process — from incoming material inspection, at various stages of the production process, to final product testing. If there are quality problems, they need the ability to track and trace how items arrived, moved through production, to final delivery. The quality and traceability system will enable them to find out if the problems are due to physical conditions or a process error.

An ERP system is a repository of data from all functions of a business. A system with a powerful extensibility capability can be used to collect data from external partners as well. Having a wider view of data, e.g., from suppliers, can provide insights into streamlining sustainability operations. The data can be used to provide visibility into how to measure and reduce waste and carbon emissions, optimize processes to be more energy efficient, and monitor factory events for safety reporting.

Improving customer service

Changes in customer demand are driving changes in various processes. In sales, the need to provide accurate quotations and delivery estimates requires up-to-date information on costs, inventory levels, production capacity and lead times. An ERP system centralizes the information from different functions — finance, inventory management, production scheduling — so that sales teams can offer customers the right information.

Managing production operations

A recent report noted that 90 percent of manufacturers are spending on digital manufacturing technology. Manufacturers have realized that having digital sensors attached to machines and products (the Industrial Internet of Things) allows them to optimize production operations and manage the end-to-end manufacturing process better. An ERP system can process and store the data from sensors so that it can be analyzed in various ways to see where improvements can be made.

Digital sensors on their own, though, don’t help manufacturers to keep track of whether production schedules are being adhered to and the progress of jobs on the factory floor. Manufacturing Operations Management (MOM) software, included as part of an ERP system, manages the complexities of planning, scheduling and tracking production jobs. A MOM provides real-time visibility into shop floor operations, allowing manufacturers to monitor progress, track resource utilization and identify bottlenecks. Using a MOM provides the information in visual form to optimize schedules and allocate resources more efficiently, making the manufacturer more productive, and able to run a more agile production operation.

Managing inventory

IM&E manufacturers have a major job in managing the considerable amount of inventory and parts that they deal with. They also need to ensure that items are moved at the right time to the shop floor for production work to be done. Finally, they have to make sure that enough inventory is available whilst also not holding too much inventory which increases costs and can result in some stock obsolescence.
An ERP system comprises the tools that can help inventory management be more effective and cost-efficient. It integrates information from sales, procurement and production, providing better information on how to manage the availability of items in the warehouse. Data from sales and demand forecasts can be used by inventory managers to reduce the risk of stockouts or overstocking. An online portal connected to the ERP application allows better communication with partners in the supply chain so that any problems with the delivery of items can be dealt with promptly.

Making data-driven decisions

IM&E manufacturers need strong reporting and analysis capabilities. An ERP system with embedded analytics enables manufacturers to be data-driven based on real-time data.

A major benefit of embedded analytics in an ERP is the centralization of data. It provides a single version of truth because corporate data is aggregated into a central repository. This provides a fully integrated view of key business operations, increases access to real-time data that can be used to generate insightful information, and allows for faster, data-driven decision-making. With real-time dashboards, manufacturers can monitor key metrics and trends, and identify anomalies quickly.

Driving change in IM&E with ERP

Manufacturers are already realizing that technology is the driver of future success. By combining the benefits of digital technologies with the power of an ERP system, they can position themselves for growth by reducing costs, increasing productivity and efficiency, improving supplier collaboration and customer service, and ensuring they comply with regulations. They can also eliminate barriers to innovation and become more competitive and profitable.