How Does ERP Software Target Manufacturing Waste?

Go Lean with Epicor® ERP

Watching profit is a number one priority for every single organization, and we are all constantly looking for ways to grow in that area. Too often though, manufacturing businesses strive to expand a customer base or create new products to grow their bottom line before they look internally to examine their existing processes. Most manufacturers experience some form of waste that inhibits revenue increases. An effective way to fix these issues is through implementing or improving  enterprise resource planning (ERP) software.

Several businesses look at ERP as incompatible with lean manufacturing initiatives and shop floor productivity. However, the software has evolved to prioritize shop floor concerns. ERP monitors production lines and equipment and provides reliable data to encourage continuous improvement and attack waste.

Below, we’ve listed four common sources of manufacturing waste and how you can reduce them with ERP. Once you’ve harnessed the power of ERP, you might just be surprised how much extra cash you have left over for investment in new innovations and client growth!

Learn more about how ERP manufacturing software can transform your business by downloading our white paper!

1. Defective Product

Product defects: They’re bound to happen at any manufacturing business—likely many times. However, storing all your production data and processes in a single enterprise system will help you avoid this mistake. ERP ensures multiple parts of your enterprise are in sync to promote manufacturing accuracy.

ERP software can also monitor the health of your production lines. If something has gone wrong or a certain machine has broken down on a line, the software will notify you immediately. From that point, you can shut down production from your interface (if you’re operating ERP in the cloud, you can do so from anywhere with internet access) and redirect product onto operating lines. Defective product can be hard to eliminate completely from your shop floor, but with ERP you can do everything possible to limit the damage.

2. Wait Times

Facilities may be spending unnecessary time transferring items from production to quality assessment, or waiting for a manager to approve a part in one system before it can move ahead inside another. ERP consolidates your operations and keeps every team member, machine and manager on the same page. The software can automatically notify a product manager for a change order or a need for approval. Quality assessment will also work faster than ever, as your business can implement specific rules inside your system that stop production if a certain factor (pH, temperature, resistance, etc.) is not up to standards.

3. Transportation Costs

Another serious source of wasted time that most manufacturers aren’t aware of? Transportation and delivery. Are you using more middlemen than necessary to distribute products? Are there faster ways to get your end product to market, or a flat-out better mode of delivery? Properly mapped ERP software will be able to automate all of your delivery and shipment logic, from the points of transfer to the need for signatures at each delivery stop. You’ll build out the most efficient chain of supply possible and reduce waste when your ERP is built around your specific supply chain and delivery processes.

4. Excess Production

Excess production can happen at any point to any manufacturing business. Perhaps you’re overloading your inventory or simply overusing production lines, or there’s been a drop in demand that you haven’t properly measured. It will always result in too much product sitting in your warehouses—and too much money spent on storage space.  Excess inventory is especially problematic for businesses that manufacture products  that quickly decrease in value (e.g., electronics). Your priority should always be getting the right amount of product to the right customers.

With the accurate demand planning functionality provided by an ERP suite, you’ll be able to leverage past sales information and trends to plot out an accurate timeline for future production. From there, you’ll be able to plan an efficient manufacturing strategy that will cut back on waste, whether that means that you need to cut back on production numbers or you need to expand your capacity.

Wrap Up

Your business can actively combat multiple sources of unnecessary costs by using enterprise software to trim down on waste or improve inefficient processes. Whether it’s an overwrought supply chain or excess inventory, waste can accumulate very quickly inside a business and bring it down before you even know what’s happening.

Epicor® understands the harm of manufacturing waste and the importance of lean manufacturing. For over 45 years, the ERP vendor has been committed to providing innovative solutions to reduce costs, from Kanban functionality to real-time production data. Epicor® ERP provides manufacturers with complete control over their operations and 360-degree visibility, so they can enforce lean practices and pursue business growth.

Looking to reduce waste with ERP? Get in touch with Datix today! We are experts in ERP implementation and business process modeling. Our experienced ERP consultants can make your business more productive than ever by crafting scalable software solutions aligned to your manufacturing needs. We’ll work with you from start to finish to optimize your business performance.