What is ERP?

ERP stands for Enterprise Resource Planning which are software solutions designed around the concept of a single data structure that (usually) has a common database.

“This commonality ensures that the information used across a business is easily accessible and based upon common definitions and user experiences.”

These core structures are then integrated with business processes driven by transactions across business departments (e.g. finance, human resources, engineering, marketing, operations), connecting the ERP Systems and the people who use them.

Simply put, ERP Systems connect all areas of a business to drive operational efficiency through improved business reporting.

Example ERP System

In a company that manufactures microwave-ready meals, let us call them “Ping Foods” for the purposes of this illustration.

Ping Foods procure multiple ingredients and items of packaging from multiple suppliers as and when they need them. Their current systems are not joined up so they have no way of planning for their demand. They could benefit from an ERP system to track the requisition and purchase of these ingredients to make sure they are buying the items they require in the correct quantities and at the correct time in their manufacturing cycle.

Inventory management is poorly maintained, to conduct a stock check takes a full week every quarter as this must be done by hand. This costs the business 4 weeks of production and order fulfilment every year. They would benefit from an ERP solution to manage their warehouse to ensure minimal wastage and correct shipping procedures, be able to monitor stock and plan for demand peaks.

The design and costing of new products is all done using spreadsheets and requires multiple departments collaborating to ensure new products are costed effectively. By implementing an ERP solution the product development, recipe management of their products and design of new products would be streamlined and much more accurate enabling the development of more new products.

The rigorous quality assurance processes required for a food manufacturer is time-consuming and open to human error with the spreadsheets they currently use. By implementing an ERP solution, their control plans and quality assurance measures are embedded to ensure the highest quality of manufacturing reducing product wastage and customer complaints.

Ping Foods currently store all employee records on Excel. Managing shift patterns, employee absence and maintaining essential health and safety records is a labour intensive job. By using embedded HCM (Human Capital Management) functionality Ping Foods could benefit from managing the shift patterns of their manufacturing facilities using the HR functionality, have improved visibility on staff absence levels and enable employees to manage their essential learning/qualifications using self-service tools.

When their factory equipment fails, the cost to the business could mean hundreds of thousands of pounds in wasted ingredients, delays to customer orders and affect company reputation. By implementing an ERP solution with embedded reactive and preventative maintenance, the costs associated with machine failure would be mitigated. They could also utilise the “internet of things” to gather essential machine performance data to tackle any failures before they happen.

By having one core solution their business could be managed to a higher level of efficiency. By having a secure and central database, everyone in the organisation would be confident that data is correct, up-to-date and complete. Data integrity is assured for every task performed throughout the organisation, from a quarterly financial statement to a single outstanding receivables report, without relying on manually updated spreadsheets.

A key ERP principle is the centralisation of data within a business which can be accessed by many stakeholders within an organisation. Instead of several standalone databases with an endless inventory of disconnected spreadsheets, ERP systems bring order to chaos, meaning that all users, from the CEO to accounts payable clerks, could create, store, and use the same data derived through common processes.

This is a very crude example of where ERP technology can benefit a business using disparate business systems or using spreadsheets to manage critical business processes.


Realising the Value of ERP

It’s clear to see from the above example that ignoring the effects of enterprise applications on the business landscape of today is impossible. As enterprise data and processes are hosted by ERP systems, businesses can align their very separate departments and improve workflows, resulting in meaningful bottom-line savings.

How does ERP help business?

Improved business awareness
Through the improved visibility of real-time data generated by standard reporting functionality in ERP.
Lower operational costs
Through streamlined business processes and implementing the best practice approach, an ERP solution will bring your business.
Improved collaboration
From users sharing data across multiple departments such as purchasing and contract data.
Improved operational efficiency
Through a common user experience across many business functions and well-defined business processes.
Consistent infrastructure
From the back office to the front office, with all business activities having the same look and feel.
Improved user-adoption rates
From a shared user experience and intuitive design.
Reduced business risk
From improved early warning triggers and best practice processes.
Lower management and operational costs
Through standardized and integrated systems across the business, making the management of a business easier for all involved.

Why we recommend IFS Applications

Mitec specialise in the implementation and value maximisation from ERP for the Food and Beverage Manufacturing and Chemical or Pharmaceutical Manufacturing industries. IFS Applications is designed with these industries in mind allowing you the flexibility to run your business your way.

IFS Applications is designed to improve your business operations today for better outcomes now and in the future. The product has a great solution fit for these industries coupled with outstanding user experience help you better serve customers, engage your staff and stand out from the competition. Choosing IFS as our key ERP partner was an easy decision to make.

To request a DEMO of IFS Applications click here

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