What is ERP and Why is it Important?
What is ERP? ERP Stands for Enterprise Resource Planning software and they are fully integrated ‘end to end’ solutions that perform all of the business processes for an organization. Typically in manufacturing, these include quoting, sales order processing, purchasing, production planning and scheduling, costing, shipping and receiving and all accounting functions.
Enterprise Resource Planning systems become necessary as companies grow to the point that it’s:
- Awkward and very time consuming to maintain multiple systems to run the company
- Difficult for management to make decisions because they don’t have access to ‘all’ the information about the company in one reliable place
- Transactions need to become automated to eliminate errors and minimize administrative cost.
Small manufacturing companies with great complexity as well as those generally over $10 million in gross revenue are good candidates for ERP systems. In addition, companies that will grow past this threshold in the short term can benefit greatly by installing an ERP software system to help handle fast growth, no matter the industry they are in.
What is ERP Software?
ERP software systems perform not only basic functions but also provide great benefits to companies because everything is integrated and rules based functionality can be setup to ‘trigger’ key events. Typically ERP systems can:
- Automatically generate purchase orders for raw materials, based on the demand from sales orders and production jobs.
- Simulate the shop load using the scheduling system allowing for much better capacity planning, and features like ‘capable to promise’ mean that new orders can be placed into the schedule to accurately predict shipping dates without upsetting the existing production schedule.
- In multi plant situations, inter plant transactions can be automated.
- In multi company ERP installations, the inter-company transactions are automated and the eliminations between the companies for financial reasons can be done seamlessly.
- Logistics and processes like calculating ‘landed cost’ are standard.
- Costing is embedded into the process so the company will know the cost and profits.
- Shipping and billing are connected, so companies can ensure that everything that gets shipped is billed.
- With separate systems, invoicing can ‘fall through the cracks’.
Benefits of ERP
The benefits of ERP software systems include:
- Efficiency as the data only needs to be entered once, and related information about the piece of information can be automatically retrieved
- Reporting is more accurate because multiple systems don’t need to be reconciled in order to yield correct data.
- Automated processes will speed up the business processes. Invoicing for instance becomes an automated process that only takes a few minutes, with invoices routed to email addresses, fax numbers or however each customer wants to receive them – in seconds.
- These systems are auditable, and if a company is sold, it is much easier to track assets and transition one organization to another.
- Managers can make decisions on actionable information, rather than spending time compiling the information needed.
Contact EpiCenter Today to Learn More About Our ERP Services
Now that you have an understanding of ERP software & its benefits, consider the experts at Epicenter for your ERP system implementation and other ERP services and needs.
EpiCenter is a top shelf team of experienced manufacturing professionals who work with Epicor ERP (now Epicor Kinetic) software. Let us help you evaluate your business and the key decision points you’ll need to decide if moving to an ERP software system is right for your business. Please fill in the form below or click here to contact us, and our team will guide you through the process.
written by Jeffrey W. Glaze, President