We are entering a new era of manufacturing — one where manufacturers need to move fast and strike hard in order to stay ahead of competitors and stay relevant to customers. This type of maneuverability depends heavily on technology, leading companies to take stock of their ERP solutions and evaluate if they can succeed with what they have.
The great news is that the technology — especially cloud technology — has evolved to a point where manufacturers can keep pace with the changing business world. More manufacturers are migrating to a cloud-based system (34 percent in 2013 compared to 22 percent in 2012, according to a study by the Manufacturing Performance Institute). And many are doing so because it is both cost- and time-sensitive compared to alternatives that take an average of 18 months to deploy.
As a rule of thumb, new cloud deployments are generally 25 percent to 50 percent faster to start, whereas on-premise ERP requires significantly more time (increasing the likelihood of disruption) and money — two very important deployment aspects manufacturers need to consider. Using cloud solutions, companies with several plants will see an even greater cost savings as subsequent deployment to additional sites can be as much 75 percent faster since the ground work is essentially already in place.
While the experience and expertise of the ERP solutions provider has a direct impact on deployment success, here are a few tips manufacturing company leaders should keep in mind to ensure implementation goes smoothly:
- Adopt a "continuous improvement" mindset. Company leaders should continuously analyze their operations so when they deploy the new technology they can do so in accordance to their strengths, not their weaknesses.
- Drive responsibility to the point of usage. Rather than expect a system administrator or cloud manager to implement the technology across the entire company, put the technology in the hands of those who use it. It’s the operators, department managers, and plant supervisors who will know exactly how to use the system to gain the most benefit for their respective department. One of the great aspects of cloud-based solutions is that a majority of companies (68 percent according to the Manufacturing Performance Institute) take advantage of unlimited licenses from their provider, making it possible for the majority of employees in the company, from top to bottom, to use the system and to take part in driving the success of the company.
- Make smart investments in your employees. ERP systems only deliver value if people know how to use them. A provider who understands the value of offering great customer service will do everything in its power to ensure the customer is getting everything they can from the product(s). If the provider offers educational services or “boot camps,” take advantage of them and keep taking advantage of them.
- Choose a manufacturing ERP. Manufacturers have unique shop floor requirements requiring tailored solutions that one-size-fits-all ERP providers simply can’t meet. This should go without saying, but it becomes imperative when selecting a cloud-based ERP solutions provider that company leaders choose a firm that is dedicated to the manufacturing industry, rather than choosing one that only works in the space occasionally. By doing so, they are selecting a partner that understands the needs of the company from the ground up — and can implement the technology the right way the first time, saving time and hard-earned budget dollars.
- Kill old systems and processes. This may be the hardest thing to do, but these old systems and processeswaste resources, create indecision and produce bad data, which can lead to costly mistakes that affect the entire company. Purge them at the first available opportunity.
- Keep business agility in mind. When implementing a new system, manufacturers forget to consider a very important piece of the puzzle — business agility and how the new system will help or hinder it. Agility can be one of the most valuable differentiators in today’s manufacturing world and companies should strive to maximize it. Implementation of the new ERP technology should be done in a way that allows a company to easily change its processes to better align with the constantly changing business environment’s evolving expectations, wants, and needs of their direct consumers.
On-premise systems are expensive and risky to change on a frequent basis which is why they’re typically updated on a yearly basis. Customers usually have to pay every time they want an upgrade, and it’s often a very tedious, time consuming and disruptive process. Cloud-based solutions, on the other hand, offer frequent – sometimes even daily – updates and customizations. And since the solution is cloud-based, there’s no upgrade fee or delay in production. For manufacturers who want to see and understand every aspect of their business in real time, cloud ERP technology is a perfect solution.
In a time when business agility needs to be fluid and optimal, on-premise systems debilitate the constant improvement and change that manufacturers need to find and maintain success. Manufacturers that aren’t taking advantage of cloud-based ERP solutions are really just throwing money away.