6 Signs Your Company Needs an ERP System
Every manager knows that the work of the company means ensuring the continuity of processes and day-to-day solving of tasks at different levels. These tasks are as follows:
- Strategic – to outperform the competitors, spend less and earn more, open new branches;
- Tactical – to purchase enough materials, fulfill the order (including delivery);
- Operational – to register customers (sales department), finish and report on the shift (workshop), calculate salaries (accounting department), deliver goods and hand over the route sheets (transport department).
Modern ERP systems help organize the internal processes at large and medium-sized enterprises efficiently. These programs count everything that was once counted manually, allow to quickly find documents and generate reports on the basis of the stored data. Since implementing an ERP system is a long-term and costly process, companies often put it off for better times. How to determine that it is time to implement ERP? The situations that are described below are the main indications for the update.
1# Disparate accounting systems
If a company uses different unsynchronized accounting systems, it is difficult to calculate the amount of materials for procurement and assess the load of manufacturing capacities.
A single ERP information system used in all departments consolidates data and helps plan the purchases and production effectively.
2# Lack of a single RD source
Without a single source of reference data (RD) the collected information becomes irrelevant, and, in a short time, incomplete and incorrect.
The single RD source in ERP excludes duplicated input and ensures that the data are up-to-date and accessible to all departments.
3# Stockpiling of inventory
If there is no centralized planning and accounting for production and sales, the inventory piles up in the warehouses.
The ERP system creates and adjusts the company’s production and sales plans.
4# There are no in-demand products in warehouses and stores
If your company experiences a constant lack of in-demand products, you need to automate the processes of procurement and sales.
ERP facilitates managing the product range at retail outlets, timely planning of purchases based on the customer demand as well as controlling the inventory balance in stores and warehouses.
5# Lack of control over production costs
Pricing that is based on the estimated costs of production leads to unprofitable business.
The ERP system provides detailed information on the initial expenses, transparent calculations and control over the costs of production.
6# Slow management reporting
To respond to changes in the market in time, managers need to receive and analyze the necessary operational information.
With ERP you can track the key performance indicators of the company in one click.
More and more often, entrepreneurs choose ERP systems to enhance their strategic development and competitive capabilities. If you decide to improve the management system of your company, address the experienced specialists who will conduct a pre-project analysis of the company’s work and prepare the best solutions.