ERP in 2020: A Revolution in Manufacturing
Manufacturing companies want to bring their new products to market as quickly as possible. Where cost savings were previously the primary reason for a modern supply chain management system, now there is also the fast time-to-market—the time it takes to bring a product from concept to customer. Along with this increased speed, the manufacturing industry is experiencing a revolution on many other fronts. Directly or indirectly, technological developments can significantly contribute to accelerating innovations and time-to-market. These developments must therefore be supported by an ERP system that is not only modern now but will remain so in 2020 and beyond.
A Flexible ERP is a Must
One trend we’re seeing is that manufacturing companies are increasingly bringing production units back to their own country or nearby regions, a process known as nearshoring and reshoring. This creates a completely different flow of raw materials and goods in the supply chain. Additionally, the industrial manufacturing sector is seeing an increase in mergers and acquisitions within the supply chain. Flexible ERP systems are essential in these scenarios: systems that can easily add new locations or business units, connect with other systems, and quickly respond to changes in the supply chain.
More and more companies are also looking to move their ERP to the cloud, with private or hybrid cloud often being the first step toward full cloud adoption.
Taking Manufacturing to the Next Level
For a manufacturing company to remain successful, direct access to, analysis, and management of large amounts of data is crucial. This involves not only data from ERP systems but also information from social media and machine sensors. With the growth of the Internet of Things (IoT), even more data becomes available, requiring an ERP system that can already connect to these IoT applications. Mobile applications are also playing an increasingly important role in manufacturing: devices and machines must be accessible via mobile devices, significantly changing employees’ work. One of the most groundbreaking trends in this sector is the rise of 3D printing, which allows companies to produce parts themselves, significantly impacting inventory management and procurement. This means that inventory costs can decrease, as companies only need to store basic materials that can be printed in any form.
Industry 4.0
We are on the verge of a new industrial revolution known as Industry 4.0, in which existing business models are challenged and trends such as digitalization and crowdsourcing are radically transforming production processes. Only manufacturing companies that continue to invest in their ERP system—by adding upgrades and new features or choosing a new system—will stay ahead of their competitors. Companies that neglect their ERP risk it becoming outdated, consuming more costly IT resources that could otherwise be used for innovation.
Read more about these developments and trends in the latest Cadran trend document, “A Future-Proof ERP as a Differentiator in Manufacturing.”
