Today’s challenges to ERP?

Even in a situation of economic slowdown, the ambition of every economic entity, including production companies, is to increase, or at least stabilize, the situation at the current level. It is no secret that many manufacturing companies are in a difficult time for the economy, investing the most and developing faster than the prosperity. Thus, while attempting to characterize the present situation of manufacturing companies, we assumed that we are talking about the situation of their development and implementation of the growth strategy.

Manufacturing enterprises, especially in the era of increased competition imposed by the consumers of their products, are exposed to frequent interruptions in their operations, business processes and the development of their business. The above has a direct impact on their IT technologies supporting their operation, including ERP software.

The problem, which should be treated as a challenge, should be a matter of choice and implementation so that IT technologies facilitate (and not hinder) the adaptation of enterprises to current micro and macroeconomic conditions characterized by high dynamics of change. Here we mean in particular: ensuring the functionality, but also the development of the existing ERP system; ensuring compliance with both local and international law; adapting to business process changes; Streamlining merger and acquisition processes; facilitating the transfer of the production process of goods beyond the borders of the country and then off-shoring; facilitating relocation of production facilities abroad (re-shoring); Reduce the problems and expenses associated with maintaining and maintaining IT infrastructure, and facilitating the use of data and information from content exchange tools and social media.

Manufacturing companies must remain responsive and responsive to changing customer expectations of their products – taking into account macroeconomic changes, customer behavior and needs, and the presence of increasingly competitive products on the market – while reducing costs, increasing profits and increasing the competitiveness of their products. They must find ways to reduce redundancies in processes, simplify production cycles, improve product life cycle transparency, and reduce product launch time – to stay competitive.

In order to meet the challenges of today’s market, manufacturing companies are increasingly looking at their ERP systems that affect the key areas of their business. Therefore, they increasingly think and decide to expand and strengthen their significance in the organization by, for example, extending its complex operations between departments and organizational units, and optimally integrating all aspects of the business into a single, coherent system that allows for comprehensive handling of manufacturing and distribution of products.


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Are you curious how to achieve success of ERP?

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FITTING TO THE NEEDS OF THE ENTERPRISE

There is no difference between the traditional cloud model and the expansion of functionality with additional industry solutions. Today, most software vendors allow for easy integration into the ERP system, whether it is located in the cloud or on local servers.

CONTROL

The cloud model gives you great control over your costs. With full scalability, the company uses only the amount of resources it needs. In addition, entrepreneurs can freely increase or decrease their consumption without worrying about server resources.

An important issue for entrepreneurs is the ability to control data. There is widespread belief that cloud computing is not a secure solution. But it is wrong. At present, the cloud has a number of mechanisms that allow sensitive data to be protected by replication in geographically redundant data centers.

ACCESS

In the cloud model, the ERP system is maintained on external servers and made available via the Internet. Entrepreneurs can have full control over the processes taking place in the company. Note, however, that this model is linked to the risk of network outages resulting

ERP IN THE COURSE IN PRODUCTION COMPANY

The vast majority of manufacturing companies choose to purchase an ERP system in a traditional model. Servers provide stability to work and processes. But the cloud is also a solution that works in such demanding industries. It is critical for production companies to have continuous, uninterrupted access to the system. In the case of cloud software, the entrepreneur must provide an organization with Internet access and a redundant internet connection that will ensure network stability. Internet connection must be efficient in order to optimally handle all required processes. In addition, it is important to provide users with the ability to work offline if Internet access is interrupted.

SUMMARY

Running a cloud-based ERP system is a natural trend that is gaining momentum each year. It is increasingly used by small and medium businesses, for which the cloud model and subscriptions bring many benefits. First of all, they storm the entry barrier. The cost of implementing the system is no longer so high and does not require additional investment in equipment or infrastructure. Large companies are increasingly eager to switch to cloud computing, but in a secure, hybrid model.


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Are you curious how to start ERP project?

Are you curious how to achieve success of ERP?

Are you curious what are the problems before implementing ERP?

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Sample functionality of ERP software (2)

Graphical analysis of availability in time and by event
Among the new features introduced in ERP system – Microsoft Dynamics NAV are an improved graphical inventory analysis system. With this functionality, Microsoft Dynamics NAV allows you to more effectively manage inventory, changing over time and events. Analyzes are created on the basis of, among others. specific purchase, production, sale and interchange transfers.

 

Streamlined delivery planning
With improved advanced suggestion and optimization tools, ERP software – Microsoft Dynamics NAV is even more effective in supporting demand and logistics planning. Improvements include New options defining logistical management over time, scheduling deliveries, and support for deliveries relative to inventory (overflow) levels.

Cost accounting
The new Cost Account module allows you to allocate budgeted and actual costs for activities, departments, products and projects to analyze your company’s profitability. This allows for a better definition of types and cost centers, which makes it easier to analyze them (where they originate, which component should bear the costs, etc.). In addition, the Cost Account allows you to move your general ledger account or create your own expense type chart. You can also link the Cost Centers and the cost of objects in the ledger and add them to the partial amounts. Also check the functional description: Profit and Loss Account.
Complete management
Microsoft Dynamics NAV (ERP) has been enhanced with a comprehensive set of tools to manage the compliment. New functionalities are fully integrated with sales, planning and purchasing modules. This means that companies that deliver products by combining components in simple processes (picking) can do so without the need for full production management.
Enriched Compliance Management perfectly supports the Just-in-Time stock strategy and enables customization of orders to meet customer requirements. The set item is defined as the sales item containing the BOM. You can set the components to be assembled to order for the customer or mounted on the warehouse.
The Assembly Management functionality (in Navision) is combined with the following processes: Assembly of Elements, Completion Order, Purchase Order and Warehouse Service.

Extensive charts
With the new release of Microsoft Dynamics NAV, data presentation tools have also been expanded. Business Intelligence is even more user-friendly in Microsoft Dynamics NAV, which translates into increased productivity.


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People – one of the key elements of the ERP project (1)

People – one of the key elements of the ERP project (2)

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Sample functionality of the ERP system (1)

Modern reports
With the new version of NAV, Microsoft has rebuilt more than 700 reports and expanded the functionality of more than 200 of them to the latest Microsoft Dynamics NAV Report UX.
With new reports, users can take advantage of features such as dynamic sorting, grouping, or pasting graphical analysis. In addition, rebuilt reports run much faster, which is important in the daily work of users.
Cash Flow
Understanding the principles on which the financial liquidity of an enterprise is based is the basis for proper financial liquidity forecasting in the company.
Cash flow analysis is not always easy. With the help of ERP system, there are a number of tools to improve your financial management. The ERP software allows you to create different variants to determine the expected revenue required to calculate surplus or deficit cash. Based on these analyzes, you can make the right decisions, such as reducing your credit for excess or finding outlays if there is a deficit.
Forecasts can include values ​​from multiple sources in Microsoft Dynamics NAV (ERP) – Ledger, Sales, Marketing, Purchase and Service.
A critical issue for every company is financial control and maintenance of current liquidity. Managers need to keep current information on their current state, planned inflows, and outflows to properly control cash flows. Unfortunately, quick access to this information is not always easy and is due to a number of factors. Microsoft Dynamics NAV (Navision) provides tools that make this task easier.
The cash flow in Microsoft Dynamics NAV is simple in configuration. The system draws data from various sources: open orders, receivables, liabilities, etc. The user decides which data is being analyzed and can choose one of many control options.
Microsoft Dynamics NAV based on set parameters creates suggested scenarios that the user can edit. The system allows you to create many predictions. For example, you can define different forecasts for a comparison of several months. The history of your cash flow forecasts can be saved and used in future analyzes.
The cash flow forecast may draw data from the following areas of the system:
• General Ledger – Cash and Budget.
• Purchases – current and planned purchase orders
• Sales – current and planned receivables based on sales orders
• Services – open service orders
• Fixed assets – planned investment budgets and future purchases of fixed assets
• In addition, the system allows you to manually add information about other revenue or business expenses

Check what are erp system types

Check out the new web page about: business intelligence

SHIPPING MANAGEMENT (1)

Purchase Order Management

Timely execution of purchase orders offered at the most favorable price is one of the key aspects that have a direct impact on streamlining inventory management, cost reduction, and the ability to meet customer requirements. Getting the best price depends on a number of factors, such as the ability of the company to record advance price and rebate agreements, the ability to automatically apply the most favorable price to transactions, or the awareness of the purchasing staff in terms of potential savings and costs.

In addition, companies must take care of up-to-date delivery schedules, meet prepaid provider requirements, and automatically register all necessary inventory and financial data associated with purchase transactions.

Purchase offers

A purchase order is usually created as a “work order”, where you can record the price offered by the supplier, the terms of sale, and the stock description. If the offer meets the requirements of the purchasing department, it can be converted to a purchase order. Similarly, where there is a need to replenish stock, the warehouse managers may send the requisition information to the purchasing department.

Bulk Purchase Orders

The bulk purchase order reflects the agreement between the company and the supplier. It usually includes one stock that will be delivered in several deliveries in accordance with pre-determined purchase quantities, prices, and delivery dates.

Purchase Orders

Purchase orders are the basis of ERP system shopping management functionality. Purchase order functionality allows you to perform automated copying of vendor information to the order’s header and line items, or automatically check for the most favorable prices and discounts available. Purchase orders in many respects (vendor details, quantity settings, units of measure, etc.) resemble sales orders.

Demand Management (MRP)

Timely replenishment of inventory losses and purchase of optimum quantities of finished products, raw materials and stocks necessary for production are among the main tasks of the purchasing department. These activities have a significant impact on almost all areas of the company’s operations, in particular inventory management, production and sales. ERP demand management functionality helps automate and coordinate purchase processes.

Purchase prices and discounts

Information on inventory costs can be recorded in the inventory file. When you select a stock in the purchase order line, the program will automatically find the last direct cost in the stock catalog, and then copy it to the purchase order line.

Additional purchase costs

Correct cost information is a very important factor in making effective and informed decisions. Companies record and analyze costs on the basis of purchase and sales invoices. For both purchases and sales, however, they must include additional costs, such as freight, insurance, customs duties, or brokerage fees.

In the case of purchases of inventories, additional expenses are recognized as costs to be included in inventory and are included in inventory valuation and costing of goods sold. Additional sales costs are non-stock costs that are recorded as sales expenses for a better profit calculation (see Microsoft Dynamics NAV).

 

See also:

Are you curious how to start ERP project?

Are you curious how to achieve success of ERP?

Are you curious what are the problems before implementing ERP?

Check what are types of erp system

Check out the new web page about: business intelligence

What to remember when choosing an ERP system in discrete manufacturing

Under current economic conditions, with very variable consumer attitudes, decision-making by manufacturing companies is becoming increasingly complex and problematic. Adjusting your purchasing cycle and production to demand dynamics is already a necessity. The efficiency of the company depends largely on the proper planning – purchasing, delivery, logistics and production. The answer to these needs is the ERP (Enterprise Resource Planning) software.

ERP systems effectively support both discrete manufacturing and process manufacturing. These two different ways of managing the production find applications in specific industries. While in process production we are dealing with continuous flow of materials (eg in the chemical or metallurgical industry), in discrete production the material is discontinuous and occurs in the form of batches, batches or batches. In the production of discrete material lists and semi-finished products is determined each time according to the demand for the final product. Consequently, you order as much raw material as is necessary to produce a particular batch of goods. An excellent solution for discrete production is e.g. Microsoft Dynamics NAV. This is an integrated business solution for medium businesses. The system consists of modules supporting financial management, production, distribution, customer relationship management, service management, e-business. It also applies to advanced Business Intelligence and control.

Selection of ERP system in the discrete industry

When deciding on an IT management support system for discrete manufacturing, several factors need to be considered. First and foremost, we should put in place a solution where most of its standard functionality will be easy to fit into your specific business and requirements. Many of the best modern systems are modular, so you can only implement the functionality you need at the beginning, and make improvements and extensions only when you really need them. Unlike older ERP systems, today’s flexible solutions can be tailored to virtually every important process or practice, including financial management, sales and service, manufacturing, and human resources.

In the area of ​​information management, the ERP system should offer a formulation of input and processing that will allow managers to more effectively shape their business results. By analyzing data, it is easier to make decisions about changes in the offer, pricing, or source selection. Because ordinary accounting programs do not integrate with the rest of the data (for example, purchasing and sales data), you can not control all your business activities. A good ERP system is the basis for a comprehensive, efficient control system.

For discrete production, it is important that the solution improves coordination of orders and also has the function of changing parts or production operations even in already-launched production. The ERP system should support procurement planning, including planning based on orders, production orders or raw material orders. This solution simplifies the flow of materials through the supply chain and gives you the ability to plan multiple plants. In discrete production, the function of demand forecasting is a function of multifaceted analysis of sales trends. Comparing actual and planned sales and consolidation and distribution of demand plans allows for efficient planning of procurement and production. The management support system allows you to respond quickly and flexibly to changes in market trends and competition

An equally important decision is choosing a competent implementation company. The experience and the team of specialists are an invaluable asset. Implementation requires an understanding of the customer’s needs, his system of work and the specificity of the business. In-depth analysis and interviews among employees allow you to determine what kind and sequence of actions should be taken. The implementation takes some time and is interfering with the structure of the client company. A competent implementation company will ensure that this does not result in downtime and any major perturbations. An important part of implementation is training of employees who will use the system. Knowledge transfer, substantive support during and after implementation – all of these elements translate into the final result.

Also check out the new web page about: business intelligence

Before implementing the ERP system, ask yourself some questions…

Before implementing ERP system it is necessary to answer a few simple questions about business processes in your company or the problems you need to solve in your daily work:

 

• Did you lose a customer, because he went to the competition?
• Did you sign a risky contract, which turned out to be not very profitable or even lossy?
• Did you fail to meet the delivery or production deadlines?
• Do you currently feel that your resources (employees, machines) are overloaded or vice versa are usage, but you don’t know to what extent?
• Are you contending with dropping profitability and growing costs?

Avoid Costly Mistakes

If information is power, then lack of information can put your marketing, customer service, and sales teams at a serious disadvantage. When marketers design programs to attract new customers, they need to know why your customers purchased in the first place. When service representatives answer a call, they need to recognize the customer and be aware of past issues and account status.

When salespeople in the field or working remotely are cut off from the back-office operation, they are “flying blind.” Unless they are constantly on the phone with your finance and operations people, they might not know which products are out-of-stock; they might not know if a customer’s terms have changed or a customer is on credit hold. They may be trying to sell products the customer recently purchased or does not have a need for.

Providing your people on the frontlines with relevant information—all relevant information—can avoid these issues. Integrated CRM solutions, which pull data from the organization’s ERP system, ensure that everyone who interacts with customers and prospects is empowered and informed. Providing customer account, inventory, and other pertinent information saves the salesperson from having to call the finance department with the inquiry, or worse, having to call a customer or prospect back to explain that an order can’t be placed. Such solutions can also improve inventory turnover by helping your salespeople move the inventory that’s in stock and alleviate issues placing orders for items that must be back ordered.

 

What you can do?:

  • Check what is ERP?
  • What functionality of ERP system you need?
  • When you should implement ERP system?
  • What benefits you can achieve?

Also check out the new web page about: business intelligence