Manufacturing has been one of the highest growth industries in India, especially with the inception of the Make In India program introduced by the government to place India on the global manufacturing map. Manufacturing companies in states like Punjab have actively made valuable contributions to this backdrop, especially in the automobile sector.
The growth is asserted by statistics which showcase that the GVA in this sector has grown at the annual rate of 7.9% year-on-year since 2011-12. The government is now going long on the future of manufacturing, by aiming to increase the share of the manufacturing sector from 16% to 25% of its GDP contribution and create 100 million new jobs by 2022.
If you are a company in this sector and are aiming to make use of this opportunity by streamlining your operations, Enterprise Resource Planning (ERP) software can go a long way in helping you scale.
Let’s look at the various benefits of ERP for the manufacturing industry:
1. Automation of Processes
The core essence of automation lies in its ability to automate redundant tasks. Thus, through a reliable ERP system, manufacturing processes can find a significant opportunity to scale here.
Real-time data catering to various company functionalities like designing, development, inventory, finances, marketing, sales, etc and be found in one place.
This improves the efficiency of tasks, increases the speed at which they are executed, minimizes errors, and improves profitability.
2. Strategic Decision Making
Since the management has the data of every department at their fingertips, this provides them a bird’s eye view of all the operations. As a result, this aids the strategic decision-making process. Faster and more accurate decision can be taken through actionable insights. This exists in the form of Key Performance Indicators (KPIs) as shown below:
3. Inventory Management and Cost Reduction
Take a look at the following study from Mint Jutras which depicts the impact of implementing an ERP system in the manufacturing and distribution industry:
Note: World Class refers to the top 20% distributors and all others refer to the remaining 80% of the distributors.
What does this tell us? EPR solutions enable you to manage your inventory in a way that the least possible working capital is required to meet the current revenue targets of the company.
The status of both inbound and outbound inventories can be tracked and integrated into the production planning process. This automatically brings down the inventory and warehousing costs.
Not only this, ERP systems even help to improve the efficiency of the workers by lowering the probability of errors.
4. Large Transactional Volumes
Since all the processes are synchronized and optimized to the core, the complexities of scaling come down and it is fairly easy to handle the operations at large. A bigger customer base can be tapped and handled in lesser time.
David Frank, Executive Vice President of Sales at Augusta Power Group states about integrating ERPs in their clothing manufacturing company – “We discovered a big increase in the transactional volumes we could handle. This was an important realization because it allowed us to grow organically without the need for additional resources.”
Hence, an ability to scale is the foremost reason to switch to an ERP system immediately.
5. Payroll and Human Resource Management
The manufacturing industry is known for its rampant hiring and large workforce due to the demand for labour that it creates. If managed manually, this proves to be a huge problem for the human resource department.
A huge amount of employee data has to be handled and retrieved at the right time like at the time of remuneration, report generation, attendance clocking, etc.
Here is everything that ERP software helps you manage:
- Multiple Shifts
- Statutory Compliance
- PF etc.
All these benefits and more make it a must for manufacturing companies today to integrate an ERP system in their operations. If we have been able to hook you about the same, check out Zenscale ERP today and overhaul the way your company functions!