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Manufacturing and distribution companies are reaping operational and efficiency gains through cloud-based ERP deployments. Cloud ERP provides value through the fast and efficient delivery of IT services, data backup, security, and universal data access for improved partner integration. Over 90% of global enterprises report using cloud computing for some business activity.

This post explains cloud ERP’s benefits for manufacturing and distribution.

How Manufacturers Benefit from Cloud ERP

Data integration and reporting are the top game changers for manufacturers deploying a cloud ERP.

Data Integration

An effective manufacturing execution system (MES) delivers a real-time production ecosystem that initiates, guides, and reports on shop floor activities so a manufacturer can understand what’s happening and make adjustments on the fly. The more quickly information is shared in manufacturing locations, the faster the manufacturer can improve operations and minimize issues.

By driving MES information into a cloud ERP, everyone gains real-time visibility of critical data, including inventory location and management, worker and equipment activities and status, production volumes, quality measurements, and schedule adherence. The primary benefits are a fast response to product/production issues, establishing ideal inventory levels, improving product content traceability, and automating cross-function workflows (e.g., procurement driven by production levels) across multiple locations.

Multi-site data integration also improves accounting operations and saves money. By cloud-enabling the ERP across multiple locations, data accuracy and accounting projections improve and the cost of invoice processing decreases. That’s because a cloud-based ERP immediately synchronizes data across all departments and sites. Accounting operations benefits include:

Better invoice collection – Each manufacturing location may have a different method or schedule for submitting invoices; cloud-based ERP unifies the information and standardizes rules for collection, reducing staffing needs and improving invoice reporting.

Superior data consistency – Because data collection is often done within individual departments and locations, many companies have inconsistent data across the enterprise. Cloud ERP reduces this issue by providing aggregated and standardized data, which allows for advanced analysis of company-wide data and improves forecasting.

Reporting

With all data integrated into the cloud ERP, comprehensive reporting and dashboarding are also improved. Synchronizing data from multiple sources into a single dashboard eliminates the cumbersome necessity for management to transfer data from multiple systems to one or more systems at the headquarters location. Synchronizing data in the cloud gives everyone access to a single point of ‘truth’ in the data, with roll-up dashboard views and the ability to drill down based on role-based access to the cloud data. And, because cloud ERP is accessible via the web, executives can gain high-level views of the business anywhere, any time.

A special note on the manufacturing supply chain: A manufacturer can grant suppliers access to a cloud-based ERP system because of the system’s web-based nature – ease of use drives supplier participation. With a wealth of supplier data in the cloud ERP, a manufacturer gains dashboard views of the supply chain that were once difficult to obtain.

How Distributors Benefit from Cloud ERP

Distribution companies improve three major areas of their operations via cloud ERP: location coordination, procurement and delivery, and eCommerce.

Location Coordination

Both process and discrete manufacturers with numerous inputs must track the movements of products, ingredients, components, etc. with high accuracy to produce the exact amounts/volumes they need at specific times. Cloud ERP improves that process by granting suppliers and buyers in the extended supply chain access to their portion of a unified cloud ERP system, giving everyone access to information about everyone else. The benefit of having real-time input and visibility into locations is that participants can better coordinate activities.

Improved Procurement & Delivery

Location coordination improvements naturally flow into procurement and delivery (customer service) operations using the cloud. From a procurement perspective, because the ERP sees which products were delivered to customers and which products and product inputs are coming through the supply chain, procurement staff can maintain minimum inventory levels because they know what to order and when.

For customer service, delivery schedules and insights are easier to give customers. When a customer calls about a product delivery time, the distributor has detailed data that allows customer service reps to virtually guarantee delivery windows. A distributor with insights into the entire supply chain via the cloud can establish proactive alerting and eliminate much of their customer support functions around such basic inquiries. Instead, they can automate the system to alert customers of upcoming deliveries based on real-time supplier and location data.

ECommerce Integration

Pushed by Amazon, traditional distributors are becoming blended eCommerce-distribution companies. By driving eCommerce data into a cloud ERP system, they gain intelligence throughout the fulfillment cycle, wherein shopping and fulfillment activities are automated. With eCommerce purchase data going to the cloud, the ERP automatically launches new purchase orders when specified inventory levels are reached, preventing poor inventory management and stock-outs. Additionally, through EDI, the distributor can involve third-party logistics partners. ECommerce-cloud ERP connectivity delivers many benefits, including:

  • Higher customer satisfaction rates
  • Improved visibility across the sales and fulfillment cycle
  • Fewer manual processes and errors
  • Reduced inventory costs
  • Complete financial tracking
  • Better operational control
  • Modernized distribution

Conclusion

Cloud ERP is shifting the manufacturing and supply chain dynamic, giving companies with multi-site or multi-partner operations streamlined processes that yield better insights and make the supply chain more responsive. Companies that harness cloud ERP are already outpacing their competitors, delivering higher levels of customer service and reducing their bottom lines.

To learn more about how to apply cloud ERP to your manufacturing or distribution business, contact Sapphire today.

#Wholesale & Distribution #Cloud #Manufacturing

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