May 7, 2019 7 Manufacturing Problems and Their ERP Solutions

These businesses face a number of manufacturing problems that were not there at their inception. This blog post discusses seven major manufacturing problems that medium and large manufacturers face that threaten to disrupt their processes and operations, and outlines how enterprise resource planning (ERP) software systems can help address them and allow for business growth.

1. Use of Legacy Systems

Many medium and large companies were in existence before comprehensive software solutions were available. These companies sustained their business activities by typically using a number of software solutions that were not well integrated, cost-effective, or user friendly, and that generated large amounts of unstructured data. Today’s medium and large manufacturers often find that these legacy ERP systems cannot fully meet their complex needs, and consider them largely obsolete.

Although many users are still satisfied with these legacy systems, companies are finding them increasingly difficult to maintain. However, they want to build on them, as they are incredibly stable but are dramatically outdated and not very flexible. They also lack specialists on the job market, as younger generations don’t seem eager to want to deal with these older technologies.

Two strategies are available for resolving this situation. The first is the revitalization of the existing software, including upgrades (with new user interfaces, features, and functions), and the addition of newer technology pieces. The second is the complete replacement of the legacy system with a new software system. But for large businesses, even the smallest change can wreak havoc on operations.

In addition, a system replacement is a lengthy process. During this time, a company’s business environment may undergo dramatic changes that may impact the company’s general strategies and information technology (IT) approaches. This in turn may prolong the timeline of the project and call its viability into question in the new company climate. All projects should thus be done as fast as possible, regardless of the size of the company, and for larger enterprises, this becomes a more intensive and expensive task.

2. Compliance with Laws and Regulations

As manufacturers continue to develop new products and expand their businesses into new frontiers, the more complicated it is to comply with local and international laws and regulations. Such standards have the potential to affect all major activities in the manufacturing sector—from procurement and production to distribution and retail, asset management, and human resources.

As medium and particularly large companies often operate in more than one region or country, they must follow the rules of the governing legislation while complying with various security, financial, safety, workforce, and many other local, national, and multinational standards. These regulations are intended for the general purpose of providing a business environment that stimulates and often directs the production of goods and services that are of the highest quality and are safe for consumers, society, and the environment. And, of course, different countries have different regulations. Even in countries with similar general compliance standards, differences in specific regulations exist, as, for instance, in the layout of safety documents or the details included in accounting reports.

Conformance regulation rules bring an additional layer of complexity to large multinational businesses that produce a wide range of products or render multiple services to their customers. The myriad compliance requirements documents must be properly stored and maintained. And these requirements must be properly applied and followed, and corresponding transactions typically need to be fully auditable.

For large organizations, it is also important that internal standards, policies, and procedures be subsumed under the compliance standards of the governing legislation. Although internal rules are typically created with regulatory requirements in mind, they can be extended and modified based on the company’s specifics, strategy and standards, best practices, and traditions. And it is expected that all company branches and subdivisions will comply with these rules.

Manufacturers must comply with governmental rules and regulations regarding the manufacturing, tracking, and storing of their products. As such, business processes must be designed in accordance to the governing legislation and standards. A central repository that hosts compliance documents and standards is strongly recommended, and an ERP system could be a good tool for integrating business processes with supporting documentation. On the other hand, as compliance standards are usually divided by vertical industry, and in some cases by market niche, it makes perfect sense for medium and large manufacturers to consider switching to a new ERP system that is specifically designed or deeply configured to that vertical industry. Such vertically oriented software packages usually handle compliance issues better and easier than broader packages.

Click here to read the rest of the research article on the TEC website.

About Technology Evaluation Centers (TEC)
Technology Evaluation Centers (TEC) is a global consulting and advisory firm, helping organizations select the best enterprise software solution for their needs. TEC reduces the time, cost, and risk associated with enterprise software selection with its advanced decision-making process and support application, software selection experts, and extensive resources.

Over 3.5 million subscribers leverage TEC’s industry-leading research and detailed information on more than 1,000 leading software solutions across all major application areas. For more information, please visit www.technologyevaluation.com.

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