Trends for ERP in Manufacturing in 2021

Much has been said about how revolutionary Industry 4.0 has been to the manufacturing industry, and the many opportunities that the use of advanced tools and technologies throughout the product life cycle has brought to manufacturers. Rightly so, as Industry 4.0 has seen the successful introduction of technology that increases operational visibility, reduces costs, expedites production times, and allows manufacturers to deliver outstanding customer support.

 

It is indicative of the rapid rate of innovation which the manufacturing industry is experiencing in that, in only a few short years, we have progressed to the next phase of the industrial revolution and, according to Deloitte, find that Industry 5.0 is upon us. Phill Cartwright, executive chairman of the Centre for Modeling and Simulation sums it up nicely for us: Industry 4.0 is the bringing together of robots, interconnected devices and fast networks of data within a factory environment, to make the factory more productive and to execute the routine tasks that are best done by robots and not best done by humans. Industry 4.0 starts to move towards Industry 5.0 when you begin to allow customers to customise their requirements.

 

Essentially, consumers prefer a degree of “hands-on” personalisation and customisation of their products, which can only be achieved when people and technology work in tandem in the manufacturing lifecycle.

 

But First, What is a Manufacturing ERP System?

 

An enterprise resource planning (ERP) system is a system upon which an entire organisation operates.

ERPs consolidate and unify all the diverse parts of a business by providing a single source of truth and repository for data, housing everything from estimates to purchase orders to financial reports to human resources in one place.

 

Whether your organisation is in Industry 4.0 or 5.0 there is no doubt that manufacturers should continue to embrace change and technology such as ERP systems in order to stay ahead of competitors and win market share in this dynamic industry.

 

According to KPMG, 67 percent of CEOs believe that acting with agility is “the new currency of business; if we’re too slow, we will be bankrupt.”

 

The Big Five: Cloud Technologies, IoT, Big

, AI, and RPA

 

Big 5 Key Takeaways

• More manufacturers are opting for cloud ERP solutions as outdated legacy ERP solutions are typically unable to deal with the masses of data being generated or harness the value of IoT.
• Cloud ERP solutions bring the benefits of expensive on-premise ERP systems to SMEs at a price they can afford.
• The prevalence of hybrid ERP solutions that integrate best-of-breed applications to form one unique system is on the rise.
• The use of AI in ERP quickly transforms masses of complex and unstructured data into actionable insights.
• Mastering data and streamlining operations are key to driving customer value.
• AI and machine learning are considered essential to digitally transform organisations and make all processes more customer centric.
• RPA can automate hours’ worth of human admin processes.
• Integrated ERP allows third party best-of-breed applications to update core data and reduce loading times and errors related to data processing.

 

Even though the Internet of Things (IoT) is already a common occurrence in the manufacturing industry, it remains at the top of trends lists every year due to its adaptability and innovation.

Similarly cloud-based ERP software isn’t breaking news, but is still one of the most game-changing trends in manufacturing organisations.

 

Cloud ERP Applications are Right Now

 

 

In the past, ERP systems were only available as on-premise solutions that incurred significant startup fees and hardware costs, making them too expensive for smaller businesses. The emergence of cloud computing saw ERP applications become a more viable option for SMEs. With flexible, modular, customised solutions available with cloud-based ERP solutions, business owners gain the benefits of big-brand, on-premise ERP systems at a more affordable price.

 

Not only is all-in-one cloud ERP gaining traction in manufacturing, there is a rising number of organisations opting for a hybrid ERP approach where best-of-breed applications integrate to form one tailored cloud ERP system. According to a recent Accenture ERP trends report, 51 percent of chief information officers (CIOs) prefer cloud ERP, 35 percent use on-premise solutions, and 10 percent now use hybrid ERP tools and that number is set to grow in the coming years.

 

Thanks to cloud-enabled technologies, ERP solutions are no longer tied to a single machine. This anywhere, anyplace access to your business solution means that both back-end and front-end activities are available on mobile devices such as tablets and smartphones.

 

The benefits of mobility

• Improves productivity.
• Supports faster decision-making.
• Lowers the risk of production delays.
• Supports the ever-growing trend of a remote and dispersed workforce.
• Enhances overall efficiency. The Aberdeen Group’s recent research shows a 40 percent increase in operational efficiency for companies that implemented mobile ERP.

 

Manufacturers Gain Greater Visibility into Big Data with IoT and ERP

 

 

Renewed interest in the Internet of Things (IoT) and increased emphasis on predictive maintenance means big data is an even bigger trend than ever before.

 

IoT gives manufacturers insights to their processes, costs, and productivity, as well as information about the supply chain such as the quality of parts and products being used, their origins, and how they were grown, bought, or created. This meets the growing demand for responsible manufacturing by consumers.

 

According to Deloitte Insights’ recent survey, mastering big data and creating more intelligent workflows produce the highest payoffs in manufacturing industries.  The ability to collect real-time data from  an almost unlimited number of sources, combined with increasingly powerful cloud computing capabilities built into modern ERP solutions, makes it possible for manufacturers to gather, sort and analyse data in ways that provide them with a comprehensive understanding of their business.

 

This translates into getting real-time data regarding machine and staff performance and closer monitoring of the production process. The need for less manual input also means less reliance on technicians and faster, more automated operations.

 

However, in spite of the clear benefits of integrating IoT and ERP systems, the adoption of this trend is hampered due to the prevalence of legacy ERP solutions that were simply not designed to take in data from a network of sensors. It is predicted that 7.5 billion IoT devices will be integrated into their operations in the near future, and with it, the investment in modern ERP systems needed to interface the network to fully maximise IoT’s benefits and capabilities.

 

Greater ERP Integrations: AI, RPA, and 3rd Party Applications

 

 

Artificial Intelligence (AI) and robotic process automation (RPA) have been the talk in the ERP industry for a few years now. According to KPMG’s Global Manufacturing Outlook report, 41% of CEOs say these technologies will improve data governance and data analytics capabilities. Integrating these powerful technologies into your ERP system transforms business data into actionable insights and dramatically increases automation of mundane, repetitive back office functions.

 

Fueled by the rise of unstructured data created by businesses, AI-driven ERP serves to analyse vast amounts of data and predict trends at speed. This provides decision-makers with near real-time reporting and forecasting that supports vital decision-making.

 

RPA engages directly with the ERP system, much as a human would, and initiates transactions, executes programmes, and extracts reports. When RPA is integrated with your ERP solution it removes the need for staff-heavy admin teams as it can automate hours’ worth of routine processes. This frees up your employees’ time and allows them to focus on more valuable work.

 

3rd party integrations are another way of customising and tailoring your business software solution. Applications such as point of sale (POS), warehouse management systems (WMS), and business intelligence (BI) tools can be integrated seamlessly with modern ERP solutions thanks to the ERP’s API architecture.

 

The benefits of Integrated ERP

• 10–15% reduction on manufacturing cost
• In depth analytics facilitate better decision making
• Days saved per week in manual, repetitive tasks
• Faster insights, more accurate forecasting
• Best-of-breed applications communicating and integrated for a total ERP solution

 

The Other ERP Trends in Manufacturing to Watch

Not as high-profile as the above-mentioned big five, these trends are driving innovation with ERP vendors based on demand from the manufacturing industry.

 

Analytics is Gaining Power

Where legacy ERP systems were lacking in data analysis functionality, modern ERP systems are now equipped with powerful data analytical features in core. ERP solutions store and organise all transactional and business data in one central place, unifying data and providing an ideal platform as an analytics tool. Subsequently most manufacturers with modern ERP systems are enjoying integrated analytics, fast and accurate reporting, and data visualisation capabilities. The future of ERP analytics points to an end-to-end tool that can process both structured and unstructured data.

 

Personalised, Tailored ERP Deployments

The one-size-fits-all approach to ERP systems is rapidly becoming a thing of the past. Whether your cloud ERP is highly configurable with powerful integration capabilities, or your all-in-one ERP solution can be customised to create a total business solution, manufacturers are insisting their ERP implementations are designed to meet their exact needs. ERP solutions come as industry-ready systems that are then customised to support the unique requirements of each business.

This ensures faster deployments without compromising on flexibility.

 

As manufacturers move away from off-the-shelf ERP systems, so too the need for experienced, professional ERP implementation partners rises. The reason is clear – if you hope to deploy a highly tailored ERP system that matches the unique requirements of your organisation on time and within budget, you need an implementation partner who understands your vertical and has in-depth knowledge of the ERP software you have chosen. To gain the most value out of your ERP investment ensure you select a partner who also provides training for your team and ongoing support.

 

What is Next for ERP Solutions in the Manufacturing Industry?

In today’s rapidly changing economy, manufacturers need to adapt at speed in order to accelerate growth. Knowledge of changes in customer demands and trends requires access to real-time data, which legacy ERP systems cannot provide. Today, the use of modern technology is the business differentiator.

 

Cloud ERP systems that are customised by trusted, experienced implementation partners create capacity for improved production, rapid changes, and more accurate insights for improved business results.

 

ERP systems are fundamental to manufacturing organisations and will be part of the manufacturers operations for decades into the future. Not only do they keep the business running, they ensure the business will run optimally for years to come.

 

If your legacy ERP solution is ready for an upgrade, or you are not sure which ERP solution your manufacturing organisation should implement, why not talk to one of our experienced consultants? We are experts in ERP customisation, integration and deployment in the manufacturing industry, and we’re ready to help you equip your business for the future.

 

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