If you’re one of the few companies that have managed by some sort of miracle to stay afloat without integrating and implementing manufacturing ERP software or you might be one of the people who want to start such a company, you’d have an extremely hard time competing without integrating an ERP suite.
This article’s goal is to show you all the disadvantages you’ll be facing if you don’t adopt this vital piece of technology in manufacturing ERP software.
4 Harsh Realities of Not Integrating Manufacturing ERP Software
#1 Bookkeeping Complexities
Nowadays, we sometimes forget how difficult manual bookkeeping is. This holds true especially for a manufacturing business, as you need to keep track of a lot of products, employees, externalities, clients, and many more things.
If the business were to grow to a reasonable size, you’d need to hire multiple employees to manage all the bookkeeping – not to mention the difficulty of analyzing the data when it comes to decision-making.
Of course, not many businesses do traditional bookkeeping. Rather, they use simple programs like Microsoft Excel, which is a step forward but still widely inadequate for today’s business environment:
- These programs usually don’t have the specialized capacity to deal with all the different types of data you need to manage in a manufacturing business
- The data processing capabilities are woefully inadequate, and you’ll need to go through many hoops to make sense of the data.
- There’s no built-in functionality to tie in different parts of your business together, and creating relationships in these programs usually takes a lot of time.
#2 Analytics and Long-term Planning
The inability to collect a large amount of data and process that data leaves you with a huge blind spot when it comes to running your business.
Today, most big businesses have dedicated departments that collect, process and analyze data to be able to market to their clients and customers, foresee and detect market trends early on, and invest wisely in their business.
That’s why so many companies that don’t adopt data collection and analysis technologies quickly go bankrupt. Especially in today’s more competitive business environment, it is paramount that you have a clear picture of the sector you are in and are ready for any potential opportunities.
Not knowing how the market evolves over time and where to invest is a surefire way of ensuring your business is a failure.
#3 Client Management
Right now, most businesses don’t have cheaper services as their USP (unique selling proposition). Instead, personalized services that provide unique value to each customer based on their needs are more common.
Of course, you need a complete overhaul if you want to go the personalized services route, but one key technology you need to implement before even thinking about that route is an extensive data logging, processing and managing program suite.
Getting access to this data and being able to analyze it gives you a lot of information about your clients, their habits, and their needs. For starters, you’ll be able to give a particular discount to select customers at the right time to maximize profits, you’ll be able to tell when a customer is willing to pay more for a particular product, and you’ll be able to tell which product a customer likes the most and which ones he thinks is terrible.
#4 Bureaucracy and Inefficiency
One thing the last century has taught us across politics, economics, and business is the fact that bureaucracy involves a lot of wasted man-hours, a stifling of creativity, and death for the government or economy or business.
The integration of an ERP program will streamline communication between the different parts of your business and cut down a lot of middle management.
Of course, if your business is small with only a couple of employees, you might not incur a lot of losses from inefficiency, but as you grow bigger, the inefficiencies compound and your business become less and less agile.
That’s why you should consider investing in ERP software as early as possible to cut down on your losses early and be ready for possible expansions. You can always get a small company ERP program early on that doesn’t cost much and responds to the unique needs of a small business before upgrading to more complex ERP programs if and when the company gets bigger.