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Written by

Anne Mulvenna

Seriously, Excel Is Not an ERP

Genius ERP: ready out-of-the-box for custom manufacturing.

Seriously, Excel Is Not an ERP.


Many manufacturing companies rely on Excel for all sorts of tasks, from scheduling to inventory management to data analysis, because it is readily available, easy to use, and is seen as a cost-effective solution for organizing and planning business operations. 


Hands down, Excel is one of the most multi-faceted, versatile, and useful business tools out there. 


But is it really the best solution for manufacturers? Does it save time and money? Should manufacturers rely on Excel to run their business?


The short answer is no.


While we are the first to admit that Excel is a handy business tool (and has its time and place), it is just not good enough for most manufacturers. Excel can do many different jobs and support many different functions, but it can’t manage the intricacies of a custom manufacturing business.


Today’s manufacturing industry is complex, and manufacturers need a more robust, more effective, more connected, and more specialized tool to run their businesses.


Manufacturing is, in fact, one of the most data-intensive industries out there, and to remain competitive, manufacturing companies need a solution that matches this level of complexity. Manufacturers need an integrated system, tailored to their specific operations and processes, that will give them better control over their data and the critical business processes and decisions that rely on it.


Manufacturers need an ERP system.


While ERPs are often seen as more expensive and slower to implement, the pay-off for manufacturers is huge. ERPs will save time and money, plus they will make manufacturers more efficient and effective by helping manufacturers complete more jobs on-time. 


An ERP system will manage all aspects of a manufacturing business, including production, planning, purchasing, manufacturing, sales, distribution, accounting, and customer service, from one fully-integrated system.


And, one of the greatest advantages of an ERP system is its ability to provide complete visibility of a manufacturing operation, equipping businesses with insights into how their operation is performing and helping them to make your shop the most efficient it can be.


Read on to learn why an ERP is better than Excel for manufacturers.


Table of Contents:

  1. The Magic Spreadsheet
  2. What Should You Replace Excel With?
  3. Excel vs. ERP - Who Will Win?
  4. Why Manufacturers Need an ERP for Inventory Management
  5. Why Manufacturers Need an ERP for Customer Relationship Management
  6. Why Manufacturers Need an ERP for Data Analysis
  7. Conclusion - Future Proof Your Business With an ERP

 

  1. The Magic Spreadsheet

One of the most common things we overhear from manufacturers is “everything is in the magic spreadsheet” or “we just use a magic spreadsheet to manage our shop.” 


In our experience, too many manufacturers rely on Excel spreadsheets to manage their business — and are paying the price.


Excel is a good business tool, but it’s not good enough to rely on to manage a complicated manufacturing business.

Don’t put all of your eggs in one basket.

For one thing, it’s too much of a risk for a business to put all of its eggs into one basket, so to speak. 


If you are relying on a spreadsheet — and the one person in your office who created and knows how to use the magic spreadsheet — to manage your business, all of your company’s institutional knowledge is locked inside that spreadsheet, and more significantly, inside that one person’s head. 


The magic spreadsheet’s owner, the Excel Guru, is the only one who knows how to use it, and if this person gets sick or goes on holiday for a couple of weeks, everything can grind to a halt.


What may be intuitive to the person who created your company’s magic spreadsheet may not be intuitive to others in your organization, and anyone beyond your Excel Guru may have difficulty understanding it — and knowing how to run your shop off of it.


And even worse, if your Excel Guru leaves your organization, all of your data and institutional knowledge walks out of the building with them. 

You need to be running your shop with real-time data.

The second big problem with spreadsheets is that they aren’t flexible and don’t offer real-time data. 


If a change happens to one of your jobs somewhere down the line, someone must capture all of the data from the change and then input it into the spreadsheet to keep everything accurate and the spreadsheet running like, well, magic.


If you are using Excel to manage your business, a common phrase you probably hear around your shop is: “Are you sure you are working with the right file? It doesn't look like the most recent version …” 


The truth of the matter is that it doesn’t even have to be anything as significant as a change to a job order to throw you off. It can be something as simple as someone forgetting to update your inventory levels (or simply mistyping your inventory levels) to have big consequences. 


You can think a job is running perfectly, but then a problem arises when you find out that you are out of an essential part — because the inventory levels weren’t correctly recorded on your spreadsheet — causing delays to the job, and ultimately, you shipping the product out late to your customer. 


And worse yet, what if a problem like this crops up on a day that the Excel Guru is out sick? Not good. 


Relying only on an Excel spreadsheet to run your shop means you are tying all of your institutional knowledge to an outdated, non-dynamic tool. (And don’t get me started about how difficult it is to create accurate reports from a spreadsheet that doesn’t contain real-time data…) 

You don’t have time to deal with the mess.

The last thing about magic spreadsheets is that they are really, really messy


It may seem great at first because all of your information and data are recorded in a single spreadsheet, and you can keep track of everything from one source. 


But over time, they get cumbersome and bulky, and can’t accurately or effectively keep track of all of the data that running a custom manufacturing shop brings with it. More often than not, the spreadsheet grows and starts to have multiple tabs and sheets, meaning data has to be manually entered and updated repeatedly in different places, leading to errors, and too much time spent on the up-keep of the magic spreadsheet. 


In the end, you will spend a lot of time and effort on your spreadsheet, and, realistically, you won’t get out of it what you need. 


Your data will be limited to being recorded job-by-job, item-by-item, and you won’t have the breadth of information, the real-time access to accurate data, or the connectivity that other solutions can offer you. Your magic spreadsheet won’t identify issues before they turn into problems, or pinpoint the things your business needs to focus on. 


Don’t let a magic spreadsheet ru(i)n your manufacturing business.


 

  1. What Should You Replace Excel With?

If you shouldn’t be relying on Excel spreadsheets to run your business, what is the best tool for manufacturers?

You need to replace Excel with an ERP system.

There are just too many problems with Excel to rely on it to run your custom manufacturing business. You need a more targeted and integrated system that runs off real-time data — one that can be updated automatically from the shop floor — to efficiently and effectively manage your manufacturing shop.


You need an ERP system. 


But an ERP is expensive, time-consuming to install, and complicated to learn, you might say.


While it is true that an ERP system is one of the biggest investments that a manufacturer will ever make, in terms of both money and time — we promise you, it will pay off in the long run. 

The ROI of an ERP system is immense, and manufacturers will see a significant reduction in costs after implementing an ERP system.

Getting an ERP system is one of the best business decisions you will ever make. 

While you will have to make initial investments in both time and money acquiring a system, getting it up and running in your shop, and training your employees to use it properly, an ERP system will change the way you do business.


An ERP system will manage all aspects of your business, including production, planning, purchasing, manufacturing, sales, distribution, accounting, and customer service, from one fully-integrated system.


One of the greatest advantages of an ERP system is its ability to provide complete visibility of your operation, making it easier to manage your business and giving you insights into how your operation performs


With an ERP, what used to take hours of sifting through spreadsheets and manual report creation, can be done automatically. Your ERP system will provide you with a sweeping overview of your operation, allowing you to measure critical performance metrics through real-time dashboards — and to run a more efficient manufacturing business.

Benefits of an ERP System:

  • Reduced human error
  • Accurate job costing
  • Better inventory control
  • Integrated and automated business processes
  • Reliable real-time data
  • Optimized production schedules
  • Better business analytics
  • Increased collaboration
  • Better decision-making prowess
  • Increased throughput
  • Better data control
  • Maximized shop capacity

In short, ERPs do it all.

ERP solutions not only include manufacturing, supply chain management, advanced reporting and business intelligence, project management, and financial and accounting capabilities, but they also can offer field services, sales force and marketing automation, and CRM management — everything you need to manage a manufacturing business in the 21st century.


An ERP will increase your performance by boosting productivity, optimizing your resource planning, and lowering your overall costs.



  1. Excel vs. ERP - Who Will Win?

Convinced yet? Or are you still one of the 70% of companies that uses Excel for sensitive and critical data and processes? 


Let's take a look and see how Excel and ERPs stack up against one another:

Excel vs. ERP — Error and Data Control

Let’s be honest, human error can creep into any system that people use — but Excel is especially susceptible to human error, and multiple studies back this up: 


According to a report from the University of Hawaii, 88% of spreadsheets contain errors;  Coopers and Lybrand found that 90% of all spreadsheets with 150 rows or more held errors; and in a sample of 22 spreadsheets, KPMG found errors in 91% of them. 


ERPs are a single integrated system, making them less vulnerable to human error. 


On the other-hand, Excel is an extremely manual tool. Instead of being centralized and integrated like an ERP, multiple departments within your organization will rely on different sets of Excel spreadsheets containing the same data. 


This means that the same data will be entered multiple times into multiple spreadsheets — meaning not only is that a huge waste of your staff’s time — but there is also a much greater chance for human error to creep in, as each time the data is manually entered, there is a chance for a data entry mistake. 


And once a set of spreadsheets get shared around, you lose all control over them


As there is no single source of truth for your data — like you’d have if you were using an ERP — you can neither be certain about what changes have been made to your data once a spreadsheet is shared, nor if everyone is relying on the right set of data.


For example, your production department might be relying on an old set of spreadsheets, or on sheets riddled with inadvertent errors, which can cause excess waste and throw off your entire production line.  


Excel is also based on formulas and functions to manipulate data, another place where human error can creep in. Even if you have an Excel Guru in your office, who knows the product backward and forwards, you’ll end up with bad data if a function is misentered. 


And there is also always a risk that someone can break a function — which can grind business to a halt, especially if your Excel Guru happens to be out of the office and can’t immediately fix the problem.  


On the other hand, ERP systems give you a single source of data for your entire company to use, reducing the risk of human error. 


You don’t have to manually enter data multiple times, nor share spreadsheets around with multiple parties. Everyone in your organization can access and rely on the same data set, so you can be confident that everyone in your organization operates off the most current and accurate set of information. 


ERPs also come ready built with multiple automated reports and analytical tools, meaning that Excel functions are a thing of the past. ERP systems eliminate duplication of tasks through automation and integration and make data manipulation easier and more reliable.

Excel vs. ERP — Efficiency and Collaboration

Excel is extremely inefficient for your organization because of all of the duplicate data entry it requires. 


For example, if you’re writing all of your quotes in Excel, you probably have to manually create sales orders from these quotes in a separate spreadsheet or system. 


Every report, quote, or order is created manually, sheet by sheet — meaning you are continually re-entering data. Additionally, the only way your inventory can be accurate is if someone goes in and manually updates your information every single time a part is used — which is unrealistic.


Using a program like Excel also runs the risk of losing files by accidentally deleting them or the system crashing.


Another problem with spreadsheets is that they’re isolated from the rest of your organization, making it challenging to collaborate. Though there are mobile versions of Office and Excel available, and even cloud-based Excel spreadsheets at Microsoft OneDrive, these products have distinct disadvantages. They do not always support collaboration and remote work — something more important now than ever. 


For instance, it is difficult to control spreadsheets when multiple workers try to access and alter the documents simultaneously. Conversely, a cloud-hosted ERP solution has built-in controls for managing multiple users and is designed to support remote workers in addition to your on-site workforce.


An ERP system allows you to track your information in real-time without the need for multiple spreadsheets


An ERP system will, for example, allow you to automate your sales order creation process so you can automatically convert quotes into sales orders with a click of a button. With an ERP, you can also easily search and find the data you need and efficiently share it between departments. 


Gone are the days of wasting time with double entry or lost data. 


ERPs also allow complete visibility of all your business processes through real-time dashboards. 


In today’s world, most businesses acquire a massive amount of business-related data every single day. An ERP system can efficiently use this data to provide critical insights into a company’s performance and improve your decision-making capabilities and business processes.

Excel vs. ERP — Financial Data and Analysis

Understanding your financials is essential to keeping your company in the black. 


Unlike Excel, ERPs can give you a real-time integrated financial workflow that automatically collects billing data from every area of the organization. This means that you have a centralized system for all financial activities, including month-end, invoicing, supplier payments, job costing, and payroll. 


With ERPs, you can have a real-time understanding of what your financials are, and you’ll know what jobs are putting you in the black or red. The manual processes inherent to Excel just can't power this type of analysis, but ERP software can.


ERPs can also analyze your employee performance compared to project costs and timelines. A comprehensive workflow system in your ERP can provide your team with the information they need at any time to ensure that whatever project they’re working on is on target. 


This information lets you know if the right people are working on the right project at the right time, and also allows you better allocate your resources and schedule your shop. No more costly downtime, thanks to ERPs — again, something Excel can’t do as it just doesn’t have the power or functionality to do real-time analysis.

And the winner is...

ERPs are the clear winner and come out on top for managing your data — and the critical business processes that rely on it. Though a good business tool, your shop deserves better than Excel to keep you running at maximum capacity.


  1. Why Manufacturers Need an ERP for Inventory Management

While you can certainly create inventory tracking spreadsheets in Excel, it is not the best inventory management option — especially for complex manufacturers. 


Dedicated inventory management and control software, like that found in an ERP system, will give you more features, including integration and automation, making your inventory tracking faster and more accurate.

What is Inventory Management?

Inventory management is the overseeing of all of your inventory and stock. 


It includes elements such as controlling and overseeing the ordering of inventory, storage of inventory, allocating inventory to jobs, and ensuring you are stocking the right amount of inventory to minimize holding costs and associated waste. 


If you don’t have a sound inventory management system in place, you will have stock emergencies far too often, meaning you will lack the raw materials needed to meet production demands — which can cost you time and money, lose you customers, and damage your reputation.


Getting a handle on your inventory management will help you avoid such situations and keep your shop up and running smoothly.

Where Excel Falls Short

Many manufacturers turn to Excel to manage their inventory as it is readily available, cheap, and easy-to-use. 


While you may think Excel is an efficient way to track and manage your inventory, it is costing you time and money — and let’s face it — plenty of headaches too.


Excel is not a dedicated inventory management system and lacks the specificity and features manufacturers, especially custom manufacturers, need. Excel lacks the integration, connectivity, and real-time data that other types of inventory tracking systems offer. 


Fully integrated inventory management systems, like those found within a manufacturing-specific ERP, will give you a proper inventory count — accurate to the second. Everyone in your shop, from purchasing managers to operations managers to shop floor employees, will know what’s in stock and where to find it.


Accurate counts will let you know what stock items you have on-hand and what needs to be re-ordered. Integrated systems will automatically alert you when stock levels are falling low, prompting you to put in an order to ensure you never run out of raw materials.

Errors

Mistakes in your inventory counts aren’t just frustrating — they can easily throw off your planning and production. 


Unfortunately, unlike an ERP system, Excel is especially susceptible to human error because it is an extremely manual tool. More sophisticated inventory management systems will let you track inventory through barcode scanning — not only eliminating human errors but also making it easier to have accurate inventory counts.

No Real-Time Data

Excel lacks the real-time inventory data that an ERP inventory management system will give you. 


With real-time data, you will always have an accurate inventory count. Not only does this make tracking and counting your inventory easier, but it also makes it easier to plan jobs, allocate inventory, and efficiently manage the purchasing process.

No Automation

The only way your inventory can be accurate when using Excel is if someone goes in and manually updates your information every single time a part is used — which is unrealistic. 


An ERP system can save you time and money by eliminating the daunting task of manually processing inventory management. With an ERP system, almost everything is automated, saving you time and money.

You need to manage your inventory with an ERP system.

Even if you have good inventory management habits in place, if you don’t have a dedicated inventory management system, you are costing yourself money and holding your business back. 


As a custom manufacturer, using an ERP system for inventory management is one of the smartest decisions you can make. 


Not only will you avoid the pitfalls of using a spreadsheet, but your inventory will automatically be integrated with all aspects of your operation, from planning through operations, production, and accounting. 


You will be able to manage your entire operation from one system and make your organization more organized, streamlined, and efficient.

Benefits of ERP Inventory Management

1. Integration

If your inventory management system isn’t integrated with the rest of your organization, you will never effectively optimize your inventory.


An ERP integrates your inventory management with the rest of your operation, making tracking inventory throughout your organization easy. An ERP system gives your staff instant access to a centralized inventory database — and one that is updated in real-time. 


This lets you know exactly what you can or can’t fulfill, what raw materials you have on hand, as well as gives you the confidence that what is recorded in the database matches what is sitting on your shelf, making not only production more efficient, but financial reporting easier as well.

2. Streamlined Business Processes

Accurate inventory management can help increase a manufacturer’s overall efficiency. Employees can spend their time on other tasks instead of, for example, trying to locate one particular piece of stock. 


With an ERP system, you can automatically keep track of the inventory you use on each job, which will let you do proper production planning as you know precisely the amount of raw materials you have on-hand, and what you need to order to complete a job. 

3. Forecasting, Restocking, & Managing Excess Inventory

An ERP system keeps track of sales, purchasing, and logistics for you so that you can have the right inventory levels to match your business needs. 


With an ERP, you can take advantage of an inventory management system that is in sync with the rest of your operation. This makes it easier for you to manage things like long lead-items, as you can know about these items during the design phase of a project to have more lead time to order the item and ensure you have it in time.


Knowing real-time stock levels also makes it easier to replenish inventory — an ERP can either automatically reorder materials for you, or send your purchasing manager a timely reminder letting her know that items need to be reordered. 


Without an ERP telling you that it’s time to replenish inventory, you may face enormous costs to expedite freight when you are desperately in need of stock.


As well, having insight into surplus inventory in real-time means you might have the opportunity to return stock, instead of letting it take up shelf space that something more important could be using. 

Save time and money with an ERP inventory tracking system.

Every manufacturing business owner knows that efficiency equals cost savings. 


Using an ERP for inventory management reduces the overall workload and minimizes expenses. Better managed inventory also equals more jobs out the door on-time and on-budget. 


ERP inventory management systems are designed to reduce manual labor by automating and streamlining processes — all of which go hand-in-hand with growing a business. And ERP systems let you collect better quality data, which gives you insights into your business to help you track your business performance and plan for growth.




  1. Why Manufacturers Need an ERP for Customer Relationship Management

Though you can easily use Excel to create a database of your customers, Excel lacks several of the key benefits of more dedicated CRM software. A proper CRM system that is integrated and automated will allow you to manage your leads and opportunities better, move your sales pipeline forward, and ultimately close more deals.

What Is a CRM?

CRM stands for Customer Relationship Management and is a software tool that helps manufacturers organize their interactions with potential and current customers. CRMs are robust tools that help you keep track of customer information and manage your sales processes. 

Why Do Manufacturers Need a CRM?

CRMs are a great tool to help you manage customer relationships — including managing customer information, leads, opportunities, deals, quotes, and order status — to create better customer experiences.


While many manufacturers think they don’t need a CRM, you do.


The manufacturing industry has evolved to be much more customer-centric over the last few years, and a CRM is an invaluable tool to help manufacturers be more organized, sell more products, and create happier customers.

What a CRM Can Help You Do:

  • Track customers and their order history
  • Identify business opportunities and new sales leads
  • Streamline the sales process and reduce repetitive work
  • Facilitate better support for current customers

What Is a CRM Dashboard?

A CRM dashboard is a customizable, personalized, and centralized hub that presents your customer information in a dynamic and interactive way, giving you a wealth of insights into your customers. 


CRM dashboards are a better way than Excel spreadsheets to view your customer information, making it easier for your sales team to stay organized and on top of your sales pipeline.


CRM dashboards allow each member of your team to customize their dashboard to easily access the information that they need to identify opportunities, prioritize their workloads, and move deals forward. With a dashboard, you can see information at a glance and gain real-time updates on your sales pipeline.

Why Is Excel Not Good Enough?

Though Excel can adequately create a database of your customer information, it lacks many of the features that a complete CRM software solution has to offer:

Data Visibility

CRM software presents your sales and customer information in an easy-to-understand dashboard, as well as the ability to quickly drill down further into customer records to access any information you or your team might need. 


On the other hand, Excel’s user interface is not nearly as user-friendly and doesn't allow you to access information on leads or customers quickly — Excel requires too much searching and scrolling to view information easily.

Integration

Integration — especially in today’s business world —is extremely important. 


Unlike Excel, a dedicated CRM system will easily integrate with other departments’ software tools, for example, moving lead and customer data directly into your accounting department. 


And better yet, a CRM that integrates directly with your ERP system will be a massive advantage for a manufacturing company. Manufacturers heavily rely on their ERP system to drive their operations, so having a CRM that is integrated with your ERP system will save time and make your sales team more efficient.


 A connected CRM means not only do you save time by not having to duplicate information between your two systems, but also that your sales team will have access to price lists, past deals, and other tools that will help your sales team do their jobs quicker and with more accuracy.


Bonus Tip: 

Creating quick and accurate quotes is a challenge for complex, custom manufacturers, but a CRM that is fully integrated with your ERP will make it much easier for your sales team to give your customers accurate quotes, as they can easily access historical data, price lists, and past deals to create quotes. If a product is more complex, they can quickly bring engineering into the process to develop and refine quotes to meet customers’ needs. 


Excel just can’t do that.


Security and Collaboration

A big problem with Excel is that it doesn’t easily support collaboration between departments. 


It is difficult to control spreadsheets and maintain accuracy when multiple workers try to access and alter the Excel document simultaneously. As well, with no single source of truth for your data, you also can never be certain about what changes have been made to your data or if everyone is relying on the right set of data.


CRM systems rely on logins and passwords, making it easy to manage who has access to your data and can make changes to it. Both collaboration and security are improved with a CRM system, making them a more dependable solution.

An ERP CRM dashboard will serve you better than Excel.

CRMs are a great tool to help you manage all of your customer relationships — including customer information, leads and opportunities, deals, quotes, and order statuses — meaning you will be more organized, sell more products, and create happier customers.


Using a dedicated tool brings with it many advantages:


Centralized Sales Hub

A CRM allows you to use dashboards and other tools to centralize all your sales conversations and information in one place, meaning your sales team will be able to manage all accounts, leads, opportunities, and communications within one system.


No more missed deals or opportunities because information got lost in the shuffle — or scroll of an Excel spreadsheet. 


Better Sales Performance

The tools included with a CRM will allow your sales team to keep on top of all your prospects and opportunities by creating and managing tasks and using a calendar tool to plan and coordinate sales calls. Personalized dashboards for each sales rep lets them have all the information they need at their fingertips to keep on top of all leads, opportunities, and manage their pipeline. 


The bottom line is that a more organized and supported sales team — and a better-managed sales pipeline — will lead to increased performance by your sales team and more closed deals.


Increased Customer Satisfaction

A CRM is also a valuable tool for managing the relationship you have with your current customers. Having more information about your customers can help you communicate more regularly and effectively with them, which will lead to a stronger relationship. 


When customer support is strong, and the customer relationship is well nurtured, customers tend to report higher degrees of satisfaction and heightened loyalty. 


What does this translate to for you? More repeat business from loyal clients who will return to you again and again for their needs.



  1. Why Manufacturers Need an ERP for Data Analysis

What is Business Intelligence? 

Business intelligence (BI) is the process of turning raw data into meaningful and actionable insights about your organization to make better, more data-driven decisions. 


BI solutions include the tools, technologies, and practices used to collect, analyze, and organize your data to give you a comprehensive view of your organization, and allow you to use your data to drive change and eliminate inefficiencies.


Business intelligence can help reduce operational inefficiencies, improve decision making, and boost productivity — ultimately letting you grow your business. 

Why Do Manufacturers Need It?

Learning to use business intelligence to sift through and analyze your data will help you become a more efficient, leaner, and more productive organization. Your data can show you where there are gaps or inefficiencies in your production line, and help you improve your manufacturing processes.


Using big data can help manufacturing companies address many of the common problems that plague manufacturers — and can be used across your organization, not just at the C-Suite level. 


Access to real-time data and data analysis gives decision-makers across your organization access to the data they need to make the best decisions they can to move your organization forward. BI can help improve your production scheduling, inventory control, financial management, and more.  


You will empower decision-makers throughout your organization to make faster and better decisions. For example, through dashboards that show real-time results, your production manager can keep a better eye on your shop floor and make quick adjustments if a bottleneck occurs or the scrap rate becomes too high. 


Using BI to improve your manufacturing operations can significantly impact your profit, setting you up for growth. ERP software that provides accurate, real-time information about daily operations helps companies reduce operational costs by 23% and administration costs by 22%.


The bottom line: today's most successful manufacturing businesses are built on a foundation of good, strong data.

Do I Need Specialized Software?

In short, yes.


Too many manufacturers rely on Excel to analyze their data and create reports. But, Excel is not robust enough — and does not offer the real-time functionality that manufacturers need.  


BI is made up of multiple processes and activities, including, for example, data mining, online analytical processing, performance metrics, querying, data visualization, and reporting. To perform these complex tasks, manufacturers need to rely on the right business intelligence tools. 


An integrated tool is needed to make sense of all of this data. 

You need an ERP to help you with data analysis.

The right ERP will not only house all of your data in one place but will have built-in BI tools to analyze data and create powerful reports to help manufacturers become more effective and productive. 


BI gives senior management the accurate facts, figures, and information they need to make strategic decisions and set your company in the right direction. Arguably the biggest factor in making good decisions is having access to the right data — data you can get from your ERP’s built-in BI tools. 


And you don’t need to be a data scientist to understand the information ERPs will give you. 


With a quality ERP system, you can take advantage of a full range of reports at your fingertips — invaluable when it comes to analyzing operations — making it easier to keep on top of your key performance indicators (KPIs) and attaining your objectives. Live dashboards display all the information your organization needs to stay on top of your operations and make better decisions.


Data from these live dashboards will give you all the information you need to set the right priorities to get jobs done and out the door on time. 


For example, through using dashboards that show real-time results, your production manager can keep a better eye on your shop floor and make quick adjustments if, for example, a bottleneck occurs or the scrap rate becomes too high. 

Avoid Costly Mistakes

Failing to use BI strategy to guide your organization means you may be ignoring important market trends, failing to implement efficiencies that will let you remain competitive, and making poor strategic decisions. 


If you are using an ERP to manage your custom manufacturing shop, you already have access to corresponding real-time data for your shop. 


Unfortunately, when it comes to BI and analytics, many manufacturers who have an ERP still rely on manual processes and Excel spreadsheets to sort through data and make critical decisions. Learning to use the built-in BI tools included in an ERP will make your shop run smoother and more efficiently.


Many manufacturers sit on reams of data coming out of their machinery and systems for years, but don’t know what to do with it. Learning to understand how to use this data and mastering BI in your shop will make your organization more effective, productive, and competitive.

Today’s ERPs have powerful built-in BI tools, so manufacturers need to take the time to learn the full capabilities of their system and work closely with their ERP provider to take advantage of these dynamic tools. 


Once mastered, you will be able to pull out valuable insights, create dynamic reports to understand your business better, make better business decisions, achieve your goals—and ultimately grow your business.

How Does an ERP Help You Make Better Business Decisions?

Arguably the most significant factor in making decisions is having access to the right data. Being able to respond quickly and appropriately to market demands will set you up for success. 


Your ERP can help you aggregate and analyze this information to unlock the data and create reports that will help you truly understand your business better. Armed with this information, you will make more informed decisions, create a more efficient shop, and be confident that the path you have chosen is the right one for your business.

One Source of Truth

An ERP system lets your business have a single source for information which is one of the most significant advantages of having an ERP system in terms of making decisions. With all of your data and information stored in one system, you can be confident that the data you are using to make your decisions is correct. 


No more tracking down spreadsheets from all of your departments only to find that there are discrepancies between departments. An ERP will let you access the data you need, when you need it, to make informed and timely decisions. Instead of constantly feeling that you are reacting and playing catch up, you can stay on top of your business.

Collaboration

Another critical way an ERP can help you make decisions is through the collaboration between departments that an ERP creates. A recent study by Aberdeen Group found that businesses with social ERP functionality are 2.5 times as likely to have real-time visibility into the status of all processes and are 145% more likely to have real-time collaboration across departments and divisions. 


When your departments share information through your ERP system, you will have access to more information and valuable insights from different teams within your organization, which will ultimately help guide you to make better decisions.


Improve All of Your Business Processes With an ERP:

Production Scheduling

  • Analyze employee, machine, workstation, and department capacity to learn how to move jobs through your shop efficiently
  • Reduce bottlenecks by creating better schedules based on actual capacities

Inventory Control

  • Effectively track inventory use across jobs for better inventory management
  • Avoid production interruptions by eliminating surprise material shortages and replenish based on actual on-the-job demand or for inventory

Supply Chain Management

  • Evaluate supplier performance regularly to negotiate prices better, ensure timely deliveries, and maintain high standards of quality

Financial Management

  • Develop budgets that incorporate production, operations, sales, fulfillment, as well as up-to-date financial figures for optimal forecasting and planning
  • Analyze information across multiple departments to set performance goals and to create accurate profitability and financial models

Cost Management

  • Trace job costs throughout the production process to get a true job cost
  • Assimilate information from the entire production process to create more accurate quotes and estimates


  1. Conclusion - Future Proof Your Business With an ERP


By now, you should be convinced that ERPs are the most effective business tool out there for manufacturers.


Excel may be the more straightforward choice, but it is incomplete and does not offer manufacturers the powerful tools they need to manage their shops effectively. 


Modern manufacturers not only need an integrated solution that can help them manage their business processes, but they also need a powerful tool to analyze their data and help them make better decisions for their business.


Nothing can do this better than an ERP system.


ERPs will also help manufacturers future-proof their businesses in ways that Excel cannot. As Industry 4.0 advances and the manufacturing world becomes more digital, manufacturers need an integrated system that can act as a foundation on which they can build further digital solutions.


Don’t hold your business back by only relying on Excel.


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