The effects of the pandemic have been far-reaching and have impacted virtually every industry. As manufacturing materials shortages and a massive supply chain disruption continue to plague manufacturers, they are presented with a seemingly insurmountable challenge. Demand is high, yet manufacturers are unable to meet this demand due to a lack of access to the raw materials needed for production. While frustrating, these challenges can be overcome with a manufacturing-specific ERP system.
The challenges currently facing the manufacturing industry
Reuters reported towards the end of 2021 that U.S. manufacturing activity had slowed due to a shortage of materials. This shortage is a direct result of strained supply chains and the need for materials ranging from wood, steel, and plastic to semiconductors chips to manufacture goods such as cars, electrical equipment, and appliances consumer demand. The increased cost to manufacturers due to this scarcity has been passed on to the consumers in the form of higher prices for these products and decreased availability.
A NextAdvisor article reports that the “February [2022] consumer price index, which measures changes in the cost of food, housing, gasoline, utilities, and other goods, rose by 7.9% over the past 12 months—the largest inflation surge in forty years.” Things have not improved much since then, with the Consumer Prices Index rising by 9.3% in the twelve months to November 2022.
There are several reasons behind this current materials shortage, including an increase in demand due to pandemic-related purchasing patterns (such as people buying more cars and appliances while staying home), global trade restrictions preventing imports from certain countries, labor shortages resulting from pandemic-related restrictions, transportation delays caused by port congestion, and a surge in e-commerce orders overwhelming already overloaded delivery networks. Furthermore, factors such as rising shipping costs due to fuel surcharges have further exacerbated the problem. In addition, some manufacturers have also experienced problems with their own production systems that have resulted in further shortages or delays of essential components needed for their products.
Manufacturers are feeling the pinch of this material shortage as they experience longer lead times for items necessary for their production processes resulting in slower production rates and decreased overall output. Furthermore, with fewer items available, competition among buyers increases which can also lead to price inflation. Ultimately, this materials shortage may mean that some companies will be forced out of business altogether if they cannot adapt quickly enough or find alternative suppliers quickly enough.
How cloud ERP can help overcome these challenges
Fixing supply chain disruptions and geopolitical challenges is not part of a manufacturer’s role, but with the right cloud ERP solution, they can alleviate some of these problems.
First things first: what is Cloud ERP? Cloud Enterprise Resource Planning (ERP) software is a technology solution that helps manufacturers manage their business operations from one central platform. It allows organizations to run their entire supply chain from a single platform, eliminating the need for multiple disparate systems. This means that users can access data from different departments in real-time, allowing them to make informed decisions quickly and efficiently.
A cloud-based ERP solution provides numerous benefits for manufacturers dealing with supply chain disruptions. It enables them to better manage inventory levels and optimize stock utilization by keeping track of customer demand and ordering patterns in real-time. This helps organizations increase efficiency while cutting costs associated with overstocking or understocking inventory. Additionally, it gives them greater visibility into the entire supply chain process so they can identify areas of improvement and make corrections more quickly.
How a manufacturing-specific ERP can take your business to the next level
While there are many ERP solutions on the market capable of helping manufacturers become more productive, only a manufacturing-specific ERP can provide you with the specialized features needed to stay competitive in this highly complex and rapidly evolving industry.
1. Unify Processes with a Comprehensive System Designed for Your Industry
A manufacturing-specific ERP is designed specifically to meet the needs of manufacturers by providing them with comprehensive solutions that unify their production processes. This allows manufacturers to easily access detailed data on all aspects of their operations, including inventory management, supply chain management, product lifecycle management, sales order processing, and more. With such detailed information available at their fingertips, manufacturers can make informed decisions about their processes and ensure that they remain competitive in an ever-changing marketplace.
2. Improve Your Customer and User Experience
Manufacturing-specific ERPs also come with features that can help improve customer satisfaction by providing customers with better visibility into their orders. This includes features like automated order tracking systems which allow customers to easily track changes in orders or shipping status, as well as customizable dashboards where customers can view real-time information about their orders. These systems also come with robust analytics tools that help businesses gain valuable insights into customer behavior, so they can develop strategies to improve customer experiences and drive greater ROI.
3. Prepare for the Factory of the Future with a Modern & Extensible ERP Platform
Finally, using a modern and extensible manufacturing-specific ERP platform will help prepare your business for the factory of the future. This type of platform will enable your business to take advantage of cutting-edge technologies like artificial intelligence (AI) and machine learning (ML). These technologies can automate certain tasks within your organization, such as order processing or inventory management while giving you complete control over what is being done. Additionally, these platforms are highly extensible, so you can easily add new features or integrations as new technologies become available without upgrading your entire system from scratch each time something new comes out.
Choosing the right manufacturing-specific ERP solution
Manufacturing-specific ERP solutions provide integrated applications for production estimating, engineering material planning scheduling, and product configuration—for both discrete and batch process production, giving manufacturers access to reports analytics dashboards they need to succeed even when facing challenging times such as the ongoing materials shortage or supply chain disruptions.
With an integrated set of connected applications, manufacturers are able to save time, avoid manual processes across multiple systems, improve efficiencies through automation tasks across departments focus on strategy while gaining actionable insights into their performance metrics, making it clear that an effective manufacturing-specific ERP solution is essential for success in today’s landscape. To learn more about our ERP solutions for the manufacturing industry, click here.
