Significant Efficiencies Await Manufacturers That Automate Processes, Revitalize ERP

Manufacturers may

be reaching an inflection point in their slow but steady march toward

modernization of their planning, production, and accounting processes,

according to some recent researches.

For example, Software

Advice, an online marketplace and evaluator of business software, surveyed more than 2,000 manufacturers over

the past year about their software buying plans and found that the majority —

60% — are in the process of replacing their old paper- and spreadsheet-based

methods of tracking production with software systems. The other 40% were

already using some type of automation. The top reason for replacing manual

methods with software: improving efficiency, chosen by 64%.

Increasingly, manufacturers

are looking toward their ERP systems, more specifically cloud ERP systems, to

help spur that efficiency. Industry analyst firm Gartner Inc. has predicted that 47 percent of

manufacturers worldwide will be using or piloting Software as a Service (SaaS)

applications by 2015, up from just 2 percent in 2012, a growth of 2250% (yep,

over two thousand percent growth).


manufacturers are often perceived as being slow to invest in IT, progressive

companies are investing in next-generation cloud solutions and finding that a

comprehensive suite of business applications are available without heavy

investments in servers, data centers and IT personnel. Indeed, according to

Software Advice, there is a specific set of manufacturer seeking to consolidate

multiple applications into a single system. Of manufacturers replacing their

existing software, 30% were doing so because it was old, outdated or

unsupported, according to Software Advice. The efficiencies that can be

realized with a new system are tremendous and mature, proven cloud ERP systems

make implementing a new system without a huge upfront investment easier than


Some of the

benefits of moving to automated manufacturing systems, according to the Software

Advice report, include: better planning and resource allocation thanks to

improved insight into the actual costs of inventory, labor and equipment; the

elimination of waste and scrap thanks to planning and tracking capabilities;

and easier, quicker production of compliance documentation for manufactures

subject to regulations on their output or raw materials.

The most

comprehensive suites — end-to-end,  integrated manufacturing suites that combine

front-end estimation and planning with work-in progress management capabilities

and back end accounting functions — offer additional efficiencies. They can automate

complex analysis and tasks that would otherwise require time and labor to

accomplish. That includes tasks such as converting an estimate into a project

budget, or matching invoices to project status when allocating job costs.

Two other

noteworthy trends from the survey: both cloud-based software and mobile access

are on the rise in manufacturing.  The

reasons both relate to efficiency. Mobile devices on the shop floor enable

operators to enter data immediately into the system rather than having to write

it down and carry it back to a workstation. Likewise, cloud-based computing systems

such as NetSuite for Manufacturing are gaining popularity due to their lower

up-front and maintenance costs.

-Ranga Bodla, Director, Industry Marketing, Wholesale Distribution and

Manufacturing at NetSuite

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