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Significance of ERP in the manufacturing industry

Published on: 13 Jan 2021

By Lavaniya

The manufacturing industry is extremely competitive. The market is flooded with manufacturers leaving customers with a plethora of options. To strengthen their market position, manufacturers need robust IT solutions that can boost business performance and thereby enable them to create high-quality products. One such game-changer is Enterprise Resource Planning (ERP) software.

ERP automates and simplifies business processes through a real-time view of data that can enable manufacturers to address concerns proactively and drive improvements.

The manufacturing industry faces many roadblocks, and here are some of the ways this trailblazing software can give businesses an edge over their competitors.

Automates and Streamlines business processes

You cannot overlook the importance of ERP in the manufacturing industry. It simplifies your existing business process in the following ways.

  • Reduces manual dependency
  • Data is easily accessible in a single, centralized location
  • Error reduction
  • Real-time tracking of production activities

Reduces costs

Using real-time information on warehouse status and production activities, ERP enables you to improve your company’s bottom line, reduce administrative and production costs. It assists you in inventory planning, procurement, and magnifies precision. ERP reduces the error rates on the production floor thereby minimizing labor expenses.

Enhances collaboration

According to FinancesOnline, an independent software review platform, 37% of growing enterprises prefer ERP over individual solutions because it is a better collaboration tool. ERP boosts coordination with your suppliers and distributors by managing order data, streamlining the supply chain process, and reducing product turnaround time. Communication and production data sharing between teams can be done with ease using ERP.

Amplifies customer experience

In the words of Jake Sorofman, Research Director at Gartner, “in many industries, hyper-competition has eroded traditional product and service advantages, making the customer experience the new competitive battlefield.” With an overabundance of alternatives, customer experience is the deciding factor when it comes to brand loyalty. Customers consider on-time product delivery as a vital performance parameter in the manufacturing industry.

ERP ensures timely product delivery through efficient inventory management, streamlined order processing, and scheduling. Another determinant that enhances brand loyalty is offering high-quality products to customers. ERP software minimizes production floor errors, therefore, improving the product quality.

Promotes Agility

Respond faster to market conditions, have better supply-chain visibility, and enhance cross-team communication with ERP. Reduce decision-making time using single-point data access.

Augments Security

ERP uses cloud storage to secure your company data. It ensures data protection using sign-in and access controls. ERP also releases periodic auto-updates to prevent data theft.

Improves Accessibility

Teams within your company need data to synchronize production reports. Sharing confidential product data using regular communication channels is a pain point because of the possibility of data theft. With a user-centric deployment style, ERP gives you the freedom to access data from anywhere safely. Since ERP is a cloud-based application, it can be accessed using any device.


According to Financesonline, the primary reasons why companies implement ERP is

  • to enhance their current business performance (64%)
  • to put their company in a better position for growth (57%) and
  • to reduce their current working capital significantly (57%).

The role of ERP in the manufacturing industry has gained prominence for the benefits it provides. Manufacturing companies must implement ERP for hassle-free operation, staying ahead in this competitive sector, and scaling-up their business.

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