ERP ROI for Executive Director of Manufacturing and Distribution – News Couple
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ERP ROI for Executive Director of Manufacturing and Distribution

The pandemic has prompted manufacturers and distributors to shift rapidly from addressing work-from-home policies to managing extreme fluctuations in demand and uncertain supply chains. The 2020 SYSPRO survey shows that 60% of manufacturing and distribution businesses have been affected by supply chain disruptions during the pandemic. In fact, 29% of companies stated that they would explore initiatives to meet urgent needs and accelerate digital transformation. For the manufacturing and distribution executive, the challenge is not just to return to pre-pandemic operations, but to craft businesses that appear more resilient than before.

Addressing Industry Weaknesses Using ERP

The latest report on global manufacturing reveals that industries that have adopted new technology are starting to recover faster from the epidemic, with increases of at least 10% in the first quarter of 2021, while low-tech industries recorded a relatively lower growth rate of only 5.8%. The technological challenge is one that requires proactive action from the CEO. This allows for more than just catering to customers online and managing operations remotely, but it provides an opportunity for organizations to run smarter and improve processes and efficiency which will have an impact on the bottom line. The selection and deployment of ERP software can be a game changer and provide CEOs with the ability to build and modify business processes for success. Here are examples of the tangible return on investment (ROI) that ERP can bring to your business:

  1. Maintain competitive advantage with ERP

Over the past year, those who were the most powerful have held out. Through our research, 67% of businesses reported that due to digital initiatives such as e-commerce, digital supply chains, and remote work, they can continue to trade effectively during the pandemic. During the pandemic, ERP has kept industries running thanks to its ability to maintain business operations with remote data access, automated reporting, electronic data exchange, and real-time factory controls.

  1. Use ERP to improve operations and efficiency

According to 2021 G2 ERP stats, 95% of companies achieve significant improvements after using ERP by reducing process times, increasing collaboration, and centralizing enterprise data. ERP provides manufacturers and distributors the opportunity to integrate all their data into the same system that provides more accurate monitoring of production floor, demand forecasts, and information sharing. Companies can control inventories, avoid overproduction, and implement more cost-effective practices in their operations. Relying on disparate or outdated systems can really affect efficiency and bottom line. ERP reduces operational and administrative costs. For example, an Enterprise Resource Planning (ERP) system facilitates inventory counting and automation of accounts to improve cash flow.

  1. ERP to drive business strategy and visions

Initiatives that will meet your ROI as CEO will be driven by and through the data of the factory floor itself. It is important for the CEO not only to identify new opportunities for process automation and improvement but to use data to improve manufacturing and distribution performance. ERP provides a comprehensive view of all the key elements from finance and inventory to operations and sourcing. This will enable the CEO to act on this information, manage risks and make strategic decisions with favorable profit and cost consequences. This will also enable the CEO to not only understand the business but the customers better to scale and support the growth of the business and new markets.

The next step for the CEO

2021 G2 ERP statistics also reveal that about 28% of organizations have achieved a return on investment within the first year of ERP adoption, and more than half (58%) have done so in less than two years. It is imperative that the CEO of Manufacturing and Distribution understands that ERP provides a tangible return on investment that allows the business to expand into new markets, increase revenue, improve efficiency and agility, reduce risk while strengthening customer relationships and producing quality products and services.

Moving your manufacturing or distribution organization to the next level of growth requires a robust and integrated technology foundation, which includes a well-matched ERP solution from a trusted advisor. CEOs must take a step-by-step approach and be clear about business goals and the impact of these solutions. Don’t make the mistake of thinking that investments in technology will automatically lead to changes in business operations. You will also need to apply process transformation to truly see the results of your digital transformation.



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