Production planning: The importance of ERP

Why ERP is important in production planning

Enterprise Resource Planning (ERP) is a software that can be used in all types of companies, but in the case of SEIDOR, there is a modular option specifically for production industries. The idea is that you have all the data you need for rational production planning.

Today, when talking about production planning, a holistic approach must be sought. You must have the necessary supplies, the availability of human resources and also check your financial situation in order to buy in time and adapt production to peaks in demand. All these factors and the emergence of Big Data require you to have a global perspective.

However, the active functionalities will depend on the characteristics of the modules that you have signed up for. The advantages for planning production correctly are as follows:

1. You control incoming supplies

One of the functions of ERP is the control of incoming supplies. This is essential in order to know what the previous needs are and to adapt them to the company's manufacturing policy. It should not be forgotten that this is sometimes a problematic situation, both because of the cost of the goods and the capacity of the inventory. Moreover, this will help to control any malpractice or improper leaks of supplies.
One of the most recurrent problems, historically, has been inventory mismatches. In this case, it is minimised because traceability control is end-to-end. Therefore, this also helps to plan production with less margin for error.

2. You have timely access to the warehouse inventory

Access to the inventory status of the warehouse is another key point. Knowing the amount of stock and the available references is essential to avoid the very dreaded stock-outs. In this case, risks are minimised since you will have timely control of these variables. And, above all, you'll know right away if you're missing something. It is not surprising that in certain situations this information is key.

Stock-outs are a problem, but so is the lack or shortage of a particular component. Knowing the status of the inventory in real time makes this eventuality much less likely. And it should be noted that it has traditionally played a key role in planning.

3. You are aware of the staff's availability

Staff availability is another important issue. It is necessary to make timetables or work shifts, as well as to plan holidays. Using ERP will significantly help you to improve your HR management and make a difference. For this reason, our advice is to have the complete software in order to avoid confusion. Note that production is not possible without the work factor, so you have to keep this in mind.

Human resources, in the end, have a more complicated availability, because supply and demand is more rigid than in goods and services. That is why knowing what the situation is at any given moment is essential to avoid problems due to a lack of manpower. With ERP you will be able to optimise the use of the work factor.

4. Information on customer orders is included

The Customer Manager (CRM) provides valuable information if you want to have data on customer habits and orders. This is particularly important in an industrial company because you can adapt your production based on the habits they have. In addition, you will be able to check the volume of each customer and their payer profile, which is also relevant. Consequently, this is an area that should not be abandoned under any circumstances.

Remember, however, that the bigger the company, the greater the importance of this factor in your production. The idea is that, in the end, you can adapt your production rhythms to your demand as best as possible, so that you can optimise them.

5. You will know your financial situation right away

Control of your company's financial situation is another benefit it provides. ERP allows you to know in real time what your bank balance is in different accounts, but also your payment rights and obligations. This is especially useful, too, if there is any invoice pending collection or if you have to negotiate any payment with your suppliers. Therefore, it will only be taken into account for rational production.

In short, you will have a wealth of important information to be able to apply it in your production decisions. Sometimes you may be interested in adapting your production rates to a certain economic situation in your company.

6. You will buy the supplies at a better price

The information included in ERP also includes information related to purchase history. This allows you, for example, to know which are the best suppliers, price history and volume. This is important when it comes to manufacturing because you can reduce costs. Most importantly, plan your production with the specifics of the factory in mind.

It should be remembered that some industries concentrate their production activity at certain times of the year, such as seasonal fruit, Christmas sweets or beach items. Therefore, making your needs compatible with the storage capacity, durability of supplies or demand peaks is particularly important.

Conclusion

Production planning is a key process if you want to be more competitive and efficient. However, to achieve this objective, you need to have the information in real time. Fortunately, today there are options that respond to this need. At SEIDOR Business One we have several options adapted to your company's needs. Ask us about it!