How to reduce manufacturing costs with an ERP system

But what exactly is an ERP? How does it help reduce manufacturing costs? Which ERP should I choose for my business? We cover all these questions in this article so you know what the next steps you need to take in your company are to reduce manufacturing costs.

What is ERP?

First to answer a recurring question: What is ERP? The acronym ERP stands for Enterprise Resource Planning. Simply put, it is a system for planning business resources. This system can also be known as integrated management software.

In any case, the aim of the ERP is to facilitate the management of a company's internal processes and to unify them all in a single tool. As a result, productivity is increased and collaborative work is strengthened among the different departments.

Implementing management software always has advantages, whether in an SME or a large corporation. Nonetheless, it is particularly beneficial in product manufacturing companies, as they are businesses that need to control a wide range of parameters. And I'm sure you agree with us that managing the manufacturing process efficiently should be the goal of any industry.

How does an ERP help reduce manufacturing costs?

By allowing you to be more efficient and productive, which is synonymous with greater profitability in a business. However, as we want to be more specific, we propose a review of the main benefits of an ERP in industry. Or, to put it another way, to find out how management software helps to reduce manufacturing costs.

Improve planning

Planning industrial processes is essential to avoid wasting resources., ERPs, such as SAP Business One, come with a number of integrated tools that facilitate the creation of action plans within factories. This means less time wasted, objectives met, and all operations executed more quickly.

Controls the entire production cycle in detail

The control that an ERP offers over the production cycle is complete. An application such as SAP Business One allows you to do all this:

• Improve inventory accuracy and control.
• More efficient invoicing, with better control of costs and revenues.
• Shipment of orders always on time.
• Standardisation of business processes.
• Optimisation of current capacity to do more with the same resources.

Oh, and remember: if you choose management software that works in the cloud, you will have all this data available from anywhere, accessing it with your computer or mobile device.

Collaborate with other departments of the company

Collaboration is another strong point of ERP. The most up-to-date ERPs operate in the cloud, making the necessary data available to all employees. As a result, different departments can work in unison, sharing a database of critical company information.

Manage your relationship with suppliers

Suppliers are a key element in saving manufacturing costs. Without a system that makes it easy to query data, it is very easy to overpay for goods. With an ERP you can get valuable reports with all the information you need. Analytics allows you to rethink the price you pay for your raw materials and look for cheaper or better quality options.

Automate manufacturing chain processes

Every industrial process consists of smaller processes that are repeated over and over again. Automation allows companies to devote more effort to the really important processes, relegating those that are secondary or recurrent to the ERP. The result is excellent: employees do more at the same time, eliminating human error, which is so common in repetitive tasks.

Eliminate unnecessary processes

An ERP also helps you to detect unnecessary and time-consuming processes. When management software is well implemented in a company, tasks are completed following productivity patterns set by the application. At that point, you may find that many of the tasks that have been performed up to now are not really necessary.

Improve customer service

What does customer service have to do with reducing manufacturing costs? At first glance, not so much. But building customer loyalty and offering them the best experience will make them trust your company. If customers are truly satisfied, they will commit to your brand, even if it is necessary to raise prices.

SAP Business One, the comprehensive solution to reduce manufacturing costs

SAP Business One is the solution that thousands of companies around the world have chosen. It is a comprehensive management platform that adapts to all business models. Its modules have been designed to work in a coordinated way and to allow the company's departments to collaborate efficiently.

As we have discussed in this article, manufacturing costs can be reduced in a number of ways thanks to the tools included in ERP.

A more productive business is essential to increasing profitability, and SAP Business One is an expert in this area. You may be wondering what you need to do to integrate such a successful platform into your business. It's simple: contact a reliable service provider.

Do you want to implement an ERP in your manufacturing process? At SEIDOR, we have been helping companies of all kinds to get more out of powerful tools such as SAP Business One ERP for decades. Our specialists will accompany you throughout the process so that your company never walks alone. Contact us now and start reducing manufacturing costs with your new ERP!