How ERP Software Impacts Quality

March, 2022

Enterprise software is a type of computer software that enables a complete organisation to improve its business and management reporting capabilities. In an ideal world, such initiatives would enable manufacturers to address enterprise-wide issues rather than departmental issues. They may help businesses increase their productivity and efficiency by assisting them in displaying, managing, and storing enormous volumes of frequently complicated data and by processing that data to their benefit. 

According to Dawn Brusseau, product marketing manager at Plex Systems Inc., ERP software "creates a single source of truth for a company" by keeping all members informed of current operations and establishing traceability and monitoring processes. 

Brusseau says that ERP software enables real-time updates that enable teams to quickly pivot in the event of an abnormality, but it also ensures data consistency by ensuring that every member of the organisation has access to the same numbers for financial and production reporting, removing silos. 

Maintaining rising quality standards, higher customer expectations, and compliance requirements while working in complicated global supply chains places an immense strain on manufacturers, according to Guido Van den Broeck, director, product management, QAD. 

Fortunately, ERP systems can alleviate many of these demands, Van den Broeck explains. The purpose of ERP systems is to automate and consolidate company data into a single source of truth.

Rather than continuously apologising for returned parts, manufacturers may discover and replace defective components prior to shipment, according to Mike Melzer, vice president of service and operations at Global Shop Solutions. 

"[Manufacturers] may quantify the cost of quality down to the component level, while maintaining scrap levels that are comparable to or better than the industry norm," Melzer explains. "This provides them with a competitive advantage in order to maintain client confidence." 

Because ERP provides the data necessary to easily identify areas for continuous improvement — such as reducing process waste or identifying excesses in transportation, inventory, motion, waiting, over-processing, overproduction, or other key performance indicators — it enables businesses to track and measure the total cost of quality, or the cost a manufacturer must bear in terms of utilising resources to maintain qualitative outputs for their target customers, according to Van. 

While there are several advantages to implementing an ERP solution, Brusseau notes that the most significant are that it simplifies company reporting, safeguards data, and ultimately fosters corporate development. 

Brusseau explains that prior to ERP systems, manufacturing processes were conducted entirely on paper, which had to be routed from the floor to finance executives and then converted into invoices. This created the potential for human mistakes, such as lost objects, misplaced documents, and inaccurate data input. Businesses may save time and resources on manual operations and prevent costly reporting errors by having real-time data stored in the cloud.

Additionally, data confidence and accessibility ease auditing and reporting, significantly lowering this potential resource waste. According to Brusseau, with today's increased awareness of cyber and ransomware threats, firms require more protection for their sensitive data. Businesses that employ ERP systems can rest assured that their data is secure in the cloud, ensuring that data is not destroyed and business continuity is maintained.

Melzer thinks enterprise software is evolving, especially with the use of KPIs and dashboards. Manufacturers have access to more data than ever before, thanks to shop-floor dashboards and executive KPIs. 

Manufacturers are utilising leading metrics to make short- and long-term decisions, "Melzer explains."

A major trend cited by Brusseau is the industry's push for cloud-based security and growth. 

Clients' concerns about security aren't going away anytime soon, says Brusseau. "The cloud secures data and business operations, allowing enterprises to move away from insecure on-premise alternatives. Manufacturers should also confirm and validate a cloud ERP provider's security standing. " 

Brusseau notes that ERP software systems are still in their infancy. While there are some legacy systems, she notes that firms are comparing them to modern alternatives that need fewer IT workers and are easier to support. 

Van den Broeck believes quality standards, compliance, and customer expectations are rising as supply chains and operations become more complicated, difficult, or disrupted.

The challenge is receiving the proper parts from vendors on schedule and with the anticipated quality and functionality. "Analyzing the impact of these delays on your production and delivery objectives demands flawless data and process integration." 

Manufacturers require more trained people as items become increasingly customised and difficult to build. 

Parts and shipping costs are growing due to tight competition. 

It also encourages firms to engage more in preventative and evaluative activities such as training and quality checks in everyday ERP procedures. 

These expenditures help compensate for shrinking workforces and increasingly difficult duties. 

"[They] give proactive assistance, poking probe checks, easy-to-understand instructions, and workflow tools, with real-time validations," Van den Broeck explains. The activities assist in automating tasks and reducing human interference. 

To make educated decisions quicker, more investments are made to guarantee consumers get the correct (precise and real-time) insights into data. 

A new ERP system, like other enterprise-level technology, has a learning curve, explains Melzer. 

He adds that most firms currently operate leaner operations since these sophisticated systems require time to establish and learn. Employees may be overworked, but they must make time to master a new system. But with the support of devoted and skilled ERP consultants, you may avoid some of that heartburn. " 

Brusseau argues that the most difficult aspects of deploying sophisticated technologies are the upfront costs and time involved. 

"While it is an investment, firms must see the ROI in terms of efficiency, business agility, and possible cost savings," Brusseau adds.