New Articles
  September 19th, 2022 | Written by

Role of ERP Software in Manufacturing Industry

[shareaholic app="share_buttons" id="13106399"]

ERP software is used to manage daily activities such as procurement, risk management, accounting, supply chain operations, and project management. It is a platform that provides a wide range of business functions such as financial management, human capital management, supply chain management, customer management, inventory and work order management, and so on. ERP software implementation in organizations can reduce inventory costs by 25% – 30% and raw material costs by around 15%. The software facilitates the flow of cross-functional information, improving productivity and decision-making. 

The global ERP software market was worth $50.44 billion in 2021 and is expected to be worth $117.68 billion by 2030, with a CAGR of 9.87% from 2021 to 2030.

An ERP system offers a standalone solution for manufacturing businesses, enabling information access about the company at any time and from a location without burdening internal resources. It has improved managerial abilities to manage product data from various angles.

Importance of ERP in a manufacturing industry

Real-time Information

Manufacturing ERP software automates all business operations and provides accurate, real-time data. ERP boosts efficiency and productivity by guiding users through complex processes, preventing data re-entry, and improving production, order completion, and delivery functions.


ERP software programs are dependable, adaptable, and customizable. They can be customized to meet the particular needs of a business and are not a one-size-fits-all solution. ERP systems can also change to meet the evolving requirements of a developing company.

Reduce cost

ERP software reduces administrative and operational costs by providing a single source of accurate, real-time data. It enables manufacturers to manage operations proactively, preventing disruptions and delays, breaking down information bottlenecks, and assisting users in making faster decisions.

 Key features of manufacturing ERP system

Manufacturing ERP systems provide a wide range of features to improve business functions.

  • Inventory Management

Effective inventory management is critical for manufacturing companies. Inventory management includes tracking inventory, product status, raw material management, purchase order tracking, finished goods, and overall control. Modern manufacturing ERP systems include methods for inventory management, just-in-time delivery, and material requirement planning (MRP), which aid in the efficient management of inventories. 

  • Compliance and risk management

To keep track of different compliance and regulations of business, ERP systems include software to manage risk and compliance. Today’s ERP systems are designed with compliance and regulation features to assist in the management of human resource regulations at every stage and information security.

  • Quality Control

Quality control is a set of standards that ensures that a manufactured product meets the organization’s quality goals. Quality is a critical success factor. The product had to be thoroughly examined and tested as part of quality assurance. ERP software aids in the tracking and monitoring of various quality management processes through alert mechanisms and monitoring at all levels.

  • Process automation

Technology makes it easier to automate everyday tasks, saving man-hours and virtually eliminating the possibility of human error. Complete process automation is provided by manufacturing ERP, which integrates a number of processes, including sales, purchase records, stock, human resources, and others. Automation saves time and allows organizations to access real-time data and exercise greater control.

  • Distribution and supply chain management

Distribution and supply chain management oversees various elements such as packaging, warehousing, logistics, point of sale, vendors, and suppliers for multi-store brands and retail chain businesses. An effective distribution and supply chain management process is crucial for a company to last and grow. 

  • Asset management

Good manufacturing ERP software includes an asset management module that controls physical assets and equipment of the factory. It helps businesses in lowering risk and expenses while boosting uptime and productivity.

  • Finance and Accounting

ERP systems for manufacturing provide complete management of the entire business. The finance and accounting module tracks all financial activity, documentation by integrating various reports and business intelligence tools. It makes it possible for a business to precisely track the procedure and formulate plans.

Future trends in ERP for manufacturing industries

Cloud Migration

Cloud migration is extremely beneficial to mid-sized businesses. Legacy systems and other ERP applications have high infrastructure and maintenance costs. Cloud ERP, on the other hand, can be used with any computer or laptop that has an internet connection. Many employees can use cloud software for a low and reasonable cost because it is subscription-based. This provides small businesses with additional benefits.

Artificial Intelligence

Artificial intelligence is one of the upcoming future ERP trends. Artificial intelligence algorithms are made to think and act like people, analyzing problems and making decisions. In the manufacturing industry, AI-enabled tools integrated with ERP applications help companies save time when analyzing large amounts of data. All of these tasks are handled by AI, which sends notifications via software resulting in a business process that is more streamlined and optimized.

Two Tier Systems

This kind of ERP is primarily utilized by mid-sized businesses as well as businesses with multiple locations. The first tier consists of the legacy system used by management to manage master data. All other subsidiaries use the second tier. The software in the second tier can be altered to meet the needs of various departments. The maintenance of master data is so important that there should be no duplication in the system. Due to a centralized database that completely ensures the correct data is on track, this type of ERP is growing in popularity.

Internet of Things (IoT)

The Internet of Things tracks real-time data about tools and vehicles when integrated via cloud-based ERP systems. To ensure efficiency, the tools and machines should be regularly maintained; by enabling sensor devices on tools that can immediately detect a defect and send a replacement request via ERP applications. ERP’s real-time data assists businesses in improving asset management, forecasting, real-time business insights, and so on.

Enterprise Resource Planning Software can help automate workflows, improve supply chain visibility, and facilitate broad communication. Manufacturing is a rapidly changing industry, and Companies that grasp top ERP systems for manufacturing can hold a significant position in the market.