The careful management of raw materials is essential for manufacturers. Imprecision can easily result in overages that take up valuable storage space, shortages that can slow down or interrupt production, and a lack of data that will make it harder to predict how much a project will cost.
The effective monitoring of raw materials usage can help any manufacturer improve material usage predictions and management strategies. In most cases, businesses don’t need a specialized solution to track things effectively.
Enterprise resource planning (ERP) tools are often among the best available options for monitoring raw materials usage and coordinating more specialized systems with the rest of a business’s planning platforms. Implemented correctly, ERPs can help any manufacturer manage the flow of items needed to create quality products.
Using an ERP to Monitor and Manage Raw Materials Usage
ERP tools help businesses coordinate and integrate processes across business verticals. Specialized submodules streamline the management of specific tasks or business areas. They’re typically used by organizations that can benefit from company-wide process standardization, instant access to data, and the automation of documentation and reporting.
Modern ERP platforms are typically cloud-based. As a result, this information is available from anywhere, as long as all relevant parties have access to it.
ERP tools are commonly used to streamline the handling of orders, invoicing, HR, finances, and customer relationship management. Many platforms also include submodules that allow them to manage raw materials usage and integrate management processes.
The Benefits of ERP Software for Raw Materials Management
ERP software can provide a few significant advantages for manufacturers. The most notable is the improved accessibility and transparency of storage data. Many ERP tools provide dashboards that make it possible to quickly view key metrics related to materials storage and use. Critical data points like inventory volume, value, and storage location can easily be tracked in real-time with these tools.
This information can help managers quickly understand the current state of manufacturing processes and relevant trends. This includes how usage of raw materials has changed over time, potential risk areas, and the current utilization of the business’s raw materials storage. If stored on the cloud, this information can be viewed from anywhere. Therefore, anyone with the proper network access can view it when necessary.
The ERP can track all raw materials and components used in the manufacturing system, helping the business correlate raw materials and their characteristics with manufacturing processes. For example, defects in a certain batch of raw materials can be traced directly to finished products, allowing for more effective and targeted recalls or quality assurance practices.
The potential for the standardization of materials handling practices can also be a major asset. If a business manages several different production sites, the management submodule of an ERP can ensure the procedures for handling and documenting materials are consistent across these sites.
This can make ERPs especially valuable for food and beverage manufacturers, which often need to carefully manage best practices for handling raw materials, like foods that pose cross-contamination risks. Implementing these processes can greatly cut down on waste.
Streamlining Manufacturing with an ERP and Raw Materials Management
The same information could be used to quickly identify excessive raw materials usage that may point to inefficiencies. ERPs with material management submodules can be essential during an audit for these reasons. With the right technology, managers can speed the process of investigating the manufacturing process for stages where materials may be wasted.
An ERP's information and analysis can also be shared with other systems, like warehouse management platforms, manufacturing execution solutions, and sales tools. Integrating systems like this can make data on raw materials production processes extremely valuable. It allows the business to combine sources of information, enabling the discovery of new insights.
For example, the use of an ERP can help the business more accurately gauge how much stock it will need for a particular period. Combined with historical sales data from a CRM or other sales management tool, the manufacturer will have a better chance of accurately predicting the amount of raw materials necessary to meet customer demand over a certain timeframe. These predictions will help avoid costly overstocking, as well as resource shortages due to understocking.
Best Practices for Implementing an ERP for Resource Management
ERPs are sometimes called “back-office” solutions because they unite corporate processes and can also be used to integrate other verticals into management workflows. As part of the ongoing digital transformation of manufacturing, businesses are finding new ways to apply ERPs to improve materials management.
For example, a supplier of pet products used its ERP to develop a mobile app that its warehouse associates used to accelerate picking, packaging, and shipping processes. The app guides associates as they pick new orders, requires scans for verifications throughout the process, and prints labels for items once they’re ready for packing and shipping. It also helps streamline receiving and raw materials inventory. It integrates directly with the ERP system, enabling the efficient transfer of data between the app and business management platforms.
The app’s implementation came alongside other productivity-boosting changes made to the company’s warehouse management strategy, including the installation of a power conveyor and wireless barcode printers. Implementing ERPs for material management typically works best for businesses that have already identified inefficiencies or areas needing improvement. An audit that can pinpoint inefficient warehouse practices, resource waste, or poor inter-departmental communication can help management plan a solution like a warehouse app.
How ERP Solutions Can Streamline Material Monitoring
With the right materials management strategy, manufacturers can reduce waste and improve materials handling practices. An ERP can be a valuable asset, especially when used as the foundation for other solutions. Businesses wanting to take full advantage of an ERP should begin with reviewing current materials handling practices and investigating potential inefficiencies. The ERP can be used to manage these inefficiencies with submodules, apps, and other technology that can improve data access and streamline processes. This translates to a more efficient operation and increased profits.