expert articles | 19.04.2020

ERP system for the production – is it worth to look for other solutions?

ERP systems are presented as comprehensive production management solutions in all its areas. This conviction was also firmly established in the minds of people and companies who use this class of systems on a daily basis. During the implementation, we hope that all our problems will be solved and Excel will finally cease to be needed for work. Practice shows something completely different – despite the satisfaction of the accounting, control and finance departments, in areas related to planning and controlling production, work does not get much easier. All key decisions are still based on spreadsheet analysis. Does it really have to be this way?

Which ERP system should be chosen for production planning?

Central Statistical Office’s data from 2019 show that almost every third company in Poland decided to choose an ERP system. In the marketing message, you can hear that all areas of the enterprise’s activity are supported by various modules of this class systems. However, going into the details of their operation, the user gradually comes to the conclusion that the system support is not complete and a lot of work needs to be done outside of the implemented IT system.
At this point it is worth asking yourself:

  • What functionalities does my ERP system have and does the software support all production management processes?
  • Does the ERP system give me the opportunity to achieve my business goals?
  • To what extent?
  • Does the ERP system make the work ergonomic?
  • Are the notified modifications implemented in conformity with assumptions?
  • To what extent do the systems allow to map all the production processes?
  • How long do I have to wait for feedback after entering new data?

The answers to the above questions clearly indicate that ERP systems in the company are not an ideal solution, although they answer many needs in the process of production and processing of customer orders. There are areas where they work very well and are irreplaceable. But achieving the assumed business goals is a complex process which depends on the correct synchronisation and integration of all areas. It is said that the chain is as strong as its weakest link, which is why the quality of work of individual departments is so important.

Fast and errorless information coming from the areas listed below, is the basis for creating a well-adjusted production plan in many different variants. This also works the other way – the right production schedule allows for effective completion of tasks and achieving all of assumed goals. Against all appearances, integration and achieving the effect of full synergy do not have to be done using one comprehensive system. The current level of technology development allows to easily synchronise data from many expert solutions dedicated to specific applications.

ERP and production planning

Most of ERP systems offer a module that enables production management: scheduling and creating technologies, orders and graphs of the availability of production resources. It allows the user to construct production plans. The system limits its assistance only to estimating the production capacity and, in some solutions available on the market, basic MRP I balancing. All optimisation work in this case is dropped on the planners or managers and masters of production companies. They ultimately decide on the order of tasks, analyse the use of alternative machines and product substitutes, and monitor the current situation in the production hall and correct the previously created plan and analyse the availability of employees and unique tools (e.g. matrices).

These variables are only a fraction of what the planner analyses before distributing the final production schedule. In standard system options, this work is not possible within ERP systems, which is why it becomes necessary to export data to a spreadsheet. In addition, many variables that affect the final plan remain “in the head” or on loose pages (e.g. machine limits, changeover times). In such a reality, any change in an influencing factor forces the user to redo their work and analyse the new situation. In the case of complex processes, it can take up to several hours.

ERP – why companies are looking for other possibilities?

The main determining factor in companies looking for a different IT solution is the inadequate support of the current ERP system in relation to the assumed business goals in particular areas of the process. A changing market is increasingly expecting an immediate response to the variables that affect the production process.

An example of this may be the need to estimate the effects of shifting production orders and the delivery of goods and products to the assumed production plan as soon as possible, delivering the product to the customer or instant response to his inquiry. It may concern, for example, a very urgent order with an attractive margin. Very fast action is required, and hardly any company is able to afford MRP conversions at night. Therefore, exporting all data to Exel documents and manual analysis of factors based on them is the only way out of the situation.

ERP system – what does it NOT allow?

The challenge for companies is also to calculate the technical costs of manufacturing the product with taking into account all alternative machines, raw material substitutes and various employee costs associated with the machine park. Many industries require full traceability of the raw materials used in the production process, and obtaining such information with adequate accuracy in the ERP system is virtually impossible (or too time-consuming comparing with other systems). Regular confirmation of production realisation requires a lot of time and accuracy from the user. And we’re not talking about the option of creating more advanced analyses and operations… An example of a completely neglected area, which has a very large impact on the implementation of business goals, is confronting the assumed plans with the availability of employees and possible working time schedules.

Production processes in the enterprise – functionality counts!

The above-mentioned problems are only a part of those which every employee in the manufacturing industry encounters on a daily basis. Each industry has its own business goals that must be met – also the production industry. However, these examples illustrate the need to search for specialised solutions and can be a starting point for analysing your own production process and saying: “it does NOT have to be like that.”

The IT systems and software market is full of various solutions that promise to improve the quality of enterprise’s operations, but it is worth to note that the system itself is only a tool. Real effects will be obtained only with the appropriate concept of the solution, which will not be limited to one particular aspect, but will cover all its areas. Only such action will ensure the achievement of the objectives.

 

Mateusz Bireta
product manager eq system

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