Manufacturers are operating in a highly competitive business world marked by constant changes in consumer demand as well as competitive and regulatory environments. Customers are demanding better services and products at lower prices and changing the way they consume them. New and non-traditional competitors are entering the marketplace, shifting the competitive landscape and challenging the status quo. In addition, manufacturers must also deal with changing governmental regulations such as increased tariffs and new financial reporting requirements.
In order to survive and thrive in this rapidly changing business environment, manufacturers must be able to exhibit operational flexibility across their enterprise-wide business processes. Since manufacturers rely on Enterprise Resource Planning (ERP) solutions to effectively manage their operational processes, a flexible ERP is an essential requirement to meet these ongoing changes.
What is “Flexible ERP”?
A flexible ERP system is a modern Enterprise Resource Management (ERP) system that enables an organization to adapt, change, and grow in a scalable way over time. This ability to grow allows flexible ERP to function as a modern, next-generation ERP system that can provide a competitive advantage in manufacturing businesses.
Flexible ERP and Adaptive Manufacturing
Typically, traditional ERP solutions are based on specific functional requirements that reflect the existing business environment at the time of implementation. But, as the marketplace and business environment changes, so do the processes a manufacturer relies upon to meet those changes. Without a flexible ERP the advantages that an ERP solution provides, in terms of optimizing a manufacturer’s operational effectiveness, will be lost.
Typically, ERPs tend to fail to keep up with the market along a well-worn cycle that starts with a shift in the business environment requiring changes in a manufacturers’ operational processes. Traditional ERP is not flexible enough to adapt to the process change, so in order to meet the new requirements, internal organizational functions will develop a series of manual processes or workarounds. These often utilize other technologies such as spreadsheets or third party solutions.
As the marketplace continues to change, the gap between the processes implemented in the traditional ERP solution and the changing needs of a manufacturer grows. Over time, the ERP can no longer provide a single version of the truth, leading to an erosion of trust in the system. Rather than trusting the ERP, departments will develop new workarounds or manual processes to meet these changing business demands. This dynamic reduces a manufacturers’ ability to effectively respond to increased changes in the business environment, resulting in poor operational performance and putting these companies at a competitive disadvantage.
Flexibility is Key to Survival
Here’s where a flexible manufacturing ERP comes into play. A flexible ERP software allows manufacturers to respond to ongoing changes in their business and regulatory environment. Manufacturers no longer need to worry about the ability of their information systems to put process changes into practice. A cloud-based, flexible ERP allows a company to easily change and extend business process across the enterprise. A flexible ERP also significantly reduces and eliminates the need for ungainly manual processes and workarounds to meet business change.
In today’s highly competitive marketplace change is the only constant and it is accelerating. Meeting the needs of the current business environment is not sufficient when considering an ERP solution. In order to thrive in today’s and tomorrow’s market, manufacturers need a flexible ERP vendor that supports the ability to rapidly respond to change.
Would you consider your ERP solution to be flexible enough to adapt to a world of constant changes? Tell us more about the successes or challenges you face in the comments below.