Operational Excellence is not a destination. It is a continuous journey to achieve excellence in every aspect of business operation. ERP Software is a great mechanism to define and roll out your strategies for Operational excellence. ERP facilitates the optimum utilization of machinery, materials, manpower, money and time to boost the profitability of your manufacturing organization.
How to achieve sustainable profitability is a question that bothers most manufacturing companies. Even more so, in the case of manufacturing companies whose raw material costs and finished goods costs, are market-driven. Such companies only have control over their internal processes. How can they maintain profitability in such situations? The only solution is to achieve Operational Excellence.
Wikipedia describes "Operational Excellence" as follows:
"Operational Excellence is the execution of the business strategy more consistently and reliably than the competition. Operational Excellence is evidenced by results. An Operationally Excellent company will have lower operational risk, lower operating costs, and increased revenues relative to its competitors.
How to leverage ERP to achieve operational excellence?
Manufacturing companies can leverage ERP to define and implement business flow, to describe rules & guidelines as well as implement validations and checklists for almost every activity in the organization. Therefore, ERP is a great mechanism to define and roll-out strategies for operational excellence.
1. Procurement: An ERP Software with an integrated eProcurement solution makes your procurement process fair, transparent, fast & cost-efficient.
2. Optimum Inventory: ERP software helps plan inventory requirements using Material Requirement Planning methods, define reorder points and ensure optimum inventory
3. Real-time Information & Approvals: ERP helps you achieve excellence in processes & approvals by gathering real-time data, providing ERP Mobile apps for access anytime, anywhere, to avoid delays and bring speed in business processes
4. Sound Financial Health - Timely Collection & Payments: ERP helps implement credit control policy and dunning process to ensure timely collections and set alerts for payments due as per agreed payment terms
5. Timely Production: ERP enables Companies to achieve timely production by designing a proper production planning schedule.
6. Minimize Rework & Rejection: ERP sets up stringent quality checks, validations at every stage of the production process and collects data for the root cause of rework & rejection to minimize or eliminate rework & rejection
7. Maximum Uptime, Utilization, Productivity, Minimum breakdown: ERP Plant Maintenance Module helps define scheduled inspections, checks, maintenance. All this helps ensure the peak condition of equipment and machinery and maximum utilization for optimum output.
To read more specific examples of how to achieve operational excellence read our Blog: How to achieve Operational Excellence?
This article is an excerpt from the Blog on the Force Intellect website.
