Why Every Manufacturer Needs a Cloud ERP System?

July 10, 2023

As a manufacturer, are you losing track of all the spreadsheets that store your data? Are you struggling to make informed decisions because of scattered data? Are you juggling multiple applications and struggling to get your apps to communicate with each other?

Don’t worry! We understand your pain points, and you are not alone in this. Data is the backbone of your business, however, data can only create value when it is transformed into digital intelligence to make informed decisions, resulting in increased revenue. If you are storing data in entry-level software or a spreadsheet that is built to hold only so much information while your business operations are continuously growing, you need to switch to a more robust and scalable solution such as an Enterprise Resource Planning (ERP) solution.

“Manufacturing companies are the No. 1 user of ERP software and Manufacturers represent the largest portion at 47% of companies looking to purchase ERP software

ERP was introduced in the 1990s as software that assists businesses in storing large amounts of data and information across multiple functions and automating business processes – such as Manufacturing, Accounting, Sales, Human Resources, Marketing, etc. Back then, ERP was deployed on the client’s server in offline mode.

However, the 2000s witnessed a major disruption in the ERP market with the introduction of Cloud ERP – ERP software that is hosted on a provider’s cloud platform and is accessible over the internet. Cloud ERP is delivered as a service (Software-as-a-Service or SaaS) on a monthly or yearly subscription basis. The customers do not own the software but instead, lease it.

In this blog, we will discuss why every manufacturer needs an ERP.

Why do manufacturers need an ERP?

Optimization of Inventory Management and Supply Chain Operations
Cloud ERP enables businesses to optimize their inventory management and supply chain operations. Cloud ERP uses various tools to keep track of inventory levels at different warehouses, further optimizing the pick, pack, and ship process. With the greater precision provided by Cloud ERP, warehouse managers can get real-time data on their inventory to make more accurate and informed business decisions. Through the integration of essential supply chain management capabilities – from demand forecasting and procurement to manufacturing and distribution, Cloud ERP systems enable businesses to meet customer demand while minimizing costs. Using Cloud ERP modules for supply chain management gives businesses an organized visualization of their business data and reduces application integration complications.

Data Security and Disaster Recovery
Cloud ERP is well known for its security and disaster recovery features as well. Cloud providers make sure that their security infrastructure is strong by investing heavily in features like encryption, firewalls, and frequent data backups using cloud storage. This safeguards the critical business information of companies against unauthorized access, cyberattacks, and natural disasters. Moreover, if there is any loss of data or even a system failure, cloud ERP enables quick and rapid retrieval of the lost information to reduce downtime and system blackouts, thereby preventing significant disruptions to business processes and operations.

Scalable Pricing Model
The pricing structure of Cloud ERP is designed to cater to the needs of expanding businesses. Its subscription-based approach enables companies to begin with a smaller number of users and subsequently increase their user base as per their requirements. The system also offers the flexibility to add or remove users, modify storage capacities, or upgrade service tiers in line with business growth. This adaptability ensures that companies pay for only what they require, making it an economical alternative for growing organizations.

Business Process Automation
Having an ERP Solution for your Manufacturing Business can help streamline multiple functions such as Warehouse Management, Inventory Management, Contact Management, Accounting, Order Entry, Processing, etc. and ensure a clear communication and collaboration process among different teams, departments, and locations. According to a report by HubSpot, ERP implementation led to business process improvement for 95% of businesses.

ERP can help your business in the following ways:

  • Managing the inventory that comes in and goes out of your warehouse with barcode scanners
  • Converting a quote into a sales order without having to toggle between multiple systems
  • Creating a purchase order for the inventory not available from within the sales order screen
  • Auto-generating and sending customer invoices
  • Auto-generating reports for the pre-defined metrics such as Amount of Inventory, Sales Orders, Purchase Orders, etc, and sending these reports to relevant stakeholders within each department
  • Creating a sales order where the inventory is automatically allocated to that particular order
  • Using verification scanning at multiple warehouses or packing stations to scan the items picked or packed and to check against the sales order
  • Tracking and monitoring the receivables with the ability to have automated updates sent out to shorten the receivable cycle and increase the cash flow
  • Viewing notes added on customers and suppliers from multiple screens and areas of the software
  • Reviewing the sales orders from various sales channels in one screen

Easy Reporting And Forecasting
An imbalance between Supply and Demand is the last thing that you would want as a Manufacturer. Implementing an ERP system in your business operations can help you avoid such scenarios by giving you clear visibility of the data through auto-generated reports. These reports can help you analyze the data and compare it with historic trends to facilitate an informed decision-making process. In addition to avoiding the clutter of excess inventory or an out-of-stock situation, these reports can help you make economic decisions without error.

ERP delivers several forecasting capabilities, such as:

  • Demand Forecasting: ERP can help you identify the busiest seasons of the year and the hottest-selling items. You may create demand projections based on customers, goods, regions, and seasons using ERP. Knowing what’s coming up enables your managers to make smart, cost-effective decisions around labor management, scheduling, and procurement.
  • Supply Forecasting: Meeting consumer requests requires carefully planning the operations of manufacturing, distribution, and purchase. Build stronger ties with suppliers and control inventories better with ERP. Knowing the lead times of your suppliers and planning for backup might be the difference between delivering on schedule and experiencing production halts and backorders.
  • Financial Forecasting: Keep an eye on the expenditure and income trends. Watch for shifting expenses that may influence profit margins, estimate capital requirements or product requests, and monitor expenditure reports and budgets in real-time. Managers may monitor operational or customer-specific expenditures in real-time with real-time data and respond more quickly to variances.

Rapid Implementation and Deployment
Gone are the days when companies were dependent on traditional ERP systems, which took days and weeks to integrate into the system. Cloud ERP systems have proven to be more efficient and user-friendly in every way possible. As the infrastructure and the software are already well developed and established, it drastically reduces the time and effort required for configuring and installing the system. Due to this rapid installation, businesses can rapidly implement the system, allowing them to start reaping the benefits as early as possible. In addition to this quick installation, there are automatic software updates that make cloud ERP even more reliable for companies that have to access the latest features and security enhancements without manual intervention.

Integration Capabilities
As companies expand, they frequently require several systems and applications to oversee different facets of their operations. Cloud ERP provides effortless integration features that enable businesses to link their ERP system with other critical software and tools such as Customer Relationship Management (CRM) software, e-commerce platforms, financial systems, and others. The integration process eliminates data silos, enhances data precision, and offers a comprehensive perspective of business activities. Some of the biggest requirements fall in the categories of accounting, financial analysis, human resource management, client relations, manufacturing, supply chain management, and inventory management.

Here is an ERP success story to understand some companies’ biggest challenges and goals in this area: Western Digital is a technology company with data services, data storage, data systems, and data solutions. The merger of Western Digital, SanDisk, and HGST was a great challenge for the company. With the merger, Western Digital wanted to centralize ERP so the three companies could work together better. After final consideration, the company chose to go with ERP Cloud. This choice has also resulted in an ERP product suite that includes performance management and analytics solutions, all integrated.

Continuous System Updates and Support
The pricing structure of Cloud ERP is designed to cater to the needs of expanding businesses. Its subscription-based approach enables companies to begin with a smaller number of users and subsequently increase their user base as per their requirements. The system also offers the flexibility to add or remove users, modify storage capacities, or upgrade service tiers in line with business growth. This adaptability ensures that companies pay for only what they require, making it an economical alternative for growing organizations.

The advantages of Cloud ERP outweigh the initial cost, time, and effort associated with its implementation if the right solution is chosen. All manufacturing businesses might want to think about implementing a Cloud ERP system to help enhance their business operations. For growing businesses, Cloud ERP enhances scalability, flexibility, and rapid implementation, and offers a scalable pricing model. They can streamline their operations, optimize resource allocation, improve communication, and remain agile in today’s competitive landscape.

iQuasar can help you focus on your growth strategies, promote innovation, and achieve company objectives with the benefits of Cloud ERP. We can help you with customized business process automation with enhanced data and cloud security.


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