What Is Manufacturing ERP Software? Benefits, Features, And Importance

“Manufacturers are scaling their operations with cloud-based manufacturing software. Explore this blog to know what a manufacturing ERP is, and how it can bring unprecedented success to your manufacturing.”

Companies that make innovative products indulge in design, manufacture, market, and sale products to make a difference. This is not possible without iterating and leveraging the power of the latest tech like artificial intelligence (AI) and cloud-based manufacturing ERP software.

Cloud technology, along with AI is transforming the way industries govern and manage their operations. The manufacturing industry is taking a revolutionary leap to simplify and streamline their manufacturing.

From Big Data to IoT (Internet of Things) to Industry 4.0, and from digitizing warehouses to advanced supply chain management, the entire manufacturing industry is shifting to total digital transformation.

Organizations are ready to adopt solutions that will improve efficiency, increase revenue, boost productivity, and enable them to make informed decisions for years to come. Based on business needs, an enterprise resource planning (ERP) system fulfills requirements for a dynamic manufacturing environment (including the needs of discrete manufacturing).

A cloud-based ERP software like Microsoft Dynamics 365 Business Central can integrate different manufacturing processes of a small to medium sized plant into a unified business management platform.

Our objective in this article is to make you aware and discuss:

  • What is an ERP System for Manufacturing?
  • ERP for Manufacturing: Its Benefits, Features, and Importance
  • What are the best ERP systems out there for manufacturing?
  • How can manufacturers get more out of their manufacturing ERP?

What is an ERP System for Manufacturing?

In the simplest terms, manufacturing refers to managing manufacturing processes, from material planning to quality control. Enterprise Resource Planning (ERP) software and integrated solutions from Dynamics 365 Suite help seamlessly streamline and automate manufacturing processes.

Manufacturers across industries utilize ERP software to make the usage of resources efficient and perform better.

The purpose of ERP software in manufacturing is to manage and integrate various operations, such as:

  • Financials
  • Human Resources or Human Capital
  • Supply Chain
  • Inventory
  • Commerce
  • Analytics and Reporting
  • Other Operations

ERP Software for Manufacturing: Its Features, Benefits, and Importance

ERP software help manufacturing companies make informed decisions at every stage. Manufacturers today need solutions and tools that speak only results - speed up growth and enable a data-driven culture.

Thus, manufacturing companies integrate diverse internal processes to get a 360-degree view of their entire business, leading to improved production and sustainable supply chain.

Modern ERP software for manufacturing offer various functionalities to help manufacturers improve their manufacturing, and hence their products.

Core Features and Capabilities of an ERP Solution

1. Finance And Accounting

Developers design and develop cloud-based manufacturing ERP software to manage almost entire operations. Manufacturing companies can easily keep track of every financial activity and documentation using different reports and embedded Business Intelligence tools like Microsoft Power BI.

Moreover, manufacturers can customize an ERP software like Dynamics 365 Finance as business evolves. For example, add/remove features when required.

2. Process Automation

Today, technology is getting advanced with every second and becoming the best way to fight errors, automate daily processes, and lower the burden on employees' shoulders.

Cloud-based ERP manufacturing software come with advanced features and functionalities. These solutions offer manufacturers complete process automation. It makes it feasible to integrate various processes like stock, sales, purchase records, inventory, human resources, and more.

3. Quality Control and Assurance

In manufacturing, quality control (QC) refers to a set of standards and requirements that ensure the success of a product, and hence the business.

While quality assurance (QA) allows thorough examination and testing of the manufactured product.

Thus, to accelerate quality control and assurance, an ERP solution helps manufacturers:

  • Track and monitor different quality management processes
  • Utilize alert mechanisms and other tech at every level of the manufacturing

4. Compliance And Risk Management

There’s no need for risk and compliance if manufacturers already have an ERP software.

ERP systems come with this feature to help you track all the compliance and regulations regarding information security, human capital, environmental, and other regulations (if any).

5. Inventory Management

Inventory is vital for manufacturing companies. Knowing and having overall control over finished products, stocks, products’ status, raw material management, purchase order tracking, and more is crucial to make an impact.

An ERP system for manufacturing includes three core inventory management functionalities:

  • Extensive methods related to inventory management
  • Just-in-time features (JIT)
  • Material Requirements Planning (MRP)

6. Requirement Planning and Management

Manufacturing can be highly complex and may require smart forecasting to meet current and future demands for production. Thus, a data-driven ERP system for manufacturing helps an organization with real-time information for informed decision-making.

Manufacturers can quickly eliminate waste and meet sales needs with a suitable manufacturing ERP software.

7. Distribution And Supply Chain Management

Multi-store brands and retail chains stress various aspects of managing distribution and supply chain, including warehousing, packaging, points of sale, logistics, and vendors.

An ERP system like Dynamics 365 for Supply Chain Management or Dynamics 365 F&SCM can be beneficial to a company’s longevity and growth and helps manage distribution and supply chain processes more intelligently.

8. Asset Management

The best manufacturing ERP software comes with a module for asset management, which deals with the physical assets and equipment a company or factory must manage. In addition to reducing risk and cost, it also increases machine uptime and productivity.

Now that you know the features of an ERP system in manufacturing, let us explore its benefits.

Benefits of an ERP System for Manufacturing Industries

With intelligent ERP software, manufacturers can enhance inventory management, make supply chain sustainable, and increase warehouse management capabilities.

A manufacturing ERP software can provide following benefits to a company:

  • Cost-efficient for automation processes.
  • Increases production efficiency and saves time.
  • Seamlessly integrate the ERP with customer relationships management (CRM) applications like Microsoft Dynamics 365 for Sales, Supply Chain, Marketing, Finance, Field Service, and Customer Service.
  • Real-time reporting and analytics for smart decisions.
  • Optimize manufacturing operations to boost growth opportunities.
  • Enhanced workflow visibility
  • 360-degree view to take control of your entire manufacturing
  • Provide customers with the ultimate experience.
  • Advanced alert management and collaboration features.
  • Compliance and regulatory standards. 
  • Help manufacturing companies avoid risks, reduce redundancy, and mitigate errors.
  • Forecast current and future demands using advanced analytics, cloud computing, and business intelligence tools.
  • Access real-time data to create relevant, faster, and more effective decisions to grow faster.
  • Assist admins improve quality management and streamline operations by helping employees easily learn the use of ERP software and its benefits.
  • Increase productivity, systematically define product life-cycle management, and establish a strong relationship between customers and employees for overall happiness in the organization.
  • Centralize data storage and provide safe access to the data,
  • Reduce overall cost and operational overhead that manufacturers try to put into having multiple business applications.

Read Also: What’s New in Dynamics 365 Business Central 2023?

What types of best ERP Systems are there for Manufacturing?

There are two kinds of ERP software:

  1. Custom ERP
  2. Off-the-shelf ERP

But when it comes to manufacturing, there are several types of ERP systems:

  • Discrete Manufacturing ERP System - For assembling multiple parts to create a product
  • Process Manufacturing ERP systems - For batch process manufacturing
  • Mixed-mode manufacturing ERP system - For combined manufacturing

If you are looking for the best ERP system for your business, there’s no specific answer since it is a matter of – what are your specific business needs that you want to address.

Hence, the best ERP is the one that suits your company’s needs.

For example, are you looking for an option to deploy a cloud-based ERP, or an on-premises ERP infrastructure?

Or, if your operations are on a legacy ERP system, you are thinking of taking them to a cloud-based ERP solution like Microsoft Dynamics 365.

Whatever the case, today different deployment options are available.

But if you are looking for high security, easy access to data, low maintenance, timely update, and no more extra pay for unused functionality in an ERP system, it is recommended to select a cloud-based ERP.

Microsoft is investing billions of dollars to make ERP easy to deploy and operate. This tech giant has acquired various independent ERP and CRM modules (Dynamics GP, Dynamics SL, Dynamics AX, Dynamics CRM, and Dynamics Navision or NAV) over the years, and has transformed them into an advanced suite of business apps – Dynamics 365.

Dynamics 365 is like Office 365 and is hosted in Microsoft’s Azure cloud infrastructure, which includes productivity tools like Outlook, Microsoft Teams, Microsoft Loop, Excel, Word, PowerPoint, Azure IoT apps, and more.

Microsoft Dynamics 365 has 11+ business management modules for your ERP and CRM needs.

For example, Dynamics 365 Business Central (formerly Dynamics NAV), which is a comprehensive (or an all-in-one) ERP solution for businesses with 1 to 300 employees.

However, if your organization is spread across the globe and has complex operations to manage, individual modules like Microsoft Dynamics 365 Finance and Operations (now D365 F and D365 F&SCM) can be an ideal fit.

Note: If you need a hybrid deployment model (cloud + On-premises = leverage the best of both worlds), Microsoft has an option for you. Get in touch with your Dynamics 365 Partner for more details.

The Dynamics 365 ERP and CRM modules offer inter connectivity and allow integration with other apps.

For instance, you can connect apps from Office 365, Power Platform, and different third-party apps available on AppSource.

An ERP system that is offered as software-as-a-service (SaaS) can be a smart choice if you have a vision for your manufacturing company. Cloud ERP solutions are popular among manufacturing giants like Otis Elevator Co., Vanguard, Saia Inc., and more.

The most fascinating property of a cloud solution is that it grows as your business grows. Meaning, a cloud solution offers you the power of scalability, agility, and accessibility compared to on-premises ERP systems.

Plus, you pay for what you use. Nothing extra!

Ultimate Guide to Choose the Right ERP For Your Business

How can Manufacturers get more out of their ERP Software for Manufacturing?

It takes years of hard work and research to come up with a product that impacts people’s lives and takes a teeny-tiny mistake to lose it.

Thus, connecting, tracking, collaborating, automating, and managing manufacturing processes is necessary for a competitive edge in today’s market.

The processes and strategies that are working today may not work tomorrow!  So, to keep up with constant change, it is advised that manufacturers are ever ready and adaptive.

An ERP System for Manufacturing helps Manufacturers:

  • Be agile, innovative, and efficient.
  • Strategically respond to unexpected changes in hassle-free ways
  • Track customer agreements to quickly access details about prices, discounts, delivery dates, product availability, and fulfillment status.
  • Automatically sync and secure their data in the cloud.
  • Do business without silos.
  • Accelerate financial closure.
  • Streamline finance, manufacturing, sales, shipping, project management, services, and more.
  • Provide better service experiences.
  • Built-In analytics to draw meaningful insights from data
  • Easy customization to save a ton of money.
  • Scalability
  • Collaborate effectively, optimize business tasks, and drive growth

Dynamics Square is a leading Microsoft Solutions Partner in the USA, and other parts of the world. We help businesses with stress-free Dynamics 365 Implementation Services, training, and 24*7*365 support.

Contact us for hassle-free cloud solutions and support.

Also Read: How to find a Dynamics 365 Partner for your Business?

Ayush Jain

Ayush Jain is a seasoned Digital Marketing specialist renowned for his expertise in harnessing the power of cloud-based Software as a Service (SaaS) solutions to propel business growth. With an impressive track record spanning more than four years, he has cultivated fruitful partnerships with numerous SaaS enterprises, driving substantial brand recognition and unlocking revenue potential.


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