Complex manufacturers using ERP to combat challenges

That's among major findings in a newly released study by analyst Aberdeen Group, which also suggests that the shift to going for growth, not just survival, is forcing complex manufacturing companies to rethink their manufacturing IT infrastructures. "Complex manufacturers are not called complex just because they produce complex products," explains Kevin Prouty, research director at Aberdeen Group. "They also have very complex operations when compared to other manufacturers." For him, that means, for example, that their operations are typically multi-mode – and that can cause problems when they select, implement and upgrade ERP systems. "They typically have a significant component of project-based manufacturing and either need to select an ERP system that supports that type of manufacturing, or customise an ERP system, or support the project-based processes through manual operations," says Prouty. "Visibility in processes and standardisation of processes is critical to efficient operations." That said, Aberdeen's research appears to demonstrate that where firms get their ERP implementation right, they slash operating costs by 20%, administrative costs by 18% and inventory by 22%. They also improve OTIF shipments by 24% and internal schedule compliance by 20%. As Prouty points out: "These improvements can result in tens of thousands, or even millions of dollars in savings."