How an ERP will help manufacturers face the challenge of 2023

Since the start of the pandemic in 2020, the world has convulsed and attempted to mitigate it. Manufacturing used to quietly keep our stores, homes, and businesses well stocked with a wide assortment of goods. In recent years, companies like Amazon set expectations for almost instant home-delivery of anything. Now manufacturers feel the heat of sudden demand swings, and unhappy consumers looking at bare shelves and long waits for backorders.

In 2023, manufacturers will continue to face the challenges of supply chain issues, rising material costs, and labor shortages. However, those prepared with a well-implemented ERP system, like Yfos Cloud ERP will be able to adjust as conditions change rapidly and not only remain profitable but also be able to capitalize on unexpected opportunities.

How to Use Your ERP to Better Manage Inventory and Supply Chain
For inventory costs, you need to know not only the average cost of your materials but what it costs to replace those items.Your actual costs on parts stay the same, but what you use to estimate jobs is based on replacement value.

Stock Levels: Set the safety stock levels, best-estimate lead times, and desired order quantities for all stocked items. Use ​Forecast orders so the system can tell how much material will be needed. Stay on top of what needs to be ordered or made for stock.

Date Fields: Initially, fill out all date fields with your best estimates. Then use ERP’s alternative due date fields for all sales orders, purchase orders, and work orders for the best scheduling and planning predictions.

Inventory Management: It’s critical that you manage all inventory better in 2023. If you are not doing so, use the location features of your system to track the physical location of inventory. Be strict on rules about inventory movements – if the material moves physically, it must move in the system. Review all your inventory transactions for accuracy, including issuing material to jobs and shipping.

ERP systems like Yfos Cloud ERP have a more detailed drive into cost quotes, so the estimates are better, and most importantly, easy to compare to actual costs when the job is finished.

Optimize the Labor of Employees Who Do Come to Work
In 2023, manufacturers will start their days counting who showed up. Stay on top of your local job market and average wages – companies are planning higher wage increases in 2023 than in previous years. When employees come to work, put them on the highest-value tasks for your company.

Use the ERP company’s best training tools for cross-training your employees on how to do the ERP tasks that keep your system real time. Review clocking in and out of jobs, checking labor records for accuracy each day, material issuing procedures, and your shipping process.

Create easy, intuitive work instructions that are a click away in your ERP system. Everyone should quickly pull up precisely what they need to do their job with minimal to no instruction from another employee.

If the employee can work from home, set them up to do it well. Manufacturers have long hesitated to allow non-production employees to work from home. In 2023, forget the old bias and establish policies and procedures for your purchasing manager, engineers, sales, and other non-production staff to work from home. This year might be the time to switch to a cloud-hosted ERP version.

Increase Automation with Industry 4.0 Technology to Combat Labor Shortages
And last but not least, move forward with projects to increase efficiency. You can do more with fewer people; you just need the right technologies. If possible, dedicate one or more engineers to focus exclusively on automating. Think of your ERP system as the hub and the automation projects as the spokes. Almost everything will touch your ERP, so work closely with your ERP software provider to implement changes that are also automated.

YFOS Cloud ERP can help you streamline your operations and create a highly integrated organization. However, you need to carefully plan each step of ERP implementation to increase the chances of success and eventually generate a higher ROI.

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