Manufacturers need to be aware of five key trends in ERP systems for 2017. By Staci Davidson
The North American manufacturing industry is so dynamic, it’s not always easy to keep track of all that is happening. The industry has been strong since the Great Recession, but it still faces major challenges, such as lack of skilled workers and ongoing pressure to do more with less.
But focusing on one aspect of the industry can help to see things more clearly, and that is what we have done. Working with Top10ERP.org, a leading online ERP software index for manufacturers, Manufacturing Today spoke with three experts in the ERP sector to determine the top trends in ERP for 2017. No surprise, there is a lot for manufacturers to juggle.
“The uncertainty of U.S. politics could dramatically change the market for anybody producing overseas,” SYSPRO USA President Joey Benadretti explains. “The market is changing as a result of increased costs, fluctuations in the supply chain and unstable suppliers. Consumption patterns are changing around the country as populations move. Brexit and the European Union and the Transatlantic Agreement and all have the capacity to influence change in terms of international trade.
“Renegotiations of NAFTA could significantly affect the United States with trading partners,” Benadretti continues. “Increase in locally driven manufacturing in the market could have a big boost for the industry. It’s really the unpredictability of the market. Increased competition, increased competitors both local and foreign. Changing costs of energy can dramatically affect the marketplace, as well.”
With all of this in mind, consider the five ERP trends our experts have noted for 2017.
1. Consolidation will continue to be a major influence on manufacturing.
Not only do shorter supply chains and less-complicated systems help manufacturers with cost reduction and on-time delivery, but they also allow companies to be much more agile in their response to customers and the market.
“It has gotten too expensive, too time-consuming, too error-prone and too cumbersome to manage a company using a bunch of disparate point solutions and databases,” says David Morfas, Director of Marketing Communication at Plex Systems. “Companies running old software systems have to pull data from multiple places and try to tie it all together quickly to be able to act on it. Manufacturing is more data-driven than ever and companies need to make the process of gathering and using that data easier.
“Additionally, having multiplepoint solutions to manage individual functions of the business is difficult to manage, difficult to keep updated and difficult to scale. Having tighter, better-integrated systems that offer more capabilities allow companies to consolidate systems and better connect their enterprise. In the case of manufacturing that means connecting users to data, connecting machines to machines, connecting plant(s) data to a single source of truth, and connecting reporting capabilities so people can see real-time how production and the enterprise are performing.”
2. The cloud will play an important role as manufacturers adopt new technology.
Morfas explains every major ERP vendor is marketing a cloud system, especially as more manufacturers realize this is the new normal for software in their enterprise and they realize the benefits of the cloud over legacy systems.
“Industry 4.0 calls for a future of agile, affordable manufacturing, fueled by technology enablers such as the IoT, 3-D printing, cloud computing, mobile devices and big data,” says Christine Hansen, Product Marketing Senior Manager of Epicor Software. “These technology enablers will change how products are designed, produced as well as impact how data is gathered, stored and analyzed. Taken together, these technologies will have a profound impact that can change manufacturing in unprecedented ways.”
Additionally, Morfas notes, ERP software needs to be more cloud-oriented. “Being [on the] cloud enables manufacturers to have greater flexibility in using the software, to be better at centralizing data into one database available to all users, offers better mobility options – both in mobile device access but also in how users can access the data, like using wearables and mobile scanners – and makes reporting quick and easy. ERP software has to make what is a more complicated environment simpler to manage, while also driving connected manufacturing – connecting everything and everyone in manufacturing so there are no more silos.
3. Increased connectivity is key for manufacturing competitiveness.
Morfas cite the need to eliminate silos because connectivity is important for manufacturers to remain competitive in the global marketplace. Enhanced connectivity and communication can help companies better react to market changes.
“[There is] growth/need for connectedness and collaboration,” Morfas says. “This applies within each company, but more importantly manufacturers should better connect their supply chain and their own customers to the manufacturing process for better efficiency and collaboration. [This] leads to better demand predictability but also better inventory control and better ability to meet customer needs.”
Hansen explains that “global megatrends” and the increased emergence of new and disruptive technologies are directly impacting manufacturers and causing new demands on ERP systems. “More and more devises will be interconnected with each other and connected with products that will be embedded with sensors, and potentially connected in global networks directly to customers or suppliers. This network of interconnected devices will form the basis for a new manufacturing revolution called Industry 4.0, which will radically transform the face of manufacturing and the types of solutions that will be leveraged.”
4. Manufacturers need to be ready for an even larger volume of data to consider.
With all that connectivity, there will be more data for manufacturers to manage, and companies must find a way to do that effectively.
“With the advent of IoT, the applications businesses use will reach every corner of the business and beyond,” Hansen says. “The tremendous volume of data that will be generated, as well as insights from said volume of data, will be more dynamic and more instant. Everyone’s expectations of technology and responsiveness will rise accordingly, setting new standards for communication and collaboration.
“As more digitally controlled technologies such as IoT and additive manufacturing are introduced, the number of connections drastically increases,” she continues. “And with the growth of data, manufacturers need new and faster ways to drive insight and actions and easier ways to support decisions.”
Benadretti notes that greater integration across all aspects of ERP software is necessary. “It is all about operational functionality, visibility, cost control and performance measuring,” he says. “More attention [should go] to the cloud-based solutions and greater flexibility in terms of on-premise, cloud and mobile capabilities. This should include IoT, machine learning, artificial intelligence capabilities and integrations ringing in data from disparate systems and having the capability to make operational and management decisions based on that data. he ability to turn data into actionable information. It is more about the mobile worker today to really incorporate their needs and ability to be mobile and flexible.”
Morfas adds that more data is available in real-time, which can be a benefit and a challenge. “Making use of that data and/or automating processes is a challenge, and manufacturers are trying to figure out how to do that. If it’s more IT people, much of their current IT budget is tied up managing software today and can’t be dedicated to the task of data analysis,” he says. “To the earlier point of cloud, Plex sees customers moving people who used to manage software but no longer have to because of cloud ERP now managing new value-added projects, data analytics and addressing areas they previously did not have the headcount to address.”
5. End-to-end ERP systems are increasingly important.
As manufacturers deal with ongoing market changes and uncertainty, as well as a continuous increase in data, strong ERP systems are even more important.
“Manufacturers must address the challenges in managing an increasingly overwhelming volume of data that operators need to convert into actionable intelligence,” Hansen says. “It is important to note that IoT data will be gathered and dissimilated by a stream processing application. A manufacturer’s ERP system must have the ability to integrate with the stream-processing application to allow for specific, filtered data to be passed to the system, allowing the ERP platform to make better decisions.
“Today’s next-generation ERP solutions leverage new technologies to bring information to those who need it, at the moment they need it, in a form that they can use and in a way that they can action immediately, anywhere,” she adds. “The value comes from increasing the reach of ERP, to every part of an organization making it as usable on the shop floor as it is on the top floor.”
Strong ERP systems are key, Benadretti says, because technology is more important throughout every aspect of manufacturing operations. “Manufacturers are becoming more conscious about their internal systems and technology is beginning to play a much larger part from sourcing of raw materials and components all the way through to the manufacture of finished goods and the servicing thereafter,” he explains. “There’s more consciousness on the sourcing of materials in the United States and companies are looking to manufacture closer to the point of consumption to reduce cost and customer service. [They are] shortening supply chains for cost reduction and on-time delivery.”
What else will impact manufacturing in 2017? Be sure to check back, as we will continue to cover the developments of the industry.
Top10ERP.org indexes and compares the highest-rated manufacturing ERP software solutions from the top-rated vendors in the United States and Canada. Top10ERP.org simplifies the software evaluation and selection process for small, mid-sized and large manufacturing enterprises.