Automate Manufacturing using ERPNext Software

Monika Banerjee · 04 Jan 2023 · 1553 views

Automate Manufacturing Using ERPNext Software

Smaller manufacturers might not recognize the value of ERP systems right away, but they should not ignore the apparent advantages of specialized ERP software. Despite the difficulties previously brought on by the COVID-19 epidemic, the global industrial market is still expanding.

Because of this, market competition in the industrial sector is becoming increasingly fierce with each passing year. Regardless of its size or USP, manufacturing organizations must deploy ERP software to survive the intense market rivalry.

By 2025, the worldwide manufacturing market is predicted to reach $117.7 billion, according to the BCC Research group. With a compound annual growth rate (CAGR) between 2020 and 2025 of 6.3 percent, it represents a sizable growth.

Accordingly, this is a good time for small-scale enterprises to use custom ERP software to obtain a competitive edge in the unstable market conditions of today.

Although the manufacturing sector has several challenges, selecting an ERP system shouldn't be one of them.

This blog discusses ERPNext and how it might work well for managing your manufacturing business. We start by looking at the many manufacturing techniques frequently employed in this sector.

We'll look at how ERPNext is a complete solution to record most of your company processes while still being a powerful and affordable ERP.

ERPNext: What Is It?

ERPNext is a full-featured business process management technology that enables companies to create unique software applications for their business requirements.

It is an open-source software platform that provides several modules to assist various business operations, including supply chain management, payroll, accounting, inventory/warehouse management, and customer relationship management.

A manufacturing-specific module in ERPNext is also available and is most appropriate for small- and medium-sized firms.

With capabilities like subcontracting, bill of materials (BOM), shop floor management, and material resource planning, the manufacturing module from ERPNext gives you total control over the production cycle. We will go through these features in greater detail in the section after this.

Why Use ERP For Manufacturing?

Manufacturers add value to their products for a good reason—manufacturing is highly specialized. They accomplish this by converting raw materials into finished products using several processes.

This calls for sophisticated systems that track every step of processing the aforementioned essential ingredients, transporting the finished product, and so forth.

Any error here will probably trickle down and leak into other areas of the firm because it is the foundation of the enterprise. This level of complexity calls for an accompanying module that gives you a 360-degree perspective and control over each operation.

Additionally, because it significantly impacts the ERP requirements, it's critical to consider the kind of manufacturing operation a company employs.

1. Discrete

Producing distinctive, unique things is done through discrete manufacturing. These objects can be produced at various manufacturing rates employing parts, bills of materials, etc.

• Make-to-Order: Once a buyer orders a product, it is only then manufactured. For instance, birthday cakes and business cards can be customized.

• Make-to-Stock: Products produced in bulk based on projections of future demand. This category typically includes consumer goods that are mass-produced and move quickly. Packaged food and beverages and consumer devices like phones and air conditioners are always created to order.

• Engineer-to-Order: A particular manufacturing procedure wherein a product is created according to the customer's order specifications after being developed, engineered, and produced. An essential component of this process is project management. Engineering-to-order is typically used for specialized equipment, furniture, apparel, and other items. The Project Management module generally is also needed for this.

2. Repetitive

With a few exceptions, this category often has specialized production lines that consistently produce the same thing.

3. Process

Commonly employed in the production of chemicals, pharmaceuticals, and beverages. It needs supplies, ingredients, and recipes that call for bulk goods (as opposed to singular parts, components, etc.). Several ongoing procedures result in the finished product.

• Continuous: The production lines are constantly in operation, much like repeated manufacturing.

• Batch: The manufacturing process is batch-based rather than constant production.

Discrete manufacturing has traditionally benefited from ERP. Supply chain management, financing, inventory and materials management, and CRM are typical tasks.

Key Features of Manufacturing in ERPNext

You can access all the functionality you need with ERPNext to run a productive production line. Multiple features are included in a robust ERP solution like ERPNext to handle your sales, inventories, personnel, accounts, projects, and more. All of the aforementioned scenarios are manageable with ERPNext. ERPNext includes all regular and typical manufacturing characteristics, including:

1. Bill of materials (BOM)
2. Production Plans
3. Work Orders
4. BOM Comparison and replacement
5. Operations
6. Workstations
7. Routings for Work Order automation
8. Reports
9. Job cards
10. Capacity Planning
11. Scrap Management

An overview of ERPNext features:-

• Operations and Multi-Level Bills Of Material (BOM).

• Monitor serialized numbers and batches in the inventory.

• Keep track of the production planning status.

• Daily actions will be recorded in workstations by Shop Floor Management using job cards.

• Track and send Work Orders to various workstations and warehouses.

• Product availability in real-time, with material resource planning (MRP) modifications.

• Features for stock replenishment, units of measurement, and more.

• For each work order, schedule time and resources.

• Using sales orders and internal requirements, production planning.

• Record the results of every material's quality inspection that is performed.

• Develop and control production Items and Variants.

How Is ERPNext Helping B2E Scale Up?

Ben began his professional career many years ago and has worked on complex and simple tasks. His data is spread out across multiple pages because he has experience with Quickbooks, spreadsheets, and CRM.

He had trouble switching between programs because the information was dispersed. He describes the company's business strategy as "engineer to order," which means that every client gets a unique solution. They never sell the same thing twice since there are no two things that are exactly alike and have their scope.

They are currently concentrating their attention primarily on projects. They use it to track labor and inventory, which improves the effectiveness of B2E. All purchase orders, timesheets, and invoices are tracked in one location using the project in ERPNext.

Additionally, they want to produce more, which will need a considerable expansion of the manufacturing module. Currently in use are accounting, project management, the backend module of the website, manufacturing, and CRM.

Since ERPNext and its website are fully integrated, the system generates an excellent opportunity if a user contacts them or seeks more information. They find that automating their job is much simpler with ERPNext, making it possible for their small team to complete challenging tasks.

7 Benefits Of ERPNext For the Manufacturing Industry

Local, small- and medium-sized enterprises, as well as huge, enterprise-sized companies, employ ERP (Enterprise Resource Planning) software.

Almost all businesses, regardless of complexity or size, can benefit from ERP software that meets their demands. Manufacturing organizations play a significant role in an ERP compared to other types of firms. Let's now look at how an ERP helps the manufacturing industry.

1. Automates and Streamlines Business Processes To Make Them More Adaptable

For industrial firms, a complete ERP solution fosters automation and optimizes business operations.

All data, including development, designing, inventory, procurement, production, finance, sales, delivery, and more, is accessible from a single location and fully visible across all functionalities. Any staff member can view the production status in real-time without relying on a specific person or group.

For example, the design team can track how production is going and inform the purchasing and finance teams when more raw materials are needed.

This increases productivity, improves system efficiency, and enables businesses to uphold their contractual obligations to customers. The company decreases its reliance on manual operations by automating the processes with ERP for the manufacturing industry. This not only quickens the production process but also reduces errors and greatly boosts profitability.

2. Respond To Market Conditions Quicker

Real-time data analysis provided by ERP for the industrial sector aids organizations in making better estimates, plans, adjustments, and responses to shifting market demands.

Decision-makers frequently consult system-generated data to comprehend market demands and take advantage of client purchasing trends.

Managers are given a 360-degree perspective by detailed insights, which helps them minimize forecasting errors and, if present, take advantage of new opportunities.

3. Strategic Decision Making

A complete ERP solution for manufacturing improves an organization's capacity for decision-making. It offers thorough perceptions and visibility into each division and business procedure, assisting the organization in making quick, accurate, and knowledgeable business decisions.

Manufacturing businesses can better stay on track with their objectives and make the appropriate internal decisions when they have access to critical performance metrics like overall sales, sales margin, etc.

With ERP for the manufacturing sector, all internal departments and procedures are apparent, which aids management in streamlining daily operations.

4. Enhance Customer Satisfaction

Manufacturers may improve the on-time delivery of products, a crucial performance indicator, through accurate production planning, improved inventory control, simplified process scheduling, and coordination of distribution routes.

To preserve client satisfaction, deliveries must be made on schedule. Manufacturing ERP solutions provide real-time data, so decision-makers can always have a realistic understanding of inventory levels.

5. Enhances Communication

Manufacturing ERP software acts as a conduit for manufacturers to share information about the production with internal staff, the general public, and any associated vendors, suppliers, and distributors.

Within the industrial sector, teamwork and communication can be aided by an ERP. An ERP for manufacturing offers accurate data and comprehensive analysis when it comes to processes, including inventories, the supply chain, and the external market. Systems communicate real-time demand information to one another, accelerating the fulfillment processes.

6. Simplify Accounting

Utilizing integrated ERP software, manufacturing businesses may combine all of their financial information into a single database, streamlining and streamlining the work of their accounting team.

In contrast to the preceding scenario, the user shouldn't have to spend any time manually reconciling data or cross-posting the data. ERP helps the accounting department to evolve into a genuinely strategic part of the organization by increasing productivity, enhancing accuracy, and offering new perspectives on every aspect of your business.

7. Improved Production Management

Having an ERP for manufacturing helps with the production schedule. The primary objective of production planning is to fulfill customer orders on schedule.

The items the company plans to produce in specific configurations, quantities, and dates are displayed on a master production schedule (MPS), a component of an ERP.

The forecast and purchase orders are supported by it. After charting the number of orders and requirements, we can use material requirement planning (MRP) to carry out such sales orders.

MRP, which incorporates the bill of materials data, inventory data, and the MPS to determine the necessary materials and generate purchase and shop orders, keeps a clear workflow within the manufacturing department.

Also Read: How To Set A Workflow In ERPNext

An ERP system provides data delivery and intelligent insights as a result. The reporting, KPIs, and forecasting tools make the production process reliable and valid for decision-making.

Choose Kanak Infosystems To Avail of 360-degree ERPNext Software Development Services.

To address business issues unique to a particular industry, Kanak Infosystems offers comprehensive ERPNext application development services. With the help of ERPNext, our seasoned developers can create special software modules to address various business difficulties.

Additionally, we have experience utilizing additional open-source ERP platforms, including Opentaps, Apache OFBiz, and Odoo. Along with business process management technologies like jBPM, OptaPlanner, and other Apache software products, our ERP application development toolkit also contains these. Contact us for more information about our custom ERP development services.

Conclusion

A manufacturing company's operations get trickier and more expensive as it expands, and overhead costs go up. The creation of ERPNext software ensures that you always have control over your resources while optimizing operations across all production divisions.

To boost corporate productivity, the ERPNext software solutions automatically scale to meet changing business needs. In addition, it considerably lowers overhead costs by allowing automation at various stages of the production cycle.

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Frequently Asked Questions

How is ERP used in manufacturing?

The manufacturing enterprise resource planning (ERP) system is a centralized way to manage all aspects of facility operations and activities, from production to payroll. Greater operational efficiency results from ERP's ability to provide previously unheard-of levels of visibility, coordination, and management across the many business processes.

Why do we need ERP in manufacturing?

Reducing duplication and automating procedures to improve efficiency. Increasing productivity through the optimization of production processes. Improving inventory management, warehouse operations, and transportation. Reducing risk and boosting trust in compliance.

Does ERP include manufacturing?

An ERP system, at its most basic, integrates critical business operations, including purchasing, manufacturing, supply chain management, finance, customer relationship management, sales, and human resources, into a single, integrated system.