If you ask most employees whether or why the ERP management system is good, the answer is often some general concepts, such as ” improves work efficiency,” “modern operation and management model,” “cost savings,” “growth market share” and so on. But when it comes to what ERP can solve, and what problems companies are most eager to solve through ERP, most of them can’t answer you head-on. Considering this, we have listed below some specific benefits – 100 Benefits of ERP System to explain how ERP can solve most of the problems in an organisation.
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100 Benefits of ERP System
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Before we go to the benefits, let us understand what ERP is?
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Enterprise Resource Planning – ERP is a system for enterprise process management, it was first defined as application software by Gartner Group Inc in 1990 and has become one of the modern theories of enterprise management.
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Enterprise Resource Planning refers to the management platform based on information technology by systematic management thinking, providing decision-making and operation means for organisations decision-making level and employees. Enterprise resource planning is also one of the important tools to implement enterprise process re – creation.
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Benefits of ERP System
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Benefits to the organisation
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1. The company’s operating status can be informed by the information in the system at any time.
2. Establish the company’s management system and operating norms, operated by the system management company.
3. Establish a database of the company’s operations, accumulate the company’s management experience knowledge, There will be no loss of important information due to personnel changes.
4. By the integration of system information, can improve the company’s response speed, can reduce errors, save manpower.
5. A large number of computing functions provided by the system can strengthen the company’s production elasticity and improve the ability to receive orders.
6. The system can integrate the information of each unit, can be settled at any time, understand the company’s current operating costs.
7. The system conforms to the fiscal and tax regulations and may achieve the goal of internal control.
8. The system conforms to the specifications of the listing cabinet, can assist the company to go in the market on the cabinet operation.
9. The system can reflect the abnormal situation and provide relevant information to solve the problem easily.
10. The system can provide electronic sign-off and workflow functions to achieve paperless goals.
11. The system can operate queries remotely, which is convenient for cross-border management and is not restricted by region.
12. The system can manage funds and improve the effectiveness of their operations.
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Benefits for Inventory Management
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1. Can timely grasp the sales order, order volume, shipments outstanding and customer demand date.
2. You can always control the purchase of materials on delivery.
3. At any time to grasp the inventory status of material products, timely production, shipping arrangements.
4. To carry out the forecast analysis and material analysis of customer demand, so as to determine the production capacity, whether the material can reach the customer’s demand, and quickly feedback information to the business.
5. Through the main plan of the product, the finished product, semi-finished work order can be opened at once, reducing the workload.
6. Material requirements can produce the current product required materials inventory – has been allocated, in-transit quantity and expected inventory, the number of missing materials listed one by one, by the material control check, and can be directly transferred to the procurement system, resulting in purchase orders.
7. At the same time as opening the order, you can know the inventory of each material, the distribution and the quantity available for picking.
8. Processing centre performance analysis, you can understand the actual consumption of working hours and production efficiency, good yield, bad product rate and so on.
9. Product master plan progress tracking table, according to the sales order to query the production arrangements, the number of picking sets, the number of unutilised sets and the number of storage.
10. Order progress is reflected at any time.
11. Production line, in-process transfer control and per station input, output, in-process analysis.
12. The information tracking form for overdue orders can be processed in a timely manner.
13. Over-picking restrictions and replenishment procedures can be done.
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Benefits for Material Resource Planning
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1. Multiple BOM versions can be designed for the same product;
2. You can use BOM with similar product structure to copy directly, reduce input;
3. The multi-order relationship of the product can be clearly printed by BOM structure tree;
4. BOM structure comparison between different products can be carried out;
5. Changes to multiple product BOMs can be made at once;
6. Alternative relationships of materials can be maintained;
7. Can maintain the main product of the related product information;
8. All kinds of resources and individual resources can be maintained;
9. The production capacity of all kinds of resources can be adjusted at any time.
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Benefits for Quality Management
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1. Use of quality control operations to make the entire operation process, more rational, complete.
2. The record of feed is more complete, easy to trace, analyze and subsequent improvement.
3. Be able to record the whole production process in detail, so as to facilitate subsequent analysis and improvement.
4. Be able to analyze the supplier to provide us with materials – good and bad, in order to facilitate the corresponding adjustment of the operation.
5. Be able to focus on the analysis of the products produced within the company, whether there is need to be resolved.
6. Be able to cancel a large number of manual inspection reports, improve efficiency and reduce unnecessary human error.
7. Multi-link quality control operations, can carry out multiple certification of products, reduce the follow-up unnecessary duplication of operations.
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Benefits for Warehouse management
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1. Quick query to warehouse inventory and related materials such as the material in transit, has been allocated, has been receded and other quantities more comprehensive.
2. Inventory query method flexible and convenient, such as the history of a certain point in inventory, can check a certain type or a warehouse inventory status.
3. Can quickly query the safety inventory status of commonly used inventory, timely understand whether the material should be bought to ensure production needs.
4. Can quickly query the warehouse sluggish situation, in order to deal with in a timely manner, reduce the inventory backlog on the use of funds, improve the working power of funds.
5. Warehouse accounting is simple, easy, timely and accurate. Warehouse data can be based on the leadership needs to be produced in a variety of formats, fast and flexible.
6. Monthly inventory data generated quickly and easily, the system automatically generates the warehouse accounts and accounting of the profit and loss figures.
7. Warehouse documents can be automatically transmitted by the system to finance and other relevant departments, timely and accurate.
8. Warehouse information can be shared with other departments in real-time, and you don’t have to always get calls day to night to check inventory for others.
9. Abnormal inventory has special report statistics, so that warehouse operators can do a targeted check.
10. In line with the financial requirements, there is a separate interface for the inventory received at the end of the month to make an inventory estimate.
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Benefits for Purchase Management
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1. Resource integration, procurement system resources and other enterprises, financial and material resources integrated in a database
2. Information upload, purchase documents once entered, the system will automatically send a text message to the supervisor for approval.
3. Orders are issued, and purchase orders are automatically transferred to the warehouse department, making it easy for items to be accepted and stored.
4. Unified management of suppliers and their quotations, easy to assess and evaluate suppliers, comparative analysis of procurement prices.
5. Purchases can be arranged directly according to customer orders received by the business department.
6. The system calculates the original material requirements according to the production order issued by the management department and can be automatically converted into a purchase order.
7. Supply Chain Management (SCM) for upstream and downstream vendors can be maintained.
8. Financial accounting, purchase receipts are automatically transferred to the accounting system, making it easy for financial personnel for reconciliation and accounting.
9. The scope of purchased items can be divided according to the actual needs of different procurement personnel.
10. When the purchase order is entered, the system automatically brings in the approved price of the supplier to facilitate the delivery of orders.
11. The re-ordering of the original items of each department is recorded in the resourcing operation and can be automatically converted into a purchase order purchase.
12. Supplier delivery, temporary collection of information directly related to the quality control, inspection is qualified into the treasury, otherwise returned.
13. Provide all kinds of query forms, in order to keep track of purchase orders, purchase unit prices, manufacturer delivery, warehouse acceptance, procurement and collection, purchase reconciliation, accounts payable and other information.
14. Provide relevant statistical forms for senior supervisors to analyze and make decisions.
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Benefits for Financial Management
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1. Monthly financial statements are closed in a timely manner: such as the balance sheet provided by the finance personnel on a monthly basis, the monthly income statement, etc. System operations finance personnel no longer have to work hard to check for uneven borrowing.
2. Personal ledger management at a glance: as the factory no matter how many customers can be managed by the system, at any time can grasp their receivables outstanding, outstanding amount. Finance people don’t have to worry about general ledgers and ledgers.
3. All departments in the system operation linking, the final documents by the financial personnel to audit accounting, convenient for the internal management of the factory internal supervision, internal control.
4. Cost settlement is easy to complete. Monthly system transactions are normal, documents are complete, and cost calculations are easy to close.
5. The system operation pays attention to the timely entry of daily operations and document correctness inspection, the end of the month by the system to calculate the report data, is conducive to the rational use of human resources.
6. System operations not only provide reporting information for the month, but also provide a comparison of information between different months to benefit from the analysis of financial information.
7. Provide multi-angle analysis and statistics functions: such as sales (purchase amount) by customer statistics, by customer classification statistics, by sales staff statistics, by inventory statistics, by inventory classification statistics.
8. For the operation factories, the system provides the most convenient and efficient method for the exchange of information between databases, transactions between businesses, and consolidation of financial accounts
9. The use of budget functions, providing an analysis between budget and reality.
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Benefits for Managers
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1. Inquire about all data related to the company’s original material purchase unit price fluctuations, and respond in accordance with market conditions
2. The total purchase amount of the supplier during a certain period of time may be analyzed and the discount may be negotiated with the bulk raw material supplier according to the valid figure amount.
3. Sales part, according to a certain amount of time of sales, the customer can be divided, classified. Identify the customer.
4. Analyze customer orders and make trend charts for the volume of orders shipped. Analyze its costs and minimize their cost of selling, thereby increasing profits. And can make predictions about the sale of goods.
5. Analysis of inventory anomalies and inventory data, and the formulation of corresponding resolution plans. And feedback to the relevant departments. This optimizes inventory.
6. The project part can be used to control the project and analyze the profit and loss of the project. Assess its feasibility.
7. The annual cost part can be budgeted, and then compared with the actual occurrence, the difference part is analyzed and the corresponding strategy is formulated.
8. Purchase unit prices can be electronically signed and controlled so that purchase personnel must use the purchase unit price signed by the supervisor when placing a purchase order.
9. For the accounts receivable part, the system reflects the age of the accounts, can quickly understand the accounts receivable in real-time. Tracking is also possible.
10. Statistical analysis of the sales performance of business personnel, the development of appropriate reward and development mechanism. More to mobilize the enthusiasm of employees, for the company to create greater benefits.
11. To understand the scrap situation that occurs in the production process in a timely manner, to analyze the work orders that are abnormal in scrapping, and to formulate corresponding strategies.
12. Analysis of operating capacity, financial structure, profitability, analysis of each abnormal coefficient part.
13. In the process of using workflow message management, we can quickly understand the purchase order delay, the delay of the sales order, and make corresponding adjustments to the abnormality.
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Benefits for the Business
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1. Provide complete customer basic information documents, record the customer’s various details and related trading conditions with customers, convenient for future information inquiries;
2. You can easily and quickly enter sales orders, control the amount of products ordered, at any time to provide a single day report;
3. Shipped part of the system automatically charge, real-time to provide details of outstanding orders, convenient to check P/O residue;
4. Provide online production status analysis of orders, can accurately understand the current production situation, quickly reply to the customer delivery date;
5. Provide approved unit price management, provide transaction history unit price inquiry, you can understand the change of unit price;
6. Provide order forecast usage analysis table, Forecast part of the material demand operation, in advance preparation;
7. Provide order version control, according to the change of edition to trace the customer’s order modification content and original order information;
8. To provide the line of credit control, can ensure the timeliness of the return of funds, reduce the occurrence of bad debts, reduce the company’s operating risks;
9. To provide the company’s material number and supplier material number for order processing, shipping slip printing, query management, etc., greatly improving the efficiency of the operation;
10. You can always provide the shipping reconciliation schedule of the shipped part, convenient reconciliation with the customers;
11. According to the period, inventory, customer sales trend analysis report, understand sales trends, market trends, for future production, sales plans to provide first-hand information;
12. For the export portion, can be automatically provided according to the shipping order Invoice and Packing list, can meet the needs of export customers, without the need to repeat the operation;
13. Sharing of resources, access to the system, customer orders, shipping all relevant information at a glance, even is customer staff is not in, reply in a timely manner, to deal with customer problems.
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To conclude, ERP is a very mature information system, which is widely used in factories and organisations. More than 75% of enterprises above the scale are estimated to have ERP systems, and some may even have used ERP systems multiple times.
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