Monday, December 1, 2008

Cost Control Becomes the Number One Pressure

Cost control has been cited by Aberdeen Research as the number one pressure impacting the ERP strategy within a manufacturing company. This phenomenon is particularly prevalent in process industries where cost control has gained a renewed focus in these economically hard times. As a result of their recent survey, the top four pressures were listed by Abredeen as:
  • Must reduce costs
  • Must improve customer response times
  • Must be easier to do business with
  • Need to manage growth expectations

With the emergence of cost control as the number one business driver this year (number two last year), the following were listed as the top cost issues:

  • Rising costs of raw materials
  • Rising energy costs’ impact on manufacturing operations
  • Rising energy costs’ impact on in/out bound transportation
  • Impact of poor quality
  • Proliferation of changeover costs

ERP systems are able to assist the organization in managing these costs with the integration and data availability that are inherent in most systems today. By properly aligning business processes and ERP functionality, manufacturers should be able to gain control of most of their significant costs. Along with the standard features of an ERP system, there are special enablers that exist in many systems that can prove to be very useful:

  • Advanced Planning and Scheduling
  • Inventory Optimization
  • Material Change Management
  • Event Management (triggers and alerts)
  • Manufacturing Execution System (MES)
  • Enterprise Asset Management
  • Specialized Inventory Management features: Lot Traceability, Shelf Life Management, Actual Costing, Co and By-Products, Compliance Reporting

Peak Enterprise Solutions is able to help clients redesign their business processes and utilize the tools of the ERP system to allow them to increase the value of their business.

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