An ERP system that is properly matched to the needs of the company and utilized as an overall part of the business processes is able to serve as a business enabler to provide the visibility needed to control costs and enhance customer service. It does so by providing a framework for standardized business processes utilizing best practice concepts and allows coordination between different business functions. Some of the key benefits of a successfully utilized ERP system include:
- Better visibility to business processes across multiple functions and departments
- Improved customer responsiveness
- Reduction of inventory and improved inventory accuracy
- Reductions of administrative and manufacturing operational costs
- Improved manufacturing schedule compliance and complete on-time delivery
- Reduced customer lead time and improved quality performance.
Metrics to be used to measure success in an ERP environment include:
- Inventory Days Supply – number of days inventory based on projected usage.
- Manufacturing Schedule Compliance – percentage of work that is completed on time per the manufacturing schedule
- Complete and On-time Shipments – orders shipped complete and on-time per the customer’s requested date
- Order Cycle Times – various cycle times can be measured, but the customer order date to the delivery date cycle measures the time from a customer point of view
- The Bottom Line – The most important measure! As cost performance improves, so will the bottom line.
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