IoT – in Tandem with ERP – Spurs Quantum Improvements in Manufacturing
Terri Hiskey, Vice President, Global Product Marketing - Epicor
ERP is at the heart of the business of most enterprises. In fact, 81% of enterprises are in the process of adopting or have already adopted ERP solutions, according to Panorama Consulting.
Today, ERP technology has advanced to levels never imagined. With the potential to seamlessly tie all the business’s applications together into a consolidated platform, ERP can improve data visibility, control, as well as financials and resource management. “Every organization that implements an ERP system is, in effect, reengineering,” said Marianne Bradford in her book, Modern ERP.
Still, one sector, manufacturing, is plagued by manual processes. A recent study by analyst Cindy Jutras found that, on average, 26% of manufacturing orders today are manually entered. This hinders productivity, as it is a very time-consuming and prone to errors. And the inefficiencies continue throughout the manufacturing flow and can put delivery deadlines at risk.
IoT Generates New, Critical Data
But now, IoT shows promise for reducing inefficiencies in manufacturing. ERP systems are now branching out, incorporating an IoT layer. IoT has the potential to greatly increase data availability and accuracy. This has significant implications for keeping processes on track by enhancing ERP in areas including customer service, forecasting, inventory and asset management, and business intelligence. The data accumulated by IoT sensors is directly fed to the ERP software.
IoT has already made a substantial impact in the manufacturing sector by bridging disparate systems – which would otherwise have to be bridged by a complex system of APIs (Application Programming Interfaces), and at an affordable price point. In a sense, IoT has become the “great equalizer”. For instance, the sensors attached to manufacturing floor equipment enable a greater level of maintenance automation and ensure that vital data is accessible to everyone who relies on it, from shop floor technicians to C-suite decision-makers.
Now let’s address the link between IoT and ERP, as well as IoT’s impact on ERP systems. It’s common knowledge that IoT opens new opportunities for organizations to collect data. With sensors and cameras embedded in products, companies get detailed information on product status, right from production, through transportation, and all the way until the product reaches the customer’s hands.
Throughout this end-to-end process, data is the link, connecting IoT and ERP. When armed with IoT data, ERP helps organizations gain vital business-related insights instantaneously. The continuous stream of data enables enterprises to carry out real-time analysis, which will help them gain actionable insights to make quick, tactical decisions that can increase revenue generation significantly.
And, of course, the more relevant the data enterprises gather, the greater the chances of gaining actionable insights for business improvement and expansion. By integrating IoT and ERP, companies can improve data availability, substantially contributing to their efforts to achieve operational excellence.
Any changes in process can be reported in real-time. For example, sensors integrated into machines in a construction site can send real-time information on the working condition of the equipment. If the IoT data is linked to the ERP system, the occurrence of any problems pertaining to equipment health will be directly reflected in the application. Concerned workers will receive alerts nearly instantly via the ERP platform, helping them take immediate action as required.
It’s clear that IoT has proven successful at significantly augmenting the functionality of business management applications and how companies do business.
IoT In Tandem with ERP Streamlines Manufacturing Functions
Let’s look at how IoT is aiding manufacturing functions.
IoT improves business communication, automates daily processes, and offers manufacturers the ability to fulfill customer needs and manage resources – all by accessing real-time data. This real-time data also optimizes project and cost management as well as production planning.
Consider IoT’s role in the following processes:
Supply Chain. If your company is still entering information by hand and trying to track down inventory in your warehouse, you can save time and money by automating these processes with ERP, via data gathered by IoT sensors. Modern supply chain solutions also offer dashboards and business intelligence to help you get a handle on your inventory management.
Asset Performance Management. By placing one or multiple sensors on a machine, you can gather metrics to track the performance of the machine, either at the moment or over time. The highly granular views of machine performance you gain are virtually limitless in their ability to indicate a potential failure, or perhaps to “end-of-life” a machine – all in the name of managing assets, controlling capital costs, and simply keeping manufacturing processes operating optimally.
Order Processing. Automating the process of reordering by using IoT sensors to track inventory and materials is another application. It can let you know, for example, when you're getting low on a required material. Moreover, you can set a threshold that says, in essence, “If we go below the threshold, order an additional X amount.” With appropriate processes in place, that order will automatically be placed, but will also trigger an order to replenish the material so that you’ll never be out of stock. Eventually, if you adopt AI for your manufacturing and production systems, an output of the AI will alert you even before an IoT sensor alerts you.
In sum, as enterprises deploy IoT more expansively across their operations, the vital data “fed” to their ERP systems drives more accurate and incisive reporting. In that sense, IoT may become the first engine in years to deliver quantum improvements in manufacturing.