How To Make an ERP Work for Your Small Business

All businesses, including small manufacturing companies, can greatly benefit from an Enterprise Resource Planning (ERP) system.

Although ERP solutions were initially designed for large corporations, modern, industry-specific ERP systems are now available to assist manufacturers of all sizes in streamlining operations and centralizing data. The advantages of increased productivity, improved information sharing, informed decision-making, efficient data management, and enhanced visibility and collaboration make ERP systems essential tools for manufacturers of all sizes. By adopting an ERP system, small businesses can optimize their processes, reduce inefficiencies, and drive growth.

Read on to discover the 11 benefits of an ERP system for small manufacturers — plus learn four tips to maximize an ERP system’s potential in your business.

11 Benefits of an ERP system for Small Businesses

1. Improved Efficiency

Small manufacturing businesses can significantly increase productivity with an ERP, as ERP solutions automate and streamline various business processes, reducing manual work and increasing overall operational efficiency. This automation not only saves time but also reduces the likelihood of human error, leading to more consistent and reliable production schedules.

2. Increased Productivity

With automated processes and better resource planning, employees can focus on more value-added tasks, leading to higher productivity levels. An ERP system streamlines routine tasks, allowing staff to dedicate more time to activities that drive growth and innovation.

3. Cost Savings

Improved efficiency and better resource management can lead to significant cost reductions in various areas, including inventory, production, and administration. By optimizing processes and reducing waste, small businesses can see a substantial impact on their bottom line.

4. Scalability

ERP solutions are designed to grow with your business, making it easier to scale operations and handle increased demand without significant additional investment. This scalability ensures that as your business expands, your ERP system can adapt and support new requirements seamlessly.

5. Enhanced Data Accuracy

An ERP system centralizes data, minimizing errors associated with manual data entry. This centralization ensures more accurate and reliable information for decision-making, providing a solid foundation for strategic planning and operational adjustments.

6. Better Data Management

Manufacturing is an inherently data-intensive industry, and even small companies generate a significant amount of data. An ERP system helps make sense of this data, organizing and analyzing it to provide actionable insights. To maximize productivity, manufacturers need to manage their resources effectively, including cash, raw materials, personnel, and production capacity. An ERP system provides the necessary tools to handle these resources efficiently, far beyond the capabilities of basic tools like Excel.

7. Improved Customer Service

With better access to information, businesses can improve order accuracy, delivery times, and overall customer satisfaction. An ERP system enhances visibility into customer orders and inventory levels, enabling more reliable and timely fulfillment.

8. Effective Financial Management

An ERP system provides real-time financial data, helping businesses manage cash flow, track expenses, and generate accurate financial reports. This financial oversight is crucial for maintaining the financial health of the business and making informed decisions about future investments.

9. Efficient Information Sharing

An ERP system allows for seamless integration and connectivity across all departments within a company. This connectivity facilitates easy sharing of data and information between divisions, streamlining processes and improving overall operational efficiency. With an ERP system, communication barriers are minimized, enabling better coordination and collaboration among teams.

10. Informed Decision Making

Accurate data and reporting provided by an ERP system enables businesses to track progress, productivity, and performance more effectively. This improved insight into business operations supports better decision-making. Real-time data and reports offer a clear view of key performance indicators, allowing business leaders to make informed decisions that drive growth.

11. Enhanced Visibility

An ERP system offers complete visibility into a company’s operations, giving manufacturers a comprehensive understanding of their organization and its functions. This visibility extends to real-time dashboards that monitor operations and assess crucial performance indicators through easy-to-read reports. Such features enable businesses to share information effortlessly between departments, fostering a collaborative environment that enhances operational efficiency.

4 Tips To Make an ERP System Work for Your Small Manufacturing Business

Implementing an ERP system can transform the way your small manufacturing business operates, driving efficiency and growth. However, to take full advantage of it, it’s crucial to approach the process strategically. Here are four essential tips to help you make the most of your ERP system investment, making sure it fits your business needs and improves your operations.

1. Choose Wisely

Selecting the right ERP system is crucial for your business.

Modern, industry-specific ERP systems’ are designed to meet the unique needs of different industries, including small manufacturing businesses. Unlike the one-size-fits-all ERPs of the past, these tailored systems come preloaded with the features your business requires, such as scheduling and shop floor management systems. By choosing an ERP built for your industry, you can implement it faster and more efficiently without the need for extensive customizations.

2. Identify Your Business Goals

ERP systems offer a wide range of benefits, from boosting production and efficiency to enhancing data security and improving quality management. For small businesses, it’s essential to identify your specific goals before implementation. Focus on your most problematic areas first, implementing the ERP modules that address these issues. This phased approach allows you to achieve your top priorities and gradually integrate additional features, making the process manageable and budget-friendly.

Implementing an ERP system is not a one-time event. It may take over a year to fully integrate an ERP into your operations. Breaking the project into smaller stages, each focused on specific priorities, helps maximize the benefits. Continuous learning and training are vital to ensure your team can fully leverage the ERP’s capabilities.

3. Automate Repetitive Tasks

One of the biggest advantages of an ERP for small manufacturing businesses is the automation of repetitive tasks. Automating routines and procedures, particularly in inventory management, order fulfillment, and tracking order statuses, ensures that important information is always up-to-date. ERPs can manage raw materials, provide real-time inventory counts, and streamline the assignment of parts to jobs, helping you complete tasks more efficiently

In a small shop where employees often wear multiple hats, automating daily tasks frees up time for more complex duties. An ERP system centralizes data, making it easily accessible to all team members, and automates reports, allowing your team to focus on strategic tasks rather than manual data processing.

4. Take Advantage of Built-in Analytics

Use your ERP system’s data analytics features to gain insights into your customers, operations, and business performance. High-quality, industry-specific ERP systems come with robust analytical tools that help you gather, organize, and analyze data, providing a comprehensive view of your organization. These insights can guide you in improving machine performance, identifying bottlenecks, reducing scrap rates, and enhancing productivity.

Analytics enable faster, better business decisions that drive your business forward. By understanding and acting on the data provided by your ERP system, you can continuously refine your operations and increase profitability.

ERP Solutions for Small Manufacturing Businesses

The right ERP solution for your small business depends on your specific needs, industry, size, and budget. While the best solution for a large corporation may not suit a small business, there is an ERP system out there tailored to your requirements.

ERP systems designed for small businesses help organize sourcing, tracking, and order management, reducing inventory costs and enabling smarter purchasing. They improve efficiency, increase throughput, and support business growth.

You no longer need to ask, “Is an ERP right for a small business?” Instead, you can rest assured that an ERP is the best solution to support and manage your manufacturing business, no matter the size.

Curious about how an ERP can help you? Check out our case studies to see how Genius ERP has helped small businesses like yours grow.