This is part 2 in a series of posts on the use of ERP in the process manufacturing environment. Our own experiences implementing systems for process-based manufacturers ties in nicely with a recent report from Aberdeen Research titled ‘ERP in the Process Industries: Functional Ingredients to Create a Good Mix’. You can find a link to their report in our first post in the series, found here.
In our first post we look at the pressures that drive process manufacturers to ERP solutions. Today we look at what defines a Top Performer in process, and how they get there.
Aberdeen calls the top 35% of its surveyed performers “Leaders” based on a survey of over 100 process firms. The rest are simply deemed “Followers.” Here are some interesting benchmark performance comparisons between the two:
|Reduction (improvement) in Inventory Levels||15%||6%|
|Days to close a month (accounting)||4||7|
|Manufacturing schedule compliance||94%||87%|
|Complete and on-time shipments||97%||89%|
The leaders gain some differentiation because they:
- Standardize and streamline processes – cited by 56% of respondents
- Enable collaboration across the organization (including outlying locations) (28%)
- They are able to do a mock recall of their products (33%)
- They can do demand planning and forecasting (54%)
- The have a central repository of metrics and KPIs on-demand (50%)
The best process manufacturers focus on the above capabilities, and in doing so, they improve performance, improve regulatory compliance (as well as customer service and fulfillment levels) and work at measuring the results in order to ensure continuous improvement – even as they sometimes are forced to battle with changing regulations.
Aberdeen also finds, tellingly, that the “Leaders” in process manufacturing – those Top Performers – are also able to “roll with the punches.” They found that nearly 50% have the ability to quickly change their ERP solution to react to business change; in other words, they’re “agile”. They have automatic alerts built into their systems. And nearly three-fourths have resources (either internal or available from their consultants/implementers) to “manage, change, reconfigure and customize their ERP.”
In other words, their systems are flexible, modifiable, and reconfigurable on reasonably short notice. As implementers ourselves, we couldn’t agree more.
In our next and final post in our series, we’ll look at the role “data” has in driving decisions at the top performing process manufacturers, and finally, review Aberdeen’s key findings and recommended actions. Stay tuned…