Continuous improvement in business operations is becoming a perennial concern for companies that wish to operate in “Best-in-Class”manner. Businesses that strive to attain this, are actually progressing towards operational efficiency, beating the competition and making it to the top. However, there are many hindrances that they face along the process. Lack of information flow among the departments and incoherent processes come first in the list. Abrupt working halts due to information or approval dependencies and lousy manual processes not only makes it difficult to achieve efficiency but add up to costs and losses.
According to Aberdeen, more and more companies that aim at operational efficiency are relying on an ERP to achieve it. Statistics show that of this group, 70% of ‘Best-in-Class‘ companies already have standardized ERP implementations.
The key advantage of an ERP is its centralized database system that integrates information from all individual yet interdependent departments into a single software application. This makes tracking workflows across the organization effortless. As soon as one department finishes its operations and records the data of the same, it can be viewed by the other departments in real-time. This eradicates the road blocks and delays, instead it allows the tasks to occur step by step, one after the other in a well-timed manner. With this visibility, they can easily analyze and compare functions, identify problems, detect causes of inefficiencies and immediately take action to keep the wheel rotating. For example, by efficiently planning production and procurement, operational efficiency is improved by reduction in setups and teardowns or unnecessary downtime.
In contrast, the companies that still follow old or traditional methods of working by using spreadsheets or disparate systems, find their employees struggling or shoehorning in to get the information they need, in the way they need it. While with an ERP, your employees can be re-deployed to focus on strategies that drive results.
If rolled-out and deployed properly, an ERP System can significantly raise the bar of operational efficiency by:
- Automating and accelerating business processes, locally as well as at multiple locations
- Streamlining operations throughout the enterprise, including Planning & Scheduling, Procurement, Inventory Management, Plant Maintenance & Capacity Utilization, Production, Quality & Compliance and Sales & Shipment
- Strengthening the collaboration within the departments and organization
- Providing a smooth flow in overall operational processes from start to finish through SOPs, Notes and attachments
- Delivering accurate demand forecasts and planning to enhance manufacturing performance
- Tracking finances along the length and the breadth of the organization and beyond
- Eliminating a variety of logistics problems like document generation, processing of materials to the packaging and deliveries of finished goods
Conclusion
In a nutshell, operational efficiency gained through automatic and coherent workflows connecting one department to another, ensure a smooth transition and quicker completion of processes. This also ensures that all the interdepartmental activities are properly tracked and none of them is ‘missed out’. This opens door to vast business process improvements as indicated by coordination of various business activities, rewarding business decisions, and better customer feedback. All this together result in better quality and thus increased customer retentiveness, reduced costs as well as losses and thus, higher profits. But, the most important of all, a stress free working environment.
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