Top Ten Problems Solved by SAP Business One in Manufacturing.
Problem #1: Inventory Inaccuracy
If you are a small to mid-size manufacturing company and you are considering investing in ERP, then some of the following may strike a chord with you. SAP Business One is widely regarded as one of the “go to” ERP brands for companies like yours.
In this blog, we highlight ten reasons why.
The inventory problem
Let’s examine three examples of inventory inaccuracy in the context of manufacturing.
Firstly, inaccurate inventory records disrupt production. Unexpected shortages of raw materials or components can cause delay, cost overruns, scheduling nightmares, and late deliveries.
Secondly, increased cost. Overstocking can help minimise disruption to manufacturing, but it is expensive. It is money sat on the shelf. Literally.
The alternative is to buy raw materials in piecemeal fashion. This means paying higher shipping costs. You also miss out on discount that you could have received if only your buying was better planned.
Our third example relates to quality control. Inaccurate inventory records can lead to the use of incorrect materials, which can compromise the quality of your products. This can result in increased returns, warranty claims, and damage to your company’s reputation.
In regulated sectors such as food production, it can also mean non-compliance. This may cause recalls, fines, legal challenges and further reputational damage.
The root cause of inventory inaccuracy
The origin of inventory inaccuracy can usually be traced to a single cause: manual processes. Manual systems are prone to human error, inefficient, and difficult to control.
Human error can be many things; errors in data entry, mislabelling of items, or simply placing items on the wrong shelf. Inefficiency often happens when procedures are not standardised. It can also occur due to inaccurate forecasting, or outdated information due to slow, manual processes. Whatever the cause, the result is the same.
How SAP Business One can help
The are many ways in which SAP Business One can help your business. Here are four examples:
Firstly, by delivering better information to inform decision making. And by better, we mean information that is accurate, real-time, and tailored to your needs. A Stock Bin Location dashboard for example, simplifies the management of items, stock levels, price lists, special price agreements, stock transfers, and stock transactions.
Secondly, by improving the accuracy and timeliness of shop floor data capture. SAP Business One supports the full range of devices for operators in your warehouses and production.
Thirdly, by enabling a more proactive approach to inventory management. It alerts you to important changes or thresholds, such as:
- Bin capacity being exceeded
- Stock levels falling below or rising above predefined limits
- Items being placed in incorrect bins
- Movement of goods between bin
Fourthly, through automation. MRP in SAP Business One for example, draws on powerful analytic capabilities to improve the accuracy of forecasts. It then presents you with a number of recommendations and documents awaiting your approval. The net result:
- The right level of stock is available when you or your customers need it
- Cash Flow is improved by purchasing Just In Time
- Purchasing from preferred suppliers ensures quality standards are maintained
- Accurate and real-time visibility of stock improves Customer Experience
Take the next step
In the next blog in this series, we highlight the problem of poor material planning.
To find out how SAP Business One from LAKE could help your business, download a copy of our SAP Business One Beginners Guide – Manufacturing.
By Fraser Dunlop