November 29, 2022

How to Get the Most Out of Your ERP System: 8 Smart Ways

With the help of an ERP system, your daily supply chain operations can be made much easier and less time-consuming.

This system can really help you with many supply chain tasks, such as production planning, MRP, inventory control, delivery control, and many more.

All the calculation you need to do can be done in less time, is more accurate, and might even be easier.

Certainly, if the parameters you put in are correct.

And most importantly, all organizational functions, including PPIC, Production, Warehouse, Procurement, Accounting, Human Resources, and others, use the same data to do their daily work.

That would make it much faster to share information between functions. You don’t have to send emails or paper documents to share information.

Sadly, it’s not always as easy as it sounds to put in place an ERP system.

Some companies have good ERP system support, but they haven’t been able to use the system to its full potential.

They don’t use the ERP system in the best way possible.

What’s the matter?

Shouldn’t you just use it? Done.

It does look that easy. But things aren’t that easy in real life.

Then, how can the ERP system be used to its fullest?

In this post, we’ll talk about that.

Before we go any further, make sure you have also joined the scmguide telegram channel, where I share many more supply chain management tips that are sure to be helpful.

What keeps companies from making the most of ERP systems?

Yes, the big question is why some companies don’t use the ERP systems they already have to their fullest potential.

Why is it that even though they have an ERP system, they still have to do more manual work that takes more time and effort? Not to mention the fact that its accuracy is still up for debate.

Let’s take each one in turn.

Small-minded, this has always been the case

The first and most basic has to do with how you think.

It’s not easy to change habits that have been formed over time.

If you’re used to doing everything by hand, it’s not easy to switch to a way of working that is more automated. People there don’t want to change.

How to maximize ERP system advantages.

When asked to change, they usually say, “Oh, it’s always been this way. Never had a problem.”

Even if it’s true that there’s never been a problem, there’s still a faster and easier way to get the job done.

If you use your ERP system to its full potential, you will need fewer people to do this work. Especially for jobs that are repetitive and have a lot of paperwork.

From this point of view, what people who think this way do hurts the company in the long run.

Why?

Because they spend too much time working on things that shouldn’t take that much time.

And that includes wasting money because the company has to pay their salaries when everything could be done automatically with the ERP system it already has.

Is that no big deal? That is, of course, a problem.

Afraid, don’t want to take risks

Almost every change is scary.

The same is true for the change from manual to digital operations.

Yes, it is possible that the way things have been done for years will change. We need a way to change. Everyone will need to be ready to shift with this change.

And there may be some problems during the process of changing. That’s normal, though.

Prepare for the possibility that it will happen, and if you need to, make a backup plan to make the change go more smoothly.

You shouldn’t be afraid of the risks that could happen if you try to use an ERP system in more of your organization’s functions.

Even more so if you have spent money to set up the system. Isn’t it a shame that your money goes to waste?

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Can’t figure out how to use it

Another reason why companies don’t use ERP systems is that they don’t know what they are or how to use them.

Even worse, you don’t know how to use it, but not trying to figure it out makes it even worse.

How to maximize ERP system advantages.

This ignorance is normal, especially in the early stages of putting in place an ERP system.

But if you still don’t know after all these years, that’s not normal.

What companies do when they don’t know something is what makes them successful or not.

Do they want to stay in the dark, or do they want to find out?

Not sure where to start

It’s not always easy to start something new, especially if it will replace the old way of doing things.

Not every business knows where to begin.

And because of that, they don’t get the most out of putting an ERP system in their company.

No one knows everything

Everything will be easier if you have experts who know how to set up an ERP system in your company in the best way possible.

The problem is that there aren’t enough of these experts. To get it, you have to compete with other businesses.

And if your company doesn’t have experts, you don’t have a place to ask questions about how to use this ERP system well at your place.

Leaders who don’t support change

This is the main reason why a company doesn’t use the ERP system it already has.

What is it?

You don’t have the support you need from the top to start a change.

But someone needs to be in charge here.

Whether you succeed or fail will depend a lot on what role you play as a decision maker.

How businesses can get the most out of ERP systems

Once you know what makes it hard for a company to implement an ERP system well, the next step is to figure out how to fix the problems they cause.

In this part, we’ll talk about these things.

Let’s talk about them one by one.

Change has to start with the leader

As I’ve already said, the leader has a big part to play in how well a change works.

So, the first thing you need is, of course, the full support of the company’s decision makers.

If the company’s top management doesn’t agree with the change, it’s over. The company will always be hard to change.

So, this is the first and most important thing you need to be able to use an existing ERP system to switch from manual to digital operations.

Make a list of the functions you’ve used and the ones you haven’t

Make a plan for how your ERP system will work.

Make a list of all the things your ERP system can do, then compare it to what you’re already doing. There, you’ll see the difference.

So, what should you do next?

If you need to, you can remap your needs.

Check again to see if the existing functions are enough to meet your needs. Or, do you have many needs that haven’t been met that could be met with functions you haven’t used?

You really need to know exactly what your ERP system can do, what you are already using, and what you can still use to make your work even more effective and efficient.

Don’t let you not know what your ERP system can really do.

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Make a plan to use your ERP system’s functions as much as possible

Make a plan to use your ERP system more once you know what it can do and what you need it for.

Figure out when you will start putting these functions into place.

So, you’ll have a clear plan for how to get the most out of the functions that are already set up in your company.

If you don’t have this plan, what you need might just stay a wish and never come true.

If you already spent money on the ERP system but didn’t use it to its full potential, that would be a shame, right?

Make a team of all the functions

Now that you have everything you need and have made plans, it’s time to put together a team.

Make sure you include all related functions, because there will be conflicts of interest when this ERP system function is put into place.

So you have to make sure that all the functions match the workflow that will be set up later.

You can include Sales, PPIC, Production, Quality Control, Purchasing, and even Accounting and Human Resources.

Execution, monitoring and evaluation

After all the planning is done, the next step is to carry out the plan.

Carry out your plan and change it if you need to.

Keep an eye on the project to make sure it stays on track. And figure out if the results still need to be changed or not.

Figure out the next step in development

After you’ve successfully made more use of your ERP system, you still have work to do.

You need to start thinking about the next stage of growth. How you can get the most out of it or make your workflow even better and more effective.

There will always be ways to do things better. You really need to keep that in mind.

Find a professional or a consultant

If you don’t think your team is strong enough to handle the steps above, you might want to ask a consultant or an expert for help.

They can tell you a lot about what might be your best choice.

There may be extra costs, but if the end result is worth it, why not?

Or, you can hire them and make them the team leader for your project to make things better. That is another choice.

Support of all functions

And making sure all functions work is one of the most important things.

The supply chain, or in this case the use of an ERP system, will involve many parts of the organization.

That’s why you really need all functions to back you up. You won’t be able to do anything on your own. Without the help of other functions, you won’t be able to think of everything.

So, make sure that all the parts of your business send the same message and serve the same purpose.

Even if there is a conflict between functions in the future, make sure that everyone can adapt and put the organization’s needs ahead of those of their own departments.

Conclusion

An ERP system is not just a passing trend.

Already, you’ve spent money on it. So you should use it to its fullest.

Most of the time, it will be hard to use. That’s pretty normal.

The most important thing, though, is what you do when you run into problems.

You can use some of the above steps to get the most out of your ERP system.

What resulted?

Your business will work better and more efficiently, and the money you spend won’t be wasted.

I hope it helps!

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Dicky Saputra

16+ years of experience in supply chain management. I help companies improve their end to end supply chain performance.

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