Aberdeen: ERP Reduces Costs, Improves Customer Satisfaction through Collaboration
January 30, 2009 // Published as a news service by IHS
Top complex manufacturers use enterprise resource planning (ERP) to produce 98% inventory accuracy and 97% complete and on-time shipments, according to the Aberdeen Group.
Analysts said complex manufacturers are also three times as likely to produce accurate bids, while 75% integrate manufacturing operations with front and back offices, and 81% have their manufacturing and corporate IT work collaboratively to implement technology.
To win repeat business and remain profitable, complex manufacturers are stressing collaboration and visibility into manufacturing operations, according to Aberdeen.
"Actual cost to bid is a measurement that directly impacts a company's profitability," said Cindy Jutras, vice president and group director at Aberdeen.
"When the actual cost is lower than the bid proposed to the customer, companies run the risk of losing business to a lower-priced competitor. If the actual cost is higher than the quote, the company loses money on the order," she said.
Jutras said top manufacturers are more than three times better at closing the gap between bid and actual costs. They are also almost twice as likely as competitors to fully automate actual costing, which protects margins without sacrificing productivity.
Aberdeen made several recommendations to improve performance, including:
- Encourage collaboration through cross-functional continuous improvement teams.
- Implement real-time visibility into operational performance, and progress from there to predictive exception alerting.
- Automate processes such as hand-offs between engineering and manufacturing, costing and scheduling.
- Improve remote and/or mobile access to ERP data.
For a copy of the report, "ERP in Complex Manufacturing: Improving Collaboration and Visibility," go to Aberdeen.
Source: Aberdeen Group Inc.