ERP System Helps To Reduce Overall Labor And Production Cost As Well As Enhances Efficiency
If the cost of labor is not evaluated or allocated accurately, then it can damage the business’s profits. With an ERP [Enterprise Resource Planning] system you can easily manage the labor costs and business processes in a better way.
Reliable ERP software can help your business at many different levels, ranging from creating better employee schedules to providing real-time data, and production optimization. It not only helps in labor cost management but even improves the efficiency and productivity of operations.
The integration of ERP with essential company activities leads to a reduction in operating costs in certain areas. It is no longer necessary to utilize a range of systems across the many departments and physical locations because this requirement has been eliminated. Because the systems have been centralized, the processes have been streamlined, which has prepared the way for an improvement in the information interchange throughout the business.
With automation, more tasks get completed in less time. Fewer resources and fewer people can manage tasks as centralized data allows for accurate forecasting of production levels. Managers will be able to make data-driven decisions, instead of making subjective decisions. This helps in bringing about transparency in business operations.
“The time spent on sharing the information between different departments can be remarkably minimized. This leads to low operational costs and works perfectly in sync with business expansion goals. ERP is the way forward for businesses as it allows for eliminating most areas in businesses that cause delays. The speed of project deliveries will increase, leading to improved ROI” – Sunil Gupta, CEO of acgdigitalmarketing.com
Real-time data offers more visibility
The ERP solution offers real-time data that will give you a proper picture of how your employees are spending time on the business floor. You get to detect holdups and jams on the shop floor that prevents employees from doing their tasks efficiently.
ERP allows the employees to log in & out, so you always know the progress level of the project. It allows you to take appropriate action in case things move more slowly than expected. Through custom dashboards, you gain all these insights directly on your computer. It means you don’t need to go on a tour around the business floor to see what is going on.
The information that needs quick attention will always be available on the ERP system dashboard. Your business will run effortlessly and easily from your fingertips.
Keeps track of the labor costs
No worries about timesheets getting lost because the paperless system saves data. You can track downtime of direct labor to the minute for every project, the team works on. Besides, going paperless is great for the environment.
Scheduling process optimization
The lack of data or clear vision that prevents managers from making informed judgments about the capabilities and schedules of their teams is the primary cause of employees working unnecessary overtime hours. Project managers are able to acquire more details up front and greater clarity during the workday with the help of scheduling process optimization. It guarantees that a greater number of jobs will be finished within the typical working hours.
Scheduling process optimization means making efficient use of employees’ availability and capability. For example, with key staff details like relevant experience and skills, you can make schedule decisions. Deliver best travel route to desk-less employees through mobile devices to lessen distracted driving or late arrivals.
Every company must determine their personnel strategy to optimize the scheduling process based on KPIs crucial for their business like delivering service cost, customer satisfaction, total appointment numbers, employee satisfaction, etc.
Scheduling process optimizations benefit the employees in several ways. It provides the workers with advance shift changes notice, which reduces the unpredictability and possibility of burnout from repeated unplanned overtime.
It ensures each employee gets sufficient rest between shifts. The job starts and concluding time is accurately recorded with less effort. Employee satisfaction means less cash is spent on recruiting, hiring as well as training to address the turnover.
Project managers can even differentiate between understaffed and underutilized workforce. Proactive steps are taken to resolve the underlying issue and increase employee utilization rather than hiring extra workers to resolve the staffing shortages.
Production optimization
ERP system brings huge cost savings by helping in streamlining production processes, which ensures efficiency and lowers overall labor costs. An automated process makes the entire production line efficient and employees more productive. With ERP data, you can redesign the shop layout or manufacturing processes to create a leaner and more effective production environment.
For example, schedule labor and machine time accurately, so that employees don’t have to wait for instructions or new tasks to do. Without the floor data, your schedules are guesswork but with real-time data, you know that the business is sufficiently staffed to fulfill the demand, which eliminates unnecessary labor hours or overtime.
With an efficient production process, the employees stay focused and produce more products. This reduces per unit labor cost and the overall labor costs.
Automation of repetitive tasks
Automating repetitive tasks is also crucial for not just desk-less employees but even desk-based workers. Integrating simple recurring tasks like automatic login or sharing data like job completion details, locations, arrival time, etc. saves plenty of time. The lesser time employees spend on these operational and administrative repetitive tasks the more productive they can get. It drives the overall operational and labor costs down.
Eliminates process duplication
Accounting, customer service, inventory and supply chain management, invoicing and payment are just some of the business operations that can be unified and automated by an enterprise resource planning (ERP) system. The time has come to put an end to the practice of having several individuals make modifications to a single operation until it no longer resembles its initial goal.
Only a couple of key employees were capable and without them, the entire operation could instantly be halted or thwarted. As ERP is a centralized system all the business functions are conducted on time and efficiently.
Inventory optimization business
As all the processes are standardized, every employee constantly follows the same processes ensuring consistency for recurring tasks. The ERP system even helps to decrease product shortages because it proactively resolves the supply chain gaps. The planning of the budget for the inventory is enhanced as a result of the large reduction in the number of wasteful purchases of products that are likely to remain unused in the storage facility for a lengthy period of time.
