BENEFITS OF ERP :
The Benefits of ERP are both direct as well as indirect. The direct benefits include better decision-making , faster response time to customer quires etc
The indirect benefits involve better corporate image , improved customer goodwill , customer satisfaction , & so on
The instances of ERP benefits are :
Reduction in lead-time
On time shipment
Reduction in cycle time
Better customer satisfaction
Improved supplier performance
Increased flexibility
Reduction in quality costs
Improved resource utility
Improved information accuracy & decision making capability
Reduction in lead time
The time elapsed between placing an order & receiving it is known as lead time . If a stock is not available on time problems like missing a delivery schedule , losing the customer goodwill due to delayed delivery or loosing the customer completely occur
In order to avoid this large buffer stock is maintained or a high reorder level is maintained this leads to high inventory costs .
ERP avoids this by maintaining & processing the individual lead times of different materials in a inventory which at times could run into thousands of different materials & a efficient system is established
On- Time Shipment
Customer specific products require a long time to deliver as against off the shelf products . ERP specifically closes this gap & yet maintains the cost & time advantage . With ERP businesses are not limited only to a single manufacturing method such as made to stock or made to order & without a major change in work place or plant layouts
Reduction in Cycle Time
Cycle time is the time between receipt of order & delivery of product . The cycle time & cost of production are high for a Made to order product as compared to off the shelf product .what erp does is that it reduces the cycle time of both the varieties of the goods . but the reduction in cycle time of a made to order product is high & significantly reduces the cost of manufacturing
Better Customer Satisfaction
Customer satisfaction means meeting or exceeding the customers requirement for product or services .
ERP systems have proved that they can produce goods at flexibility of
Made to order approach without loosing the cost & time benefits of made to order operations . means that each customer will get individual attention
& feature that he wants Also the introduction of web enabled ERP systems , the customers can place orders , track the status of order & make payment sitting at home .
Reduced quality costs
The quality costs are normally 20 % of the goods sold .Carefully planned Quality improvement activities not only improves quality , but lowers quality related costs
Quality Management Systems in ERP packages support bench marking & use of optimal product design , process engineering & quality assurance
Specification Control Systems in ERP packages , offer state of the art approach for documenting specifications & enable an organization to standardize & simplify its quality control functions
Improved Information accuracy & decision making capability
Because of the ease of analysis of information of various different sectors of a organization and by ready to use comprehensive overview of the things in general ERP systems greatly help in decision making which becomes often tedious & time consuming other wise . Information accuracy also assures that the decision which are made are accurate enough & commercially viable
The Benefits of ERP are both direct as well as indirect. The direct benefits include better decision-making , faster response time to customer quires etc
The indirect benefits involve better corporate image , improved customer goodwill , customer satisfaction , & so on
The instances of ERP benefits are :
Reduction in lead-time
On time shipment
Reduction in cycle time
Better customer satisfaction
Improved supplier performance
Increased flexibility
Reduction in quality costs
Improved resource utility
Improved information accuracy & decision making capability
Reduction in lead time
The time elapsed between placing an order & receiving it is known as lead time . If a stock is not available on time problems like missing a delivery schedule , losing the customer goodwill due to delayed delivery or loosing the customer completely occur
In order to avoid this large buffer stock is maintained or a high reorder level is maintained this leads to high inventory costs .
ERP avoids this by maintaining & processing the individual lead times of different materials in a inventory which at times could run into thousands of different materials & a efficient system is established
On- Time Shipment
Customer specific products require a long time to deliver as against off the shelf products . ERP specifically closes this gap & yet maintains the cost & time advantage . With ERP businesses are not limited only to a single manufacturing method such as made to stock or made to order & without a major change in work place or plant layouts
Reduction in Cycle Time
Cycle time is the time between receipt of order & delivery of product . The cycle time & cost of production are high for a Made to order product as compared to off the shelf product .what erp does is that it reduces the cycle time of both the varieties of the goods . but the reduction in cycle time of a made to order product is high & significantly reduces the cost of manufacturing
Better Customer Satisfaction
Customer satisfaction means meeting or exceeding the customers requirement for product or services .
ERP systems have proved that they can produce goods at flexibility of
Made to order approach without loosing the cost & time benefits of made to order operations . means that each customer will get individual attention
& feature that he wants Also the introduction of web enabled ERP systems , the customers can place orders , track the status of order & make payment sitting at home .
Reduced quality costs
The quality costs are normally 20 % of the goods sold .Carefully planned Quality improvement activities not only improves quality , but lowers quality related costs
Quality Management Systems in ERP packages support bench marking & use of optimal product design , process engineering & quality assurance
Specification Control Systems in ERP packages , offer state of the art approach for documenting specifications & enable an organization to standardize & simplify its quality control functions
Improved Information accuracy & decision making capability
Because of the ease of analysis of information of various different sectors of a organization and by ready to use comprehensive overview of the things in general ERP systems greatly help in decision making which becomes often tedious & time consuming other wise . Information accuracy also assures that the decision which are made are accurate enough & commercially viable