Limitations of Enterprise Resource Planning (ERP)

4/11/19 10:00 AM

What exactly is enterprise resource planning and what are some of the limitations within the software? Enterprise Resource Planning (ERP) is a computerized software that enables manufacturers to have thorough insight and visibility into their operation. The software makes easy information dissemination, data integration, and business planning within an enterprise, which is extremely beneficial to manufacturers that are seeking to boost profits and cut costs within their manufacturing operation.

Limitations of Enterprise Resource Planning (ERP)

ERP is a necessity for manufacturers, large and small, and can aid in overseeing production as well as helping plant managers make decisions pertaining to their manufacturing operation.

With all of the benefits associated with Enterprise Resource Planning, there are also various limitations within the software that can hold production facilities back instead of helping boost them forward. Understanding these limitations will aid in the decision making process of choosing what forms of software are the most beneficial for your manufacturing operation and what you are in need of. Therefore, here are some of the limitations of ERP software.

Limitations of Enterprise Resource Planning (ERP)

The various limitations of enterprise resource planning (ERP) software include the following:

  • Training Inefficiency - Skills, experience, manpower, and optimum utilization of resources are key within a manufacturing operation. Without these factors, it is difficult to have your operation run efficiently and smooth, which is why a proper training in ERP is imperative in order to make the system work appropriately. A substantial amount of companies attempt to save money through not providing enough expenses for enterprise resource planning training for employees. This will result in inadequate cognizance of the particular Enterprise Resource Planning vendor package being utilized. Inadequate training may lead to mishandling of the technology by employees, which results in the loss of valuable information.
  • Expensive System - Enterprise Resource Planning (ERP) is a costly software alone, and setting up the software as well can be extremely costly as well. Acquisition is dependent upon the scope of implementation, complexity of the departments and ERP vendors. Packaged ERP software can cost up to a few million dollars. Besides ERP software, computer hardware, updated network equipment and security software are also necessary for implementation of ERP software.
  • Degree of Customization - The customization of ERP setup is limited and it may engross the changing of the entirety of the ERP software foundation. Flexibility of the setup is entirely dependent on the brand of software being utilized. Some brands even provide a provision of extended customization and flexibility, which makes them more convenient to utilized when being compared to others.
  • High Implementation Times - Implementation times and costs of softwares such as ERP are incredibly important to consider when purchasing the software. Installation and training time may disturb the functionality of the organization and could impose a huge risk of loss of potential business in that particular period. Complete installation could take up to a year, depending on the various modules that have to be installed. This time is worth spending only if the new setup gives significant profit returns among time and money.
  • Interconnectivity of Departments - Interconnectivity among various departments within a manufacturing operation is both beneficial and disadvantageous. A chain is as strong as its weakest link, and with the implementation of ERP, inefficiency within one department will lead to inefficiency within the others. If one department is affected and become inefficiency, it may affect the efficiency of other departments.

A software that can be implemented with Enterprise Resource Planning (ERP) and fills in the gaps where this software lacks is PlanetTogether’s Advanced Planning and Scheduling Software (APS). Advanced Planning and Scheduling (APS) is beneficial to manufacturing operations that are seeking to take their production up a notch and reduce waste, reduce cost, and significantly boost profits within their manufacturing operation. Advanced Planning and Scheduling software (APS) has become a necessity for manufacturing operations around the globe and has led to a substantial increase in productivity within their operations.

Advanced Planning and Scheduling Software (APS)

Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.

  • Create optimized schedules balancing production efficiency and delivery performance
  • Maximize output on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to capacity
  • Enable scenario data-driven decision making

Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.

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Topics: ERP System

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