Understanding the nature of your business is very important. Production takes places in all kinds of business as well as non-business operations. For example, production in a hospital is related to the process of serving meals to the patients, performing surgeries, taking and reading X-rays, conducting physical therapy, cleaning rooms and receiving payments.
Supermarket production operations include ordering and pricing inventory, stocking the shelves, packaging and displaying products, and so on. Government issues permits and licenses, collect taxes, register voters, provide police and fire protection, and so on. Contractors construct, repair and demolish buildings, build highways and bridges, and landscape parks. Similarly banks grant loans, cash or issue cheques and handle deposits and withdrawals.
Production process vary greatly in complexity, production time and the amount of resources, information and planning needed and the number and type of machines and employees needed, and the number of employees and machine needed. The production of a car takes time and requires a variety of very expensive machines and high skilled employees, typing a letter on other hand is a short process using mainly a word processor.
Competition in the future places increased emphasis upon time as expected by speed, quality and global focus. Agility is the watchword. Manufacturers are measured by their ability to react quickly to sudden, when unpredictable change in customer demand for their products and services. To compete successfully in today’s business environment, requires an effective ERP system, which is a manufacturing business application, that is time and activity based and above all else, focused on their customer.
Manufacturers must respond quickly and effectively to customer demands. While agility is desirable, without an effective enterprise resource planning system it results in speed without purpose. The very heart of an enterprise manufacturing system centers on its integrated planning, business process and execution capabilities. Traditional closed-loop MRP concepts have long heralded the importance of effective planning system, because process understanding and timely executions.
Strategically effective planning results in improved inventory turns, productivity increase and improved return on investment. Tactically effective business processes provide improved customer satisfaction, reduced time to market and improved market share. Effective execution provides short cycle time, quality assurance, continuous improvement and quick response to process variability. All three elements contribute positively to the decision to install an enterprise-wide resource planning system.