Rising costs and competitiveness make cost reduction a top business driver behind most technology initiatives today. Given this reality, is it possible to use an ERP system to help manage costs?

The pressure to reduce costs is just as significant as the need to manage growth and improve customer service as the main business drivers of ERP selection strategies.

Not only are production costs rising, but the cost of quality, the cost of transportation and the cost of energy are becoming more and more challenging to the bottom line.

An ERP system that is properly matched to the needs of the company and improves overall production processes directly contributes to cost management.

Does Your ERP System Help Manage Costs?

Many manufacturers and distributors operating with legacy enterprise systems are advised to assess how their ERP system contributes to cost reduction does the solution help supervise costs of production, inventory management, shop floor operations and other areas?

When carefully selected and implemented, the right enterprise technology provides the visibility needed to control costs and enhance customer service.

Making improved visibility a priority when setting ERP requirements provides a framework for even business processes and allows coordination between different business functions.

Some of the key benefits of a successfully utilized ERP system include:

  • Better visibility of business processes across multiple functions and departments
  • Improved customer responsiveness
  • Reduction of inventory and improved inventory accuracy
  • Reductions of administrative and manufacturing operational costs
  • Improved manufacturing schedule compliance and complete on-time delivery
  • Reduced customer lead time and improved quality performance

Other key areas where an ERP system can help manage costs include supply chain optimization.  direct of a supply chain helps take waste and time delays out of the process. From ordering to warehousing to inventory control and shipping, costs are better managed with better control of the supply chain.