Cloud ERP Is Another ‘Smart’ Decision for Industrial Manufacturing Companies

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Many industrial manufacturing companies have already started the transition to smart factories, and are starting to streamline their systems. Smart factories are not only connected to the factory floor, but also to other parts of the business, such as sales, engineering and design, and service. This interconnectedness enables manufacturers to cope with disruption, reduce production delays, and utilize their resources more effectively. However, finding the best way to connect those systems has become essential and of course, finding the right ERP solution is an important facet of building that solution. In fact, nearly one-third of midmarket manufacturers (32%) are looking for ways to integrate their disparate systems, according to a 2023 report from Aberdeen Strategy & Research on Optimizing Cloud Data for Accessibility, Cost Savings, and Efficient ManufacturingOpens a new window , which mined insight from mid-market manufacturers.

Currently, many manufacturing leaders are planning ways to optimize their operations, expanding visibility and control to cope with disruptions and find ways to move their businesses forward, capitalizing on emerging opportunities be it new markets, business models, or regions. One way to support this is by adopting or moving to the latest ERP technology to take advantage of a single consistent view of their business, as well as industry best practices and intelligent process automation. Cloud ERP enables manufacturing companies to run efficiently—mitigating day-to-day disruptions and still continuously innovate.

Rapid Public Cloud ERP Implementation

With the ready-to-run solutions that GROW with SAP provides, a process that could take months is greatly reduced. At their core, smart factories revolve around the principles of ensuring on-time delivery and quality, maximizing productivity and profitability, and reducing cash to cash cycles. When implementing any IT system, midmarket manufacturing companies aim to achieve the best results while introducing minimal complexity. In other words, the simpler the transition, the less strain it places on different teams and departments.

Moving to SAP S/4HANA Cloud, public edition allows businesses to leverage the latest innovations to run their existing business and support growth into new markets with an expedited timeline. For manufacturing businesses with a small IT team, the move to Public Cloud ERP from an on-premises or legacy system doesn’t require a large IT staff to execute or maintain. In fact, the bulk of ERP management is offloaded to the software provider and its partners. This provides additional benefits as their ERP will always be up to date. It has continuous innovation baked right in.

For manufacturing leaders choosing a Cloud ERP, Grow with SAPOpens a new window provides additional services to support midmarket companies. It allows them to speed up their Public Cloud ERP implementation with proven tools and methods, activation services as a package, and expert support through the SAP partner network.  

Around the world, many industrial manufacturing companies have been moving forward with digitalization and smart factories at an incredible pace, but they are still looking for ways to continue to improve operations and become more resilient. In some cases, they may have multiple facilities, be rapidly expanding, or have teams based in different geographic regions. Public Cloud ERP can help bring all these entities together more seamlessly, improve visibility, and support a collaborative workflow.

To this end, a cloud ERP offers clear value by being able to share common data across organizational teams, among other key benefits. Not surprisingly, the Aberdeen Strategy & Research reportOpens a new window found that among best-in-class manufacturers, the top reasons to choose a cloud-based ERP solution are IT costs (31%), being able to collaborate across multiple locations (23%), and standardization into a single system for multiple entries.

5 Benefits of Grow with SAP for Smart Manufacturers
The faster a manufacturer integrates SAP S/4HANA Cloud, public edition, the sooner they can reap the benefits of optimized data usage, lower costs, and improved overall efficiency. Here are 5 ways the implementation of Grow with SAP empowers smart factories:  

1. Fortifying the Supply Chain: It has become evident that as manufacturing companies emerge from the residual impact of the pandemic, building a resilient supply chain capable of adapting to and coping with any future disruptions is essential. Implementing Grow with SAP enables predictive Material Requirements Planning (MRP) and demand-driven MRP, as well as integration into SAP business networks, and warehouse and transportation management which provides even more visibility into the supply chain.

2. Optimizing Operations: Deploying a ready-to-run cloud ERP solution provides valuable insight for making operations more effective. It can increase automation, optimize resources, reduce waste, and increase quality. Machine learning applications can inform lead times with demand-driven MRP as well as slow or non-moving stock in inventory management. Grow with SAP also enables multiple out-of-the-box manufacturing processes such as make-to-stock, make-to-order, configure-to-order, and engineer-to-order.

3. Managing Costs Protect Margins: Having more operational and financial visibility helps identify areas to improve efficiency and control costs. As midmarket companies confront narrow margins, being able to manage spending, protect profits, and optimize cash flow are top concerns. Grow with SAP helps by embedding quality management to reduce scrap and ensure consistency. In addition, there are installed maintenance management capabilities that maximize the availability of production equipment and integrated cash management features for an accurate, real-time view of a company’s cash position and forecast with end-to-end transparency.

4. Delivering New Innovations: Whether entering new markets locally or globally, adding new factory lines, implementing new processes, or launching new products and services, sustainability has become a central theme for midmarket businesses today. With SAP S/4HANA Cloud, public edition, midmarket companies have options like embedding Key Performance Indicators (KPIs) to increase sustainability and profitability, integrating new locations, or providing new offerings to customers such as combining products and services on one solution order.

5. Enable Intelligent Decisions: Data usage is possibly the biggest differentiator for industrial manufacturing companies. Grow with SAP allows decision makers to leverage end-to-end operational and financial insights across their entire company. Out of the box, there are valuable dashboards embedded with real-time analytics. Large volumes of data and KPIs are more efficiently condensed into granular reports to turn insights into action.

Takeaway

While many midmarket companies have started to recover, they want to be ready to be able to not only survive but thrive in the face of the next disruption—all the while moving their digitalization of the smart factory forward.

When asked about their top two drivers for implementing ERP in the cloud, mid-market manufacturers identified their top reasons as IT costs (31%), global workforce working in multiple time zones (27%) and collaboration needs for multiple locations (23%), according to the Aberdeen Strategy & Research reportOpens a new window . Other needs that cloud ERP fulfilled for these manufacturers included standardization into a single system for multiple entries (18%) and time to information (16%).

In an environment designed for continuous innovation, Grow with SAP enables businesses to move on from legacy, on-prem systems, as well as Excel-based systems, to a public cloud. It allows mid-size industrial manufacturing companies to optimize data usage, reduce costs, and empower scalability thanks to the advantages of a public cloud ERP. Grow with SAP further accelerates the implementation of SAP S/4HANA Cloud, public edition, along with activation services and expert assistance.

For industrial manufacturing businesses looking to implement a cloud-based ERP for their smart factory operations, Grow with SAPOpens a new window offers the support and services they need.

To learn more, click here.Opens a new window

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