By Marius Wessels
The contemporary manufacturing sector and landscape across the globe is ever evolving as the need for higher efficiency and productivity becomes crucial to organizations.
The integration of enterprise resource planning (ERP) systems with the Internet of Things (IoT) – and by extension Industrial Internet of Things (IIoT) – is increasingly becoming a key transformative solution.
IoT involves connecting several devices via the internet, creating a network that enables these different entities to communicate and exchange data in real-time. When these devices are seamlessly integrated with ERPs, which serve as comprehensive business management software, the prospects become infinite.
In this regard, the powerful combination of ERP and IoT allows manufacturers to harness maximum automation, real-time visibility, and data-driven decision-making while leveraging the immense capability of the network created by these innovative technologies.
This is why ERP experts believe that the future of manufacturing lies in deploying IoT to enhance ERP systems. This is an elemental aspect in optimizing processes and driving operational excellence.
Darren Edwards, the head of product operations at SYSPRO points out that as more manufacturers embark on digital transformation initiatives to future-proof their operations, the need to manage vast volumes of data meaningfully, for the organization to become data-driven is becoming vital.
“Manufacturers are [therefore] challenged to tackle inadequate reporting and analysis capabilities, inefficient decision-making processes due to siloed data, and difficulties in measuring the return on investment; all while enhancing their ability to respond to changing market trends quickly and accurately,” Edwards says. “Analytics embedded into ERP can be used to collect data to monitor the production process in real-time, all in the same environment where work is performed. As a result, manufacturers can consolidate millions of data points into structured insights that are easy to understand and act upon.”
For instance, real-time updates on manufacturing processes enable managers to take quick action and keep production on track. Through analyzing data from sensors embedded in machinery, manufacturers can predict when a machine will require maintenance and schedule downtime accordingly.
This reduces unexpected breakdowns and associated costs. Analyzing data from sensors and cameras, also helps manufacturers monitor product quality in real-time, identify defects, and take corrective action before defective products leave the production line.
Integration of IoT in a manufacturing organization’s ERP comes with immense benefits that not only ensure efficiency and effectiveness in the applicable organizational processes but also optimize its executive and administrative functions.
The convergence of IoT devices and ERP systems facilitates the easy gathering of data, analysis, and presentation of this information in real-time, which empowers enterprises to efficiently oversee their assets, production lines, and supply chains.
Through effective tracking and analyzing of vast volumes of data, organizations can promptly pinpoint inefficiencies or potential problems within their operations, thereby bolstering their decision-making capabilities.
An illustrative example lies in the application of IoT-driven predictive maintenance techniques, which allow businesses to receive warnings in advance about equipment failures. When these industries are fed with this information, they can easily schedule maintenance activities, resulting in minimized downtime and enhanced productivity.
Intertwining ERPs with IoT systems also enables manufacturers to gain unparalleled visibility and traceability in their operations. Every aspect of the manufacturing process becomes trackable and measurable through the connection of machines, sensors, and other IoT devices to the ERP infrastructure.
With that IoT-enabled ERPs help the manufacturers achieve real-time insights into production status, machine performance, inventory levels, and more. This increased visibility allows the organization to proactively identify bottlenecks, streamline workflows, and enhance overall efficiency.
Furthermore, the integration of IoT with ERPs empowers manufacturers with predictive maintenance capabilities, resulting in significant cost savings. Leveraging sensor data from connected devices, ERPs can monitor equipment health in real-time, detecting anomalies and predicting maintenance requirements.
This shift from the reactive to proactive maintenance strategies that are commonplace reduces unplanned downtime and associated costs as predictive maintenance powered by IoT and ERPs ensures that equipment problems are addressed before they escalate, leading to significant cost savings and improved overall equipment effectiveness.
In addition, the merging of ERPs and IoT systems also revolutionizes supply chain management. The real-time data captured from IoT devices throughout the supply chain enables manufacturers to achieve greater visibility and traceability, facilitating proactive decision-making.
Notably, manufacturers can monitor inventory levels, track shipments, and gain insights into demand patterns. This data-driven approach enhances supply chain efficiency, reduces stockouts, minimizes carrying costs, and improves customer satisfaction.
“Using Cloud ERP, you can manage all supplier and distribution channels in one cohesive system with visibility across your entire network. Companies can create better transparency by working with suppliers to gain information about their next-tier suppliers and their value chains,” says Paulo De Matos, the Chief Product Officer at SYSPRO. “A scalable ERP system gives you the choice and flexibility to engage on any device or platform. This enables businesses to manage software costs as operational or capital expenses dependent on unique business requirements and budgets.”
Another key benefit of integrating IoT in ERPs is that it can leverage data to gauge the business’s future prospects. The continuous stream of real-time data from IoT devices combined with the analytical power of ERPs empowers manufacturers to identify trends, anticipate demand fluctuations, and make agile business decisions.
When such an organization leverages the data generated by IoT devices and integrates it into its ERPs, manufacturers can enhance their forecasting accuracy, optimize production planning, and respond swiftly to market changes.
Data is automatically transmitted to the applicable termini, eliminating the need for human input and cutting operational costs. Essentially, the future of manufacturing lies within the seamless integration of ERPs with IoT systems as is demonstrated by today’s rapidly evolving manufacturing terrain, where the incorporation of IoTs into ERPs is proving to be a game-changer that brings out the effectiveness and usefulness of these two powerful tools.
With them, organizations can unlock a new level of automation, real-time visibility, and data-driven decision-making, all of which are a requirement for enhanced industrial and manufacturing productivity.
The key to harnessing the agility of ERPs lies in data extraction and management, which is where smart technology comes in. Chatbots, based on AI technology, is a great way to automate intelligent data sourcing, according to Jaco Maritz, the CEO of SYSPRO.
“These tools retrieve business-relevant insights from their environments, such as through interactions with your customers, to inform decision-making around functions like marketing, and sales,” Maritz says. “Beyond this, chatbots free up crucial human resources to answer customer queries and analyze their interactions to predict future needs for a better client experience.”
He adds: “They also assist internal business users on time-intensive tasks like stock lookups or ordering status, creating efficiencies that ultimately help improve productivity and revenue.”
Edwards similarly notes that for manufacturers, use cases in this scenario are many and far-reaching. “Data can be harnessed from production lines, suppliers, and customers to identify trends, patterns, and anomalies resulting in improved quality, reduced waste, and optimized production processes,” he says.
(Marius Wessels is the Manager for Professional Services at SYSPRO Africa).