Limitations of Enterprise Resource Planning (ERP)

Enterprise Resource Planning (ERP) can be defined by the business process management system that allows an organization to use a system of integrated applications to manage tasks and functions related to technology, services, and human resources. Essentially, an ERP software combines all of the facets of a business operation in one place, including (but not limited to) product planning, development, manufacturing, sales, and marketing functions. 

Enterprise Resource Planning (ERP)

ERP systems are beneficial to manufacturers as they make simplify the process of information dissemination, data integration, and business planning within an enterprise. These types of systems have become essential for manufacturers big and small as they can help in overseeing production as well as help plant managers to make data-based decisions.

Although ERP systems have a multitude of benefits for manufacturers, there are also some limitations that can hold production facilities back instead of helping boost productivity and help them grow. Understanding these limitations is essential to choose which type of software will be the most beneficial for your manufacturing operations.

In this blog, we will explore some of the limitations associated with ERP systems and explore an alternative option that can help your manufacturing facility get to the next level of productivity. 

Limitations of Enterprise Resource Planning (ERP)

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

• Expensive System - One of the main limitations of Enterprise Resource Planning (ERP) systems is that they can be extremely costly. Not only does the actual software and implementation incur costs, but other requirements such as computer hardware, updated network equipment, and security software may incur additional costs. It is important to carefully evaluate the different options of ERP systems and other related systems to choose the one that will be the best fit for your organization in terms of features offered but also in terms of costs. 
• 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 smoothly, which is why proper training in ERP is imperative in order to make the system work appropriately. A substantial amount of companies attempt to save money by 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 and may lead to mishandling of the technology by employees resulting in the loss of valuable information.
• Degree of Customization - Another limitation of ERP systems comes from their ability to be customized to fit your business needs. The degree of customization available can be limited and usually depends on the brand of software chosen as some systems have more customization options than others. However, most ERP systems offer very little customization or will charge additional fees for the extra features requested. It is therefore important to consider your business needs and the standard features of ERP systems when considering them. 
• High Implementation Times - Implementing a new operating system can be a challenging task for any company. Depending on the complexity of the business operations, the total implementation and training time can take over a year. Implementation times and costs of ERP softwares are crucial to consider as the time required for the implementation may disturb the normal functionality of the organization and risk incurring a potential loss in business during that time. It is therefore important to consider the implementation time when evaluating different ERP or other softwares that require an implementation to ensure that you will have significant returns in profits once implemented. 
• Inter-connectivity of Departments - Although having inter-connectivity between various departments in an organization may seem like an asset, it can also pose disadvantages to the company. This is especially true if there are inefficiencies within one department as it will lead to inefficiencies in other departments. If one department is affected and becomes inefficient, it can affect the overall efficiency of the company. It is therefore important to choose a software that will optimize your company and improve its efficiency to avoid causing problems in multiple departments. 

Due to the limitations of ERP systems, many manufacturers benefit from integrating their ERP system to an Advanced Planning and Scheduling (APS) software. PlanetTogether APS is an essential tool for manufacturers looking to improve their efficiency and optimize their production.

PlanetTogether frees Joyce from all the mechanics. We run more efficiently, with more money to the bottom line. From an executive point of view, that’s one result that gives me a chance to relax and enjoy another cup of coffee.

DANA KING, V.P. INFORMATION SYSTEMS, DIEDRICH COFFEE

When ERP and APS systems work together, the APS system takes into account time and manufacturing limitations simultaneously by using mathematical algorithms to give long and short-term production plans. They are then used by the MRP to build out material requirement plans. Alternatively, some APS systems such as PlanetTogether have MRP embedded for an even more streamlined planning and analysis process.

Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With PlanetTogether APS you can:

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

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!