Reasons for the Growth of ERP

From industry demands to drawbacks of MRP II and other products, there are various reasons for growth of ERP. Few of them are:

1.     Integrate financial information: As the CEO tries to understand the company's overall performance; he may find many different versions of the truth. ERP creates a single version of the truth that cannot be questioned because everyone is using the same system.

2.     Integrate customer order information: ERP systems can become the place where the customer order lives from the time a customer service representative receives it until the loading dock ships the merchandise and finance sends an invoice. By having this information in one software system companies can keep track of orders more easily, and coordinate manufacturing, inventory and shipping among many different locations simultaneously.

3.     Standardise and speed up manufacturing processes : Manufacturing companies -especially those with an appetite for mergers and acquisitions—often find that multiple business units across the company make the same transaction / recording / report using different methods and computer systems. ERP systems come with standard methods for automating some of the steps of a manufacturing process.

4.     Reduce inventory: ERP helps the manufacturing process flow more smoothly, and it improves visibility of the order fulfilment process inside the company. That can lead to reduced inventories of the materials used to make products (work-in-progress inventory), and it can help users better plan deliveries to customers, reducing the finished goods inventory at the warehouses and shipping docks.

5.     Standardise HR information: Especially in companies with multiple business units, HR may not have a unified, simple method for tracking employees' time and communicating with them about benefits and services. ERP can fix that.

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