Why a Manufacturing ERP System Delivers More Productivity Gains Than Industry 4.0 ‒ Whatever That Is

Posted by Mark Ellis on Thu, Nov 23, 2017

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Away from the hyped-up emerging ‘Industry 4.0’ technologies like robotics and 3D printing, today’s ERP systems offer a much more achievable way to boost manufacturing productivity.

If you work in manufacturing, you may have heard about Industry 4.0, the next wave of technologies expected to revolutionise production. This new ‒ and fairly loose ‒ umbrella term has been used to describe a host of maturing technologies, from 3D printing, artificial intelligence and robotics to cloud computing and the ‘Internet of Things’, a term used to describe the integrated networking of devices, vehicles, machinery and other items.

With much fanfare, Industry 4.0 has been predicted to dramatically boost manufacturing productivity, reduce waste, save supply chain time and allow businesses to respond more efficiently to customer demand. Sounds great, doesn’t it?

Bonus content - learn the fundamentals of productivity in this manual for scaling up your manufacturing business >>

Industry 4.0 ‒ all it’s cracked up to be?

The reality however, is a bit different. Genuine understanding of the benefits of Industry 4.0 remains vague. According to recent research by KPMG, the majority of UK manufacturers feel unsure about what Industry 4.0 means for their business, and how they can prepare for it on a practical level. And as manufacturers contend with the uncertainties caused by Brexit, it can seem a bit of a stretch to start making plans for robots and artificial intelligence.

“The reality is that many manufacturing businesses are currently struggling with day-to-day business,” says Charlie Simpson, Partner with the Global Strategy Group at KPMG in the UK. “So while many companies will be talking about Industry 4.0 in principle, their intent to invest and build a business case for it is probably going to be patchy at best.”
Given this uncertainty, how can manufacturers start to think realistically about innovating their processes ‒ aided by modernising their IT systems ‒ to boost manufacturing productivity?

For a start, there’s little point worrying about Industry 4.0 until your basic IT infrastructure is up to date. The reality is that IT systems in many manufacturing firms are both fragmented and outdated, often running on PCs that are several generations old. Yet despite this, research shows the industrial manufacturing sector is somewhat averse to investing in new technology.

According to a recent PWC survey, just 30% of senior executives in industrial manufacturing firms said they were planning to increase spending on IT in the subsequent year. Those that don’t are in danger of getting left behind ‒ while those that make targeted investments in their IT systems can boost efficiency and gain real competitive advantage.

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One question manufacturers can ask themselves is: are we using ERP ‒ or Enterprise Resource Planning ‒ software to streamline our processes? And if so, how up to date is it ‒ does it truly cover all the functions your manufacturing business needs?

Boost manufacturing productivity with modern ERP (are you overdue?)

ERP is essentially business process management software. It can automate what happens, and when it happens, for hundreds of processes across your manufacturing business. And it allows you to efficiently manage, integrate and visualise disparate functions ‒ including bills of materials, inventory and order management, accounting, sales, factory floor and customer relationship management.

ERP can capture data across your business, spot potential problems in advance, and become a central point of information for vital business decisions. And yet despite this, many manufacturers are either operating without ERP, or with fragmented and outdated systems, interspersed with spreadsheets and even printed documents in some instances.

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By choosing the latest generation of manufacturing-specific ERP software ‒ which has evolved with many years of industry best practices ‒ you can start to:

  • eradicate production delays
  • improve profit margin control
  • gain greater visibility over daily processes
  • streamline your finances
  • respond more efficiently and accurately to your customers

All of which means manufacturing productivity gains for your business, using no more than your existing resources.
There is no need to put the cart before the horse. Before you even think about emerging (and therefore risky and unproven) Industry 4.0 technologies, ask yourself whether your first step should be to review and modernise your IT infrastructure and ERP software to maximise the potential of your manufacturing business.

Get step-by-step guidance on achieving productivity gains with your factory's processes in our full manual >>

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Topics: Manufacturing