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The Datacor Blog

ERP 101: Introduction to ERP Systems for Beginners in 2020

September 14, 2020 by Admin


Have you heard of the term “ERP”? Not exactly sure what it is or why it’s important to process manufacturers and chemical distributors? Maybe you’ve done some research and found it overwhelming and a little confusing.

If so, you’re not alone. As a leading developer and provider of enterprise resource planning (ERP) software solutions, we are often asked to explain ERP solutions and their benefits, which we’ll do in this post. Here’s what we’ll cover:

What Is ERP?

ERP stands for “enterprise resource planning.” ERP software is a business management solution designed to help companies manage different key components of their business, including accounting, customer relationship management (CRM) and procurement. The main purpose of an ERP solution is to bring all facets of an operation into a single, centralized database and to streamline processes through a user-friendly application.

When implemented correctly, ERP will improve workflow, automate business processes, reduce redundancies and give everyone in the organization access to data that is accurate, current and complete. However, for chemical and process manufacturers, it’s important to choose a system designed to meet the industry’s specific needs. Many systems do not come with out-of-the-box manufacturing features, and adding these as custom modules later on can be costly and time-consuming.

It’s also important to choose an integrated ERP system, so that all modules and features are designed to communicate seamlessly with one another. To learn more about the benefits of integrated ERP software, read our complete guide.

ERP software features

Generic ERP software systems tend to offer these popular features:

  • Accounting and financial management
  • Customer relationship management (CRM)
  • Business intelligence (BI) and artificial intelligence (AI)
  • Human resources (HR)
  • Demand planning and forecasting
  • Inventory management
  • Supply chain management
  • Project management

When you choose an industry-specific ERP system, you get access to additional capabilities, which may include:

  • Manufacturing
  • Wireless barcoding
  • Price change management
  • Computerized maintenance management system (CMMS)
  • Automatic unit-of-measure conversions
  • Quality management
  • Lab, recipe and formula management

Benefits of ERP

Now that you know what an ERP system is, you’re probably asking yourself: “Why should I use one of these complex, expensive systems to run my company?” While it’s true ERP solutions are not cheap, the benefits they provide far outweigh the initial investment in terms of both time and effort. Let’s take a closer look at five benefits an ERP software solution can bring:

1. Single, unified source of data

Managing information is a big challenge for many businesses today. Tracking data across multiple systems often leads to conflicts, duplicates and errors. One huge advantage of using an integrated ERP solution to run your business is that all of your data is consolidated within a single platform. This improves the accuracy, consistency and security of your business data.

When data is centralized and consistent, it’s easier for departments and teams to communicate and collaborate. This also enables them to do their jobs and access important information without having to bother one another. Sales, marketing, customer service, operations and other departments can share inventory, production, sales and customer data, while team and company leaders get a clear snapshot of performance and financial information.

The right ERP system allows everyone in the company to access the same information while updating data in real time. Choosing integrated software with features such as wireless barcoding enables up-to-the minute inventory and sales information, keeping staff on the same page to achieve company goals.

2. More informed decision-making

ERP software designed for chemical and process manufacturers provides a comprehensive view of every aspect of your business. What’s more, these solutions can easily generate useful reports and analytics about your organization in real time. Knowing precisely where you stand enables more confident decision-making at all levels of your company — from warehouse staff to the C-suite.

Consolidating data also saves time and effort; without an integrated ERP system, employees and leaders must collect sales, reporting, safety and financial information manually from each department. Not only is this inefficient, it may result in duplicated efforts and information, cluttering internal data.

3. Regulatory compliance

A lesser-known benefit of ERP software for the chemical and process manufacturing industry is that it helps you stay compliant with various government regulations, such as the Globally Harmonized System (GHS). Using integrated compliance data combined with built-in and customizable reports, these systems will keep you compliant without adding non-revenue tasks to your workload.

In addition, industry-specific software is automatically updated on current regulatory and reporting standards — ensuring compliance with no extra effort. When an order is placed, the system automatically creates documents such as safety data sheets (SDSs), certificates of analysis (COAs) and allergen, non-GMO and Kosher certificates; labels everything properly; catalogs reporting data; and sends documentation directly to customers. It can also help simplify the complex FDA software validation process.

4. Cost-savings

Having a single, unified system with accurate, real-time information can greatly reduce overhead costs for your business. For instance, you can save money by not having to pay multiple application-licensing fees. This will also reduce training requirements and costs for end users, since they will only need to learn one system versus multiple applications.

As a process manufacturer and/or chemical distributor, you deal with inventory management and production scheduling. An industry-specific ERP solution comes with tools to reduce inventory and optimize production, improving your profitability and reducing overages.

Specialized ERP software even offers cost and profitability tracking functionality for recipes and formulas. Calculating costs at the ingredient, storage, transportation and unit-of-measure levels while tracking expiration dates and lot numbers allows you to adjust on the fly while keeping financial information accurate and up-to-date.

5. Improved efficiency and productivity

ERP software streamlines business processes, making it easier and more efficient for you to run your business. It will eliminate repetitive tasks and reduce manual data entry. This improves productivity, allowing your team to focus their time and effort on more important, revenue-generating activities.

What’s more, ERP systems for the chemical and process manufacturing industry automates common business functions, such as making conversions and entering inventory. This not only boosts efficiency by eliminating the need to enter and calculate information, it also reduces the risk of human error, improving the accuracy and integrity of your data.

Choose an industry-specific ERP system

ERP software is a complete business management solution that integrates every department of your process manufacturing or chemical distribution operations — increasing productivity and enabling more informed decision-making. It combines all of your business data into one centralized system, so your team always has access to current, complete information.

However, it’s important to choose an ERP system that’s designed specifically for the chemical and process manufacturing industry to ensure you have all the tools and functionality you need. Using generic ERP software can actually be more time-consuming and expensive in the long run, since specialized functions must be custom-designed or purchased from a third party. You can learn more about industry-specific versus generic ERP software in this post.

Datacor ERP has been serving chemical and process manufacturers and distributors for 30 years, and offers all the tools you need to improve productivity, streamline operations and run your business more effectively. If you have any questions or want to see how ERP works in action, contact us today or sign up for a demo!


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Editor's note: This post was originally published in February 2017 and has been updated for comprehensiveness.

Topics: ERP, Best Practices, Software, Benefits of ERP


Written by Admin

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