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How to Boost Production with Process Optimization

Reading Time: 4 Minutes 19.08.2021 Currents & Trends

This is how the ERP system supports you in optimising your processes

Digital transformation and process optimization are closely knit. In order for both to be effective, you need to implement measures that go beyond the technical aspects.

As the digital transformation proceeds, process optimization is quickly gaining more importance. Furthermore, the pandemic has proven the role of seamless digital processes essential to the maintenance of business operations.

In the recent survey "Process Optimization in Manufacturing: The Key to Best-in-Class Success", industry analyst Aberdeen has identified five essential drivers for process optimization:

  • increasing pace of innovation / changing business models (34% of the European manufacturers interviewed)
  • a clear differentiation from competitors (34%)
  • need to reduce costs (31%)
  • improve ability / flexibility to respond to business demands (30%)
  • need to shift manufacturing and sourcing due to supply changes (30%)
How can an ERP system promote process optimization?

Modern ERP providers support companies who have recognized the importance of process optimization in many ways. They can be divided into three categories: technological measures, organizational measures, and procedural measures.

The latter begin with the identification of potential for optimization. Process mining is key here. This method visualizes the actual daily processes in these systems and therefore in the company, and identifies gaps in the process landscape that need to be closed.

An ERP solution helps to integrate various systems, to standardize and harmonize processes, and to increase data quality and the degree of process automation.

The role of artificial intelligence (AI) is becoming increasingly important in this respect. The trend survey "Mehrwerte schaffen für den Mittelstand durch ERP-Software" (available only in German, roughly: How to create added value for SMEs using ERP software) by teknowlogy | PAC and proALPHA revealed that 61% of the interviewed companies see great potential in AI to improve processes. This covers the whole range from smart support in data input through to the automation of repetitive tasks.

Since process quality also strongly depends on the employees themselves, an innovative ERP system also provides integrated training that does not only explain the functions and underlying processes, but also gives best practice examples.

A number of tools for modeling and administrating are available to support the introduction of new processes, for example on the basis of best practices. To this end, proALPHA works with the BIC Cloud BPM Suite by GBTEC, which can be used directly via the ERP software. This ensures that the processes are perfectly mapped in the ERP solution.


Examples of ERP-aided process optimization

A ground-breaking ERP solution offers a great functional scope that directly supports businesses in optimizing their process landscape. It also helps indirectly as it supports technologies like the enterprise service bus and retrofitting. Some practical examples:

A typical problem for especially medium-sized enterprises is the fact that plant data collection (PDC) and time and attendance (TNA) are separate systems that are not connected with each other, therefore requiring the double maintenance of identical data. If the plant and time data are coupled to an ERP system like proALPHA, however, the master data become the "single source of truth" and are immediately available wherever they are needed.

Employees in purchasing rely on current engineering data to place orders early on. Ideally, the ERP and CAD system are directly integrated. Purchasers then have direct access to released bills of materials and drawings, so that they can take action in good time.

Heterogeneous IT landscapes with various technologies and numerous interfaces are high-maintenance and slow down business processes. To standardize and accelerate electronic information flow, more and more companies are relying on service-oriented architecture like an enterprise service bus (ESB) in connection with a modern ERP solution.

Older machines and plants often don't have any modern communication interfaces. There's a simple solution to this: retrofitting. A mini computer like a Raspberry Pi that is interposed between the machine and the ERP solution allows both sides to communicate with each other, for example in order to exchange commands for production.

How process optimization provides strategic support

The authors of the aforementioned survey by Aberdeen have also quantified the strategic benefits the best-in-class European manufacturing companies have achieved after the optimization of their processes. They were able to:

  • generate 31% more new product introductions that meet production targets
  • realize a 2.4 times greater year-on-year decrease in production downtime
  • see a 1.4 times greater year-on-year decrease in time to decision
  • report 37% more products meeting quality targets upon design release
  • experience a 34% increase in year-on-year overall equipment effectiveness (OEE)

In brief: process optimization pays off, provided that the measures do not only cover technological but also organizational aspects down to the user level. A modern ERP solution like proALPHA offers extensive functionalities that meet the requirements of all divisions and ensures that the business processes are embedded in the corporate process landscape fully digitally and without any interruptions. The benefits are obvious: reduced costs, higher quality, increased efficiency and productivity among employees – these are the key factors to a company's success.

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