Companies in the manufacturing and distribution domain often adopt ERP systems to standardize their business processes. A primary reason for using standardization is to enable interoperability between various business processes and systems. Among its many benefits, standardized business processes in any enterprise help reduce human errors and promote efficiency.
This blog will explain how ERP standardization works and benefits organizations.
What is ERP Standardization?
ERP standardization is the process of enabling any enterprise to follow the best practices and streamline its operations. For instance, standardized workflows facilitate automation, reducing manual labor and human errors.
Primarily, there are three types of standards in any enterprise, namely:
- Technical standards specify product specifications and dimensions, system performance requirements, and material testing methods.
- Process standards define the best practices and procedures that organizations can adopt to achieve a consistent workflow.
- Management standards develop the framework to establish effective business processes and systems for specific objectives.
In the next section, let’s discuss some common misconceptions about ERP standardization.
Misconzeptions About ERP Standardization
Among the common misconceptions about ERP tools, organizations believe they need to modify existing operations to accommodate the new system. While most organizations want to improve their operations, they do not want to start from scratch by discarding their existing process. Another misconception is that standardized ERP creates “rigid” organizations that cannot adapt to changing market conditions and customer needs.
None of these is true. Customizable ERP solutions do not force enterprises to implement unknown procedures. Instead, implement the best practices consistently in their processes. Besides, ERP solutions can be customized to fit specific business requirements with more customizations to accommodate business growth. Among the many benefits, ERP systems enable real-time visibility and automation without changing the workflow.
ERP standardization can benefit process improvement while reducing associated labor and process costs. Most popular ERP vendors deliver functionalities enabling organizations to align their ERP implementation with their business needs.
In the next section, let’s discuss the 10 ways organizations can ensure error-free operations with ERP.
10 Ways of Standardizing Processes with ERP Software
In today’s fast-changing business environment, organizations can achieve error-free operations in ERP. Here are the 10 ways in which they can achieve ERP standardization:
1. Centralized Data Management
One of the major obstacles to standardized processes in any organization is the availability of inconsistent or duplicate data. ERP systems integrate multiple data sources and combine disparate data (from various sources) into a unified system using centralized data storage and management.
2. Standardized Workflows
As an enterprise-level solution, ERP enables organizations to create standardized workflows across business functions. This means every business department adopts a consistent approach, thus eliminating errors arising from ad-hoc approaches. Additionally, predefined standardized workflows enable every employee to realize their responsibility and perform their assigned task on time.
3. Standard Operating Procedures (SOPs)
Through ERP systems, organizations now have a reliable platform for sharing SOPs. It enables process documentation as a reference point for employees across various departments. This can help minimize any unambiguity or lack of understanding, which can otherwise lead to human errors. Besides, process documentation is now easily accessible for employees to read and follow the standard procedures.
4. Data Validation
As mentioned before, valid and accurate data is crucial for improving accuracy with ERP systems. On their part, ERP systems have automated the data validation process to ensure accurate and high-quality data. ERP systems can effectively detect problems like incorrect data formats or missing fields in the initial phase using predefined rules and validation. This ensures that invalid data is not transmitted to later processes and that errors are resolved earlier.
5. Operational Visibility
ERP systems provide organizations with complete visibility into their daily business operations. ERP systems can pinpoint any process bottleneck through effective reporting and analytics and analyze every performance metric. Business executives and decision-makers can proactively address process-related issues with these timely insights. Corrective actions effectively mean lesser human errors in the long run.
6. Quality Control
Most ERP systems have an in-built module for quality control and compliance management. These modules are designed to perform continuous quality checks and enable adherence to quality standards and regulations. By integrating quality checks into their standard business processes, organizations can successfully detect and resolve quality issues on time. Some of the quality checks in manufacturing include automated inspections to check if manufactured products adhere to product specifications and quality standards.
7. Inventory Management
ERP systems provide real-time visibility into inventory stocks. It can standardize inventory management by automatically reordering replenished stock items and optimizing order management. Automated inventory management enables manufacturing companies to prevent manual errors or situations like overstocking, understocking, and inaccurate inventory counts.
8. Supplier Management
Effective supplier management is necessary for modern enterprises to streamline the procurement process. With its in-built supplier management module, ERP solutions can standardize the supplier or vendor selection process along with the final order price and performance criteria. This streamlined process enables organizations to avoid manual errors such as incorrect orders, delivery delays, and poor vendor service.
9. Compliance with Regulations
Enterprises must comply with many industry regulations and standards to avoid fines and penalties. Some popular regulations include GDPR (for data privacy) and the Fair Labor Standards (FLS). On their part, ERP systems enable organizations to adhere to industry regulations and standard practices. They can integrate compliance-related checks into business processes. Additionally, they can reduce compliance violations by automating and documenting the compliance check process.
10. Continuous Improvement
ERP solutions provide the necessary tools to improve business processes and procedures continuously. ERP tools can quickly identify process bottlenecks through continuous data analysis and recommend corrective actions. Besides, ERP systems enable companies to track their key performance indicators (KPIs), which can help in identifying areas of improvement and reducing process-related errors. Based on historical data, organizations can learn from previous mistakes and ensure they do not occur repeatedly.
Conclusion
To summarize, we have learned how process standardization is among the major ERP benefits for error prevention in modern enterprises. We have also addressed some of the common misconceptions about ERP solutions.
Organizations also need the expertise of an experienced ERP solution provider like Praxis Info Solutions for a seamless ERP implementation. Praxis is an award-winning solution partner for various SAP solutions, including SAP Business One. Our team of SAP professionals can evaluate your existing processes and recommend the best way to standardize them for your business efficiency. Here’s a recent blog about the various types of ERP deployments.
We could be the right one if you are looking for a reliable ERP solution provider. Contact us today.