Home | ERP News  | ERP reduces cycle time, improves efficiency


ERP reduces cycle time, improves efficiency

Among the other benefits that eresource ERP can bring, reduction of cycle time is an important an aspect. Before getting to know the benefits of reduction in cycle time, it is better to understand what cycle time is meant. Cycle time is the time between placement of the order and delivery of the product.

At one end of the manufacturing spectrum is the make-to-order operation where the cycle time and cost of production are high. This is because in a make-to-order situation the manufacturer starts making the product or designing the product only after receiving the order. The manufacturer will procure the materials and components required for production only after getting the order. On the other end of the manufacturing operations is the make-to-stock approach, where the products are manufactured and kept in the finished goods inventory before the order is placed.

In both cases the cycle time can be reduced by the ERP systems, but the reduction will be more in the case of make-to-order systems. In the case of make-to-stock, the items are already manufactured and kept in warehouses or with distributors, for sales. Here the cycle time is reduced not in the shop floor, but during the order fulfillment. In the earlier days, even for the made-to-stock items, the cycle time used to be high. This is because the process was manual and if computerized, was not integrated.

Here is a typical example of old working system. Suppose a customer places an order. The order entry clerk has to check whether the ordered product is available in the warehouse nearest to the customer. If it is not available there, then he will have to check whether it is available in other warehouses or with any of the distributors. Then he will have to process the order, inform the concerned warehouse or distributor to ship the item and then inform the finance department to raise the invoice and so on.

All these used to take time, days and sometimes week. But with eresource ERP system, as soon as the order is entered into the system, the system checks the availability of the items. If it is not available at the warehouse closest to the customer, then the warehouse that is closer and which has the item in stock is identified. The warehouse is informed about the order and the shipment details are sent t the distribution module, which will perform the necessary tasks like packaging, picking and so on, so that the goods are delivered on-time.

The finance module is also alerted about the order so that they can raise the invoice. All these actions are triggered by the click of a button by the order entry clerk. Since all the data, updated to the minute, is available in the centralized database and since all the procedures are automated, almost all these activities are done without human intervention. This efficiency of the eresource ERP system helps in reducing the cycle time.

eresource ERP system has proved that it can produce goods at the flexibility of make-to-order approach without losing the cost and time benefits of made-to-order operations. This means that the customer will get individual attention and features that they want without spending more money or waiting for long periods. With t web enabled eresource ERP system, customers can place the order, track the status of the order and make the payment sitting at home.