Why Manufacturing Will Leave ERP in the Dust on the Factory Floor

No market segment seemed more suited to enterprise resource planning (ERP) use than manufacturing.

The processes were highly structured, repetitive, and identical in this assembly-line world.

Stamp, cut, press, stamp, cut, press… went the never-ending cycle of production so perfectly suited to the rigors of ERP or so everyone thought.

But manufacturing is a business as much as it is a producer and as such it needs more than software that can rinse and repeat.

And so it was that manufacturers began to tack on other software, such as material requirements planning (MRP), to add a little length to ERP’s shortcomings.

However, MRP could only cobble on a handle to manage raw materials and a platform on which to pile finished goods ready for delivery. Still more software was needed to actually connect with the customer such as customer relationship management (CRM). Meanwhile, business intelligence (BI) was often added to help pry open ERP silos and make information available to others inside the company.

The resulting haphazard collection of software grew larger when legacy systems, acquired systems, layered fixes, and, yes, even more ERP systems and their many upgrades and customizations were added to the mix.

The result was a costly mess that really didn’t even help manufacturing all that much.

Still, manufacturers continue to hold onto ERP mostly because, for the moment at least, nothing better has come available to manage the stamp, cut and press end of things.

Until now…

The best way for most manufacturers to make this set-up work now is to turn to BPM, ECM and Case Management.

But there’s another reason to begin using those three technologies: there is a disruptive force rising in manufacturing that will radically change the whole concept of mass, assembly line production. And without the stamp, cut and press to worry about, ERP will lose its footing in the sector entirely.

However, BPM, ECM, and Case Management will move front and center. It makes sense then to put those technologies in play now.

The disruptive force of which I speak, and for which BPM, ECM, and Case Management will likely become essential, is additive manufacturing (AM).

Subtractive manufacturing, i.e. the cutting away of raw material to form the desired object shape, is already shifting to additive manufacturing, i.e. adding thin layers of materials to create the desired form. To those outside manufacturing, additive manufacturing is known simply as 3D printing.

In the simplest of terms it means manufacturing is shifting from mass production to customized, on-demand production.

But this shift in how manufacturing is done is no futuristic maybe.

It’s already underway.

A 2012 Wohlers Associates report finds that the compound annual growth rate (CAGR) of additive manufacturing was 29.4% in 2011. For the industry’s 24-year history the CAGR is 26.4%. According to that same report, the industry is “expected to continue strong double-digit growth over the next several years.

By 2015, Wohlers Associates believes that the sale of AM products and services will reach $3.7 billion worldwide, and by 2019, surpass the $6.5 billion mark.”

That’s not to say, of course, that assembly line mass production will die out completely anytime soon, if ever.

But even the aspect that remains will have to change drastically to compete with additive manufacturers and the rise in customer expectations that their product flexibility and speed in delivery will create.

The old standardized processes will not serve in such a marketplace.

What all this means is that manufacturers will likely leave ERP in the dust on the factory floor not because they finally found a better replacement but because manufacturing itself is changing.

The far more affordable and flexible BPM, ECM and Case Management are simply better suited to handle the new non-standardized world of manufacturing.