The role of ERP in the Smart Factory

Here are some of the ways in which ERP systems can help enable truly smart factories.
19 May 2022 by
The role of ERP in the Smart Factory
Smart Information Technologies Limited, Barry Bullen

The manufacturing industry is in an exciting state of flux and evolution. A confluence of technologies – cloud computing, the Industrial Internet of Things (IIoT), artificial intelligence, machine learning and more – are powering truly smart factories. But where does Enterprise Resource Planning (ERP) software fit in? After all, it is used across a multitude of different business sectors. What is its specific significance in the smart factory?


Ultimately, ERP systems aim to transform organisations’ workflows – and this is precisely the goal of the smart factory too. More automation, better integration between business functions, smarter business intelligence – the goals of both ERP and the smart factory are remarkably similar.


Here are some of the ways in which ERP systems can help enable truly smart factories.


Powering automation


Smart factories incorporate as much automation as possible. ERP systems enable this by integrating data from multiple different business functions and departments, which can then coordinate tasks between those functions. In a smart factory, this could mean enabling greater automation along the production line, or between the production line and other functions. In the warehouse, for example, this could mean automatically making space when production is nearly completed. Or, on the procurement side, it could mean automatically reordering raw materials when they are shortly to be needed. 


Powering decision-making


However automated a smart factory is, human decisions still need to be made – and the greater the breadth and accuracy of the business intelligence those decisions are based on, the better. Because ERP systems consolidate information from across the business – not just the factory floor – they enable far richer and more meaningful business intelligence – and they make it available instantly. The result is more informed and intelligent business decisions. 


Powering customer experience


Smart factories are ultimately in the business of creating products – which are then used or consumed by customers. However smart the factory floor, if those customers are not satisfied, then the business will not have a long-term future. But the benefits outlined above – greater automation, and better strategic decision-making – ultimately help to enhance the customer experience. ERP systems can even help make customer care more thoughtful and engaged, by collecting and analysing information on how products are performing, or scheduling automatic customer follow-ups.


Additionally, ERP systems integrate smoothly with the various technologies which enable smart manufacturing actually on the factory floor. IIoT, big data and analytics platforms, intelligence security systems, blockchain – myriad different innovative and emerging technologies can be enhanced and made to work better with others with the help of a single centralised ERP system. In a sense, ERP provides the anchor from which all of those other smart factory technologies can flow.


Not all ERP platforms can enable the smart factory of the future. To do so, the ERP system needs to be able to integrate with these next-generation technologies, and to capture, analyse and transform the information needed to carry out automated production, intelligent equipment maintenance and more.


If you are unsure whether a legacy ERP platform is suitable for powering the smart factory of the future – or if you want advice on a brand-new approach to ERP and the smart factory – get in touch with us today.


The role of ERP in the Smart Factory
Smart Information Technologies Limited, Barry Bullen 19 May 2022
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