The Tradeoffs of ERP Implementation

March 21, 2018 · 6 minutes read

Later, the invention of PC made life to some degree simple for organizations. Records being put away in spreadsheets, and with the arrival of the internet, the figures got a commonplace to rest, helping the administration to take the right choice on perfect time. After came the idea of ERP, and more products started to implement these concepts.

Business entities began to trust that, at last things are coming to control, yet it accompanied diverse sort of difficulties. Despite the fact that it was superior to past situation, the scope of improvement always existed in ERP.

Let’s see the positive changes it brought.

Fixation of Responsibility

With a centralized framework set up, (Let's say Odoo) all the related information are set into it, like manufacturing, purchase, and sales. Warehouses employees are also expected to tally all the related stock and input the data into the same system. Variation is data are normal, yet here what we can do, is measure performance of every employee based on the input data. For instance, the time is taken for a work, or the difference between the actual and expected figures etc. can be used to assess the performance of an employee. In any case, here one thing is sure that worker can't escape from their obligation.

Simple to get a valuation of your Inventory

There are numerous techniques accessible to figure valuation of stock in an organization, and with the utilization of ERP, the system will oversee the stock and its details. Also, when the administration needs the details, they can get it from the system. What's more, as we realize that there is numerous sort of cost related to stock, like purchase cost, holding cost, and so on. With having the correct details on hand, those costs can be decreased.

Undiscovered profit estimation, how it makes a difference

This is the critical thing. How about we look into a case, with a purchase of stock. Presently organization expect some sale price of that and then deduct the original cost from the expected sale price. This means by which they get some unrealized profit. Indeed, it's not real profit, but rather in light of that information, they can make an idea about how much amount they may earn from that stock. What's more, as time goes by they can decide, whether they need such an item or not. At first thought, one may think is it a big deal? Because we can make the calculation by our self, but in case of large enterprises, who deals with many products, it is a great thing.

Inventory Mapping

In organized sector, there is the virtual guide of all item stock. They should hope to have such design in ERP where they can map stocks. By having such thing, it will have the exceptionally same interface as the real one and will help the user to enter the details. Furthermore, there will be fewer chance to have wrong data in the system. Expanding the same idea, for every area, there is the pre-defined area for every item. Mapping the product with its physical location is a really good deal for a better tracking of the product.

Area insightful stock In the organization, one item moves to numerous area, starting with one distribution center then onto the next, and starting with one area then onto the next area. What is critical in such case for administration to have information that in which area, how much stock are there. Likewise, how much stock are there in production location, and from that consumed products, what amount is the expected outcome, will there be any stock loss? If yes, what will be an approximate level of loss? By having such valued details, the organization can accurately forecast possible future data and plan according to it.

Now let’s have a look into the adversaries ERP brought.

No stock in ERP, while it's there in real stock

Many time such things happens. We will have product in stock and a delivery order is on the pipeline.

But the system can’t proceed with the transaction as the value in ERP is still zero. Often the attempts end up in failures. But today many ERP systems (like Odoo) support negative inventory.

Irregularity in following a schedule

This is another point of failure often happens with a production line. There will be a predefined schedule in ERP along with work priority. But if the actual production moves out of the production line (the priority line) then the things will mess up. In fact, the predefined values in ERP system often mess-up with the prerogative decision taken by the employees. This often creates hardship for the whole system.

For some, an organization hasn’t given much importance to inventory, and it's often underestimated.

Yet, as time goes, an absence of stock administration harms as gravely as one could n't realize! In the past, things were extremely muddled to manage, however, after the advancement of ERP, thing has turned out to be better. Furthermore, it will just give you the most ideal outcome, if the procedure of it been taken strictly and effectively. Otherwise, organization will lose time and cash and will backpedal to old age.


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