The performance of any business depends on the productive use of the resources in the company. If a company is not able to schedule the resources, the performance of the company or business will reduce. The proper scheduling needs the proper system which takes care of the allocation of the work. Enterprise Resource Planning definitely helps organizations to improve the performance of the business by reducing the lead time of the product that is being produced by any company. The lead time is calculated on the basis of the time required to produce the final product.
Many instances, the machines are free in the manufacturing companies because the production manager is not have the sufficient amount of information on the machine capability and the number of man power needs to be allocated for the machine to carry out the process. This obviously leads to the gaps in the production system.
Let us take example here. Suppose, a piece of work is going on machine, the production manager has to have the clear idea on when the work is going to be completed so that he can schedule other work for that machine along with the sufficient man power. Without ERP application in place, the production manager can not get the information on the production capabilities of the machine and he does not even aware on the number of people required to finish the work. This leads to more number of people allocated for a single piece of work but after completing the work, the machine will vacant and the manpower will sit idle.
If ERP system is implemented in the same environment, the production manager will get the clear statistics on the machine capabilities and man power capabilities. With this information, he can easily schedule work for the machine and avoid idle time. This way the lead time of the manufacturing will reduce. It is true that the machines will run 24x7 if the enterprise resource planning application is implemented in the business environment. With this way, the production manager can commit the customer on the delivery date. This obviously leads to carry out many a number of orders with minimum resources.
The simple logic here; the production manager has to ensure the machines run for entire day to manufacture more products and carry out various customer orders with in the stipulated time. If this happens, the performance of the business will improve automatically. Enterprise resource planning helps the business owner in the company scale up process. It gives clear data on the production capabilities versus the number of orders coming in. If the present production environment is not capable of accepting all the incoming orders even after the effective utilization of the resources inside the production environment, it is the clear symbol that the business needs more resources to carry out all the incoming orders. The business owner can make the quick decision and can definitely orders for more resources to carry out the business smoothly.
ERP helps the production manager to schedule the resources accordingly and therefore it is possible to execute more order.
