Before the introduction of modern ERP systems, small and medium-sized manufacturing activities were conglomerates of different machines, software platforms and processes.

Although computer technology existed, it was procured by different management segments in their area of ​​influence for their use. As a result, the data were not integrated and the elements of the systems could not communicate with each other. Any data exchange between production and financing or purchase and storage had to be interpreted, parsed and defined as the process language of the receiving department. Although technology had improved efficiency compared to previous decades, it still left much to be desired.

The most effective way to make continuous improvements with data and technology was the arrival of ERP systems. ERP, or enterprise resource planning, was developed to coordinate and seamlessly integrate data flow between departments in all functional areas. It helped to overcome silage data and developed a common database for use between all subsystems, which was useful for decision-making in all areas.

Once ERP systems have matured, they are now an integral part of production, with further leaps in production efficiency as well as in the operation of the entire company. They act as company-wide master data and analytical systems. However, just as ERP was once a new technology, the advent of Industry 4.0 has triggered radical changes in manufacturing.

Industry 4.0

Fourth Industrial Revolution or Industry 4.0. This movement involves Internet equipment, often sold and maintained with analytical software that uses AI and machine learning, upgraded to production facilities, or built into new equipment. And as companies increasingly move to collect and analyze data, the move toward a smart or connected plant will affect entire production.

Manufacturing – The use of Internet technology allows all plant equipment to be connected to a single dynamic database. Decision-making for many operations can be automated and analyzes can be performed faster if human intervention could be duplicated. This includes using the machine, scheduling, staffing and working on the process.

Maintenance – Internet of Things and Industry 4.0 allow you to create predictable maintenance programs. Predictive maintenance goes beyond preventive maintenance, not only by identifying problems, but also by planning repairs, managing incoming spare parts, and recommending maintenance before failure, which can lead to even longer production losses. In companies that have introduced IoT and use predictive care, the reduction in maintenance costs and maintenance-related downtime has decreased by 20%.

Supply Chain – Whether managing raw material shipments, ordering spare parts independently for maintenance, or managing inventory more accurately, IoT brings analysis to supply chain management. Deployable companies will be able to use some type of digital joint research team, using the same data collected from production facilities, to find, track and consume materials more efficiently and cost-effectively.

Must Haves

In recent years, the number of ERP systems available to manufacturers has increased. Many of these new solution providers offer a variety of services and applications, such as cloud-based availability and data management, scalability, continuous updates, and more. Their deployment is more flexible and is ideal for small and medium-sized producers, who may not have the resources to find more expensive larger suppliers.

For manufacturing companies that want to take advantage of the natural coincidence between ERP and Industry 4.0, some “must haves” have been chosen for the ERP system:

  • It must be able to fully integrate with the connected devices and be fully interoperable between all the connected devices and the people using them.
  • It must be flexible and modular, offering multiple iterations for deployment.
  • It must be data smart, allowing real-time centralized data management.
  • It must be mobile to allow access to data via tablets, phones and other devices.
  • Data processing must be fast and this speed must be maintained when scaling.

Increasing the availability of faster ERP systems offers Industry 4.0 the opportunity to advance faster. And ERP systems deliver greater productivity by consolidating business processes into a single database. They also improve reporting and increase the company’s flexibility in all functional areas. And they enable sharper decision-making by providing better information about the data provided, making their IT efforts easier and more manageable.

Industry 4.0 is, of course, compatible with ERP, as it either utilizes these elements in the enterprise infrastructure to reduce implementation time, training, and data and metrics across departments to reduce the need for pre-programming. Or, it enhances the functionality already available with ERP to enable higher automation, autonomous decision making, intuitive, and focused machine learning to enhance ERP’s core capabilities to enable them to function more efficiently. If Industry 4.0 were to be the next “ultra-fast” data transmission, then ERP systems would be the pioneers who have cut through the forest and organized the components of the infrastructure on which the road will be built.

Also, an article about Cloud-based ERP vs. On-Premise ERP for Small Manufacturing Business might be helpful.