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Using ERP To Improve Your Business Bottom Line

 
2017-07-31 
Caitlin Richardson 
 
When you think of the words Enterprise System, what comes to mind? Is it just another program to memorize? Or maybe it's that thing that is always breaking down creating nothing but problems. Or maybe you think it's just too expensive, impossible to implement, and just not worth all the hassle. Here's what you should be thinking: Yes, please.

Tekoa ERP can aid your organization in innumerable ways. Read on to learn all about what it can do for you.

To begin, what is a bottom line? It's that number at the bottom of every Income Statement that indicates the health of your company. It's essentially what's left when you take the money you have, add the money you are entitled to, and take out all the money you owe. It's the money you really have despite your cash situation. It's the leeway available to your company to give you investors or to reinvest in the company. That said, how healthy is your organization? What is your situation like? Could it be better?

Here are three things that are necessary to improve the health of any company.

1. Lower Inventory Levels

When you lower your inventory levels, you decrease the amount of money you are currently spending:

A. Making Works in Progress and Finished Goods that are never going to make it to a paying customer

B. Heating and storing these goods you're making

C. Insuring and guarding these goods

D. Moving around from location to location

E. Selling, at a discount, or disposing of the things you made that were either broken during that time, or became obsolete while you were guarding, storing, heating, lighting, moving, and generally puttering around with this nonsense.

You can avoid all this stress and inefficient use of resources (Money!) by utilizing a leaner business model. An Enterprise System can aid this by coordinating each department. A sales rep would type in an order, and the computer would relay to the warehouse what materials were necessary, would schedule the manufacturing, and would follow each piece of work through quality checks, packaging, shipping, straight through to the customer. It even links customer service into the mix allowing customer service representatives to see the product and the individual unit history and answer any questions the customer may have.

2. Decrease Operational Expenses

One major way to lower your operational expenses is by lowering your levels of unnecessary inventory. Don't keep goods around unless they are actively promoting your bottom line. Also, remember that to have a balanced company, every machine or person in your company (be in manufacturing, service related, or what-have-you) may not be working every minute of every day. Engineers in factories are looking at that last sentence and throwing things angrily at their computer screens but it's true nevertheless. 

Think of an office. A secretary in a given office has at her disposal a copier, a fax machine, a computer, a telephone and a dictation machine at all times. Yet, at any given moment, she will not be utilizing every single machine available to her. It would be wasteful to do so. She would end up making copies just for the sake of making copies, and where's the good in that? She would talk on the phone while typing dictation, and the combination would typos in the typing and customer service faux pas left and right.

An Enterprise System in this particular example would be a rather extreme solution to the secretary's operating enthusiasm, but the principle still applies. The ES can help your company to schedule tasks and activities so that machines are working when necessary and are being used to their greatest efficiency (not their maximum output). It would help coordinate tasks to keep inventory moving through the system, which brings us to the third reason.

3. Increase Throughput

Finally increasing throughput is the culmination of the other two. If you use an Enterprise System to fully utilize the potential of your company by lowering inventory levels and decreasing your operational expenses, then you will see marked improvement. The company at any given time will have less build up of useless inventory, and the throughput (the amount of finished goods being sold and delivered to the customers) will increase. Not only that, but the throughput will be more on-time and quality and your customers will thank you and more importantly, they'll come back.  


 
 

 

 

 

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