The Most Important Step for Heading to Industry 4.0

The Most Important Step for Heading to Industry 4.0

Industry 4.0 is the most discussed topic in the current modern era. When we talk about Industry 4.0, we referred it as smart manufacturing or industrial internet, it’s like manufacturing machines are building connectivity and having conversation between each other. The idea is like machines will synchronizes and notifying each other, proceed with the next steps of manufacturing automatically.

All these are not possible without the massive database to support it, known as the big data. For instances, machines will automatically analysis what materials and how many quantities needed during manufacturing, calculated the time needed to complete, and even prepare the materials if the stocks are insufficient. All this information comes from the big database and a complete database will provide first insight to think few steps ahead.

Nowadays common companies are using the cooperation management software, Enterprise Resource Planning System (ERP), not only to collect and manage the data, but also able to support the company daily operation. Almost 100% of the world’s largest companies are using ERP software. There are different grades of ERP software, from thousands to millions of dollars. ERP is a resource that not only need to be invested at the beginning, but also requires maintaining and provide resources continuously every year. The more the company could invest, the more the ERP would help in return. We will discuss the preparation needed for implementing ERP into a company.



Real-Time Data

  • ERP is an integrated management system, it could help enterprises to achieve the「Resource Allocation Optimization」and 「Maximize Business Value」by improving collaboration and workflows.
  • By adopting the ERP system, standardized the business process is the must. Therefore, through the consensus of management, in charge persons are required to feedback the consistent data from the prescribed process. It could make the information transparent across the whole company by providing employees with access to the real-time data when they need it.


Smart Procurement
  • Through the computerization of data (collect the historical transaction for the subsequent setting of reasonable purchasing lead time), the supply chain could become responsive via improved demand forecasting, inventory management, procurement and more by subsequent linking to the LRP systems.
  • Unified insight into sales, purchasing and production could reduce the overages of procurement and production for optimizing the stock levels.


Smart Scheduling
  • Due to the transparency of information, sales team will be able to focus on building and maintaining customer relationships, proactively respond to customer by tracking the production progress, and then improve the on-time delivery rate.
  • In addition, after collecting the production lead time, it could optimize the production schedule and machine utilization rate by subsequent linking to the APS systems.


Data Report Analysis
  • ERP system could help the employees to generate useful reports and analytics at any time from a single source of truth. It gives them to make more valued decisions which could increase the efficiency and reduce operational costs.
  • The details and reports generated from ERP could help the employee to eliminate repetitive manual processes of multiple spreadsheets and emails, but by subsequent linking to the BI systems, it may further generate more visualize and multi-dimensional report.


Hard Soft Integration
  • With ERP as the basis for information-based management, it could be heading to automated manufacturing even intelligent manufacturing (Industry 4.0) to replace the manual work production which human error occurs occasionally.
  • The parameter data for each production could be fed back from machinery to the system by subsequent linking to the MES systems.



What do companies need to prepare and how to choose the right ERP?

Let’s talk about how to make a company has their own ERP system.

First of all, the management of company have to understand what is the demand for the system, and then plan according to the resources of the company. For example, the system can provide a database for the use of analysis and statistic. A company’s data can be transformed into useful information, in order to help the management, do the right decision on spot.

Then, the company must be aware of its future direction and examine internal employees can achieve the same level of operational capability as they expand. On the other hand, using integrated software tools will make the company’s processes more completed. Therefore, the main concern is not the cost of the enterprise to use ERP, the main consideration is ERP can help the company achieve the highest cost-effectiveness. In other words, the right ERP system ensure funds invested at the beginning get quickly return and different changes for the enterprise. In addition, employee’s awareness of ERP is also very important in the process. Senior management needs to actively promote internal training, so that employees have certain concepts for the future development of the company. The more importantly is the senior management needs to work with the employees to find out the pain points of the company, due to the bad habits and wrong attitudes of employees make more impossible to make changes.

In a nutshell, corporate management must educate employees to use ERP software and solutions constantly. In order to make the entire business process more efficient to reduce the workload requirements of employees.

We have discussed the benefits of ERP and how to choose the right ERP for your company to move into Industry 4.0. Now let’s talk about how to prevent the occurrence of possible introduction failures. The enterprise should clearly determine the expected improvements and goals before the introducing the ERP system, continuously correct the expected performance targets in order to achieve a satisfactory introduction. In the same time, the enterprise must simultaneously assess the risk of failure, measure the benefits that can be created for the company after introduced and make the enterprise strategy, company goals, and organizational culture characteristics match with the introduction of ERP. As a result, you can reduce the risk of import failures.


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