The role of ERP in smart manufacturing

15 March 2024

The Role of ERP in Smart Manufacturing

Inforlogic looks at the role of ERP in developing a smart manufacturing capability.

As economic pressures continue to bite, and an environment dominated by volatility and uncertainty prevails, having the ability to adapt and adjust to change quickly is paramount. Digital developments and Industry 4.0 frameworks have redefined how we view manufacturing, with smart factories dominating new developments and innovation in the sector.

The smart factory explained

A smart factory is a connected organisation, seamlessly linking equipment, people, and supply chains, using sensors, remote diagnostics, and Artificial Intelligence (AI) to increase efficiencies across the board.

Underpinned by intelligent technology to establish a more agile, flexible, and efficient operation, smart factories are designed not only to take efficiency and productivity to new levels but crucially, to react quickly and effectively to challenges and opportunities.

While technologies such as sensors, as part of the Industrial Internet of Things (IIoT), autonomous vehicles in the warehouse, and robotics for heavy lifting, are all synonymous with the smart factory, the digital landscape doesn’t stop there. Ensuring the right foundations from which to process, contextualise and deliver insights based on the data, is crucial.

With this in mind, where does ERP fit, and what role does it play?

ERP at the Core of Manufacturing

ERP at the core

Navigating the plethora of different technologies, systems, applications, and capabilities available is a task in itself, requiring expertise and experience from which to make the right decisions on where to invest.

As the driver of most of an organisation’s core business functions, ERP represents the beating heart of operations, therefore it’s crucial to get it right the first time. All other technologies feed into ERP and reinforce its objectives to deliver greater automation, visibility, collaboration, insights, and intelligence.

In establishing the digital foundations of a smart factory, the right ERP platform should encompass agility, resilience, flexibility, and scale. With these boxes ticked, a list of features, functions, and benefits can then be established to align capabilities with specific needs.

An integrated approach

The ability to easily integrate with third-party applications is also fundamental in facilitating the visibility and productivity necessary to optimise the potential of a smart factory.  On their own, applications are not going to deliver fundamental change. They won’t necessarily integrate with other providers, and disparate systems inevitably bring inefficiencies and risks.

However fully integrated into the core ERP, they will support the business model which brings the ability to react quickly to changes and evolving market dynamics. Using all available information allows organisations to react in a fast, appropriate way, not only to big disruptions such as the pandemic or Brexit, but the many smaller ones which organisations face daily.

So now that we’ve established the criticality of the right ERP, what should you expect it to deliver?

What to look for in an ERP solution


1. Automation

Automation allows mundane, manual tasks to be undertaken in a more efficient, productive way. Through replacing legacy systems with an integrated ERP platform, resources can be freed up for more value-added activities.


2. Collaboration

There is no room for silos in the smart factory. Operations must be joined up with collaboration, communication, and cohesive decision-making forming the foundations of a successful business model.


3. Intelligence

Through advanced analytics and superior reporting, the right ERP can deliver fast, meaningful insights from which to steer decision-making and optimise performance. Having a means of being able to access intelligence in varying levels of detail, according to business area or department, employees are empowered and plans can be created based on data rather than past performance and intuition.


4. Innovation

In a world where speed is of the essence in responding to changing market dynamics, having the agility to switch to new production processes in light of product diversification, or shifts in demand levels, is key. The right ERP will ensure integration with PLM and other key systems to facilitate a means of innovating quickly.


5. Customer first

Once upon a time, manufacturers operated in a fairly one dimensional manner, shipping products to a fairly faceless market. Now, everything has changed. Manufacturers typically have fewer customers and higher levels of competition, which means that they must engage and deliver an experience to them which is superior to that of their competitors. This shift from pushing out its products, to delivering against a unique set of demands, necessitates a robust ERP system to connect processes across the organisation and ensure real-time insights from which to manage customers’ expectations and experiences.

Beyond the headline technologies

Perhaps the most important point to take away when considering the ingredients for a smart factory is to remember that the headline technologies will only ever be as effective as the ERP system deployed.

Digital transformation is not about investing in technology for technology’s sake, but rather taking an incremental approach, determining where the major gains are to be made and starting there. For this, the right platform must be in place. With this cemented, the right technologies can be deployed to optimise operations, build agile, efficient business processes and instil the to meet any challenges head-on while staying ahead of the competition.

To possess smart factory principles that hold sufficient elasticity to cope with fluctuating capacity and demand, and the tools to navigate both internal and macro-economic volatility both today and well into the future, manufacturers must embrace the core principles of a smart factory. While the core principles centre around greater automation of processes and enhanced workflow, the smart factory leverages this capability to empower people and create value through leveraging multi-dimensional data across a resilient and agile platform.

Beyond the Headline Technologies

Get in touch


Contact Inforlogic

Ultimately the value the right ERP brings to a smart factory cannot be overlooked. A manufacturer’s ERP system will determine the success of all other digital investments, from BI and AI to robotics. With a platform to integrate all of these, and perform all-important analytics to contextualise the data they generate, the smart factory’s true potential can be realised, and competitive advantage secured to help secure a place in today’s turbulent marketplaces.

For more information on how we can help you support your smart factory plans with Infor CloudSuite Industrial, please get in touch or call the Inforlogic team on 01606 720499.

Back to News & Blog

Get in touch