How the Internet of Things Can Boost ERP

Don’t overlook the significant effect the Internet of Things will have on your enterprise resource planning systems and the business processes they support.

The core goal of an ERP system is to provide actionable data and information to company leaders. But collecting accurate data is an ongoing and vexing challenge. The Internet of Things has the potential to massively expand data availability and improve accuracy. This has significant implications for customer service, forecasting, inventory management and business intelligence.

To take full advantage of the business potential of the Internet of Things, manufacturers need to fully embrace it within their manufacturing operations by equipping their products with the sensors and tools necessary; and they need to capitalize on the full potential of modern ERP systems.

The IoT changes customer and field service with connected products for which the manufacturer can access machine behavior.  The product can even order it’s own replacement parts.

The Internet of Things also provides a direct connection with end users, a key feature of an ERP system.  Direct sales to a customer makes the end user visible in the manufacturer’s ERP system, which has been a challenge through distributor sales.

The Internet of Things has the potential to eliminate previously used complex and challenging forecasting processes by allowing point-of-sale inventory levels to be transmitted directly to the factory. Made-to-order replaces the made-to-stock model if information about product popularity is available.

The ability to have products communicate directly with the ERP system and update on-hand values can also eliminate the tedious effort and time spent on inventory management.

With the Industrial Internet of Things, we can expect to see metrics that show the present reality and enable true, actionable business intelligence. The Internet of Things makes location irrelevant so companies can keep an eye on machine operations anywhere in the world rather than just locally.

The IoT enables social analytics and a direct interface with customers, almost like a live newsfeed. This helps managers make sound tactical decisions for distribution supply chains, shop floor schedules and sourcing.

Cybersecurity is a clear and legitimate concern for manufacturers, and with more products connected than ever before with the rise of the Internet of Things, it must be prioritized. But the Internet of Things is a new reality of life, and manufacturers should not shy away because of any real or perceived security risks. Instead, they should couple their proactive approach to adopting new technology with an equally aggressive approach to cybersecurity.

Manufacturers should perform a cybersecurity risk assessment, annual or biannual penetration testing, and monthly vulnerability scanning — best practices to ensure ongoing data security.

The stage is set for manufacturers of all sizes to revolutionize their businesses and ERP operations with the Internet of Things.

>> Read more by Evert Bos, IndustryWeek, March 24, 2017

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