How IoT will Impact ERP

ERP is all about entering data into complex, structured databases at the end of processes and then manipulating and exchanging it within modules to get insights or actions. IoT is the opposite of this. It deals with unstructured data coming from multiple devices in varied formats in unpredictable patterns. A combination of the two would be unthinkable, most of us would conclude. Not quite so. While integrating IoT with ERP could be a long-drawn process, it will most certainly improve the ERP system’s efficiency and make it flexible, intelligent and real-time.

Let us see how:

  • Production efficiency will improve

Human-driven events such as scanning a bar code, manual input of data into a database or software, can be made real time and automated with sensors embedded in production materials and machines. This will in turn improve production efficiency.

  • Manufacturing will become leaner

Inventory control and procurement can be automated as material that is consumed and needs replenishment can be tracked with the help of IoT-enabled sensors in machinery without the need for human intervention.

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  • Quality control will be preventive not remedial

IoT will enable quality managers to see processes as they happen and identify failures or incompetence at the source, instead of doing damage control after failure. As an IoT-enabled sensor spots a failure, it will send a notification to the data centre which triggers the ERP to take action.

  • Customer feedback will be genuine

IoT embedded in finished products will allow manufacturers to monitor how a customer interacts with it. This will give valuable insight to customer care, sales and the manufacturing and planning departments.

  • Asset management will be real time

Machinery with integrated intelligent sensors will pick up its faults, wear and tear issues that arise during its lifetime and relay the information to an ERP. The ERP system can in turn provide the concerned departments with this data so repair or replacement action can be performed.

  • Security of data

Data security will be of prime concern with data exchanged openly between devices and platforms. Mobile devices and wearables will have to be secured with flawless security measures to ensure user data is not breached.

  • Analysis of data will accrue cost and effort

The mammoth data collected, exchanged, stored and relayed by intelligent, inter-connected devices will require detailed analysis which is a challenge currently. Analysis of data is a skillset that is still evolving but at a much slower pace than is desirable.

IoT integration in ERP systems demands careful planning and iterative implementation. It is still in a nascent stage but is a trend that looks promising though challenging.

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