{"id":69125,"date":"2021-07-07T15:48:03","date_gmt":"2021-07-07T13:48:03","guid":{"rendered":"https:\/\/www.sage.com\/en-za\/blog\/?p=69125"},"modified":"2026-01-29T17:57:41","modified_gmt":"2026-01-29T15:57:41","slug":"ierp-closing-the-gap-between-manufacturers-and-customers","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-za\/blog\/ierp-closing-the-gap-between-manufacturers-and-customers\/","title":{"rendered":"iERP: Closing the gap between manufacturers and customers"},"content":{"rendered":"
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\n\t\t\t\t\t\tiERP: Closing the gap between manufacturers and customers\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"\"\t\t\t\tCharlotte Danby<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n
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Inefficient manufacturing processes, such as overproduction, defective output, imbalanced inventory, idle equipment, and employees waiting for instruction create expensive loss and waste issues that organisations can ill afford. These wasteful processes and practices drain a business\u2019s ability to navigate the turbulent global market in pursuit of new opportunities.<\/p>\n

Ultimately, unchecked inefficiencies<\/a> will cost a company its competitive advantage, customer base, and reputation.<\/mark><\/p>\n

The COVID-19 pandemic has highlighted the damaging cost of inefficiency. The pressure is on for organisations to build a well-oiled value chain that is transparent, agile, and responsive to all stakeholders\u2019 needs. Unfortunately, those manufacturers that remain dependent on traditional production systems such as financially focused ERP software and other outdated technologies, are at a significant disadvantage.

\n\tDownload your Digital transformation in process manufacturing report<\/a>\n<\/div>\n<\/p>\n

The costs of legacy ERP<\/h2>\n

Technology is always changing. No sooner has one iteration been launched and the next version is already being tested. It is little wonder then that some business decision-makers are reluctant to update their current IT architectures before demonstrating some return on investment. The problem is that legacy ERP<\/a> systems will never be able to provide the intelligence and muscle necessary to address production inefficiencies and boost performance.<\/p>\n

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A legacy ERP system is typically siloed into addressing specific functions, usually finance.<\/p>\n<\/blockquote>\n

It fails to connect the business as a whole, which inhibits collaboration and communication. Important information that requires immediate action often falls between the cracks that separate the various departments from one another. This can result in, for example, inventory variances.<\/p>\n

A sure sign of an outdated ERP system running the show is when raw materials lie idle around the warehouse. <\/mark>This imbalance between supply and demand is costly in more ways than one: extra stock requires storage space, unused materials cannot contribute to revenue, and low or out-of-stock goods that are high in demand negatively impact the customer experience.<\/p>\n

However, the costs of legacy ERP systems are far more extensive and expensive<\/a> than one might think. In no time at all, these costs can cause irreparable damage to the business\u2019s relationships with its customers and suppliers, reducing its shareholder value in the market. A recent IDC report \u00a0on digital transformation reviews the business costs associated with outdated ERP systems and divides them into the following two groups:

\n\tDownload your Digital transformation in process manufacturing report<\/a>\n<\/div>\n<\/p>\n

Direct costs:<\/strong><\/p>\n