ERP Forecasting Helps Construction Industry with Supply Chain Disruption
Supply chain and logistics problems were an issue for businesses across the construction industry last year, thanks to disruptions caused by the pandemic combining with Brexit to create a perfect storm. Those supply chain pressures could have been more easily weathered if construction companies had been pre-prepared for them, says Kevin Crowe of OGL Computer. So how exactly can the industry prepare for unforeseen circumstances? One approach is by implementing ERP (Enterprise Resource Planning) and using that system as a forecasting tool.
ERP could have had a significant impact on businesses suffering from issues including price volatility, reduced staffing levels, the shortage and costs of shipping containers, and employees having to work remotely. Many businesses also had to shift much of their business online to continue trading, which is where ERP would have been an advantage.
ERP systems have features that are tailored to driving the effectiveness and efficiency of a business, such as integrating previously disparate business functions. So, under ERP, purchasing, inventory, sales and marketing, finance and even HR are all combined to provide company-wide updates. This increases productivity, efficiency and responsiveness, helping to provide a better customer experience and freeing up local resource.
For construction companies that sell services, products and tools online, ERP also offers the opportunity to input direct pricing from suppliers, which helps minimise the chance of eroded margins, keeping customers up-to-date with price information and avoiding the need to waste any time in continuously contacting suppliers.
ERP systems enable digital transformation to weather supply chain issues
Supply chain problems often stem from inaccurately forecasting sales and stock levels. For construction businesses to remedy any potential supply chain disruptions, transparency and visibility of the entire supply chain is key. Understanding any gaps is where ERP systems can help.
Small and medium sized construction businesses are realising just how transformative ERP systems can be in providing better stock control, customer service and ultimately profitability.
For anyone in the construction industry unsure whether their business would benefit from implementing an ERP system, ask yourself:
- Do you have an increasing workload of day-to-day tasks, including admin, that could be made easier through automation? If your business is drowning in admin tasks and processes, an ERP software system could enable your existing staff to more efficiently carry out those same tasks, in less time.
- Do you have full visibility of your customers’ sales journeys or are you missing sales opportunities? By implementing ERP to manage stock and sales, you could easily absorb new prospect accounts and reach out to a wider set of new customer targets.
- Do you find it hard to keep up with customer demands and expectations? ERP can help you to deliver a personalised service that makes your customers return time and again. Improved customer service can directly influence your good reputation across the construction industry.
Real life: increasing efficiencies and improving customer experience with ERP
In today’s hybrid working environment, smaller teams working from home can use ERP to process the same amount of work as larger teams working in an office. ERP can also improve customers’ experiences.
Joseph Ash Galvanizing, for example, provides customers from large construction companies and fabricators with a wide range of spin galvanizing, shot blasting and powder coating services. They were having challenges with their legacy system, an older physical server infrastructure that was running End of Life operating systems. The company wanted to move to a fully virtualised environment running the latest available operating systems to remain competitive.
OGL Computer Services (OGL) created a bespoke IT solutions package for Joseph Ash Galvanizing that provided a centralised management system enabling its internal IT team to manage the entire server farm from a single console. This improved efficiency, performance and productivity.
Upgrading Joseph Ash Galvanizing’s systems to a web-based ERP solution, hosted on the cloud, gave the company the ability to work at a quicker pace, with secure remote access rather than the need for dedicated servers. Joseph Ash Galvanizing benefited from the simplicity of an off-the-shelf product with the benefits of easy-to-implement customisation, with quick and easy user onboarding.
ERP drivers and barriers
A survey* found that 88 per cent of UK construction and building suppliers agree that a central ERP system gives a company greater visibility and control of stock.
76% of respondents saw benefits from integrating disparate systems into a single ERP software solution, which is used by the likes of Gibbs Tools, Montrose Group and Allfix. 57% of respondents cited the main reason to use a single system, as reducing administration time, followed by 40% citing improved accuracy of information and 37% stating improved efficiencies by removing duplication of work across different departments.
Just under half of the respondents (44%) have concerns about security of their data in the cloud, so are reluctant to move core applications and data to the cloud, while nearly a third (31%) recognise that manual processes are ineffective in managing business operations.
Construction companies considering ERP can mitigate any potential issues when switching over to ERP if they follow these simple steps:
- Review existing business processes to see how they can be redesigned to increase effectiveness
- Choose technology that meets future business strategies, not just present circumstances
- If you are looking to start selling online, make sure that the software has an integrated eCommerce functionality to maximise efficiencies
- Review and clean customer, supplier and product data to increase the chances of a smooth migration
- Provide full training to the main users in each department, so they can help train other staff and take ownership of the process for their department
- Choose a software provider that can support and help your business achieve maximum return on investment. Choosing the right supplier is just as important – if not more so – than the ERP system itself.
Construction businesses are increasingly turning to ERP to optimise processes and boost profits. ERP software consolidates all business-critical data into one system so all users can see exactly what’s going on in real-time. Connecting all areas of your business, ERP technology offers instant access to the information companies need to deliver their construction projects more cost-effectively. By optimising processes from sales orders to stock, finance, pricing and online selling, ERP provides the entire construction industry with full control and visibility to boost profits and future-proof business.
By implementing ERP, businesses are investing in a system that is built to help them increase sales and support growth, offering the tools needed to make improvements, discover new opportunities and ultimately buy better and sell smarter.
* Source: OGL Computer
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