ERP (enterprise resource planning) is a type of software that companies use to streamline and manage day-to-day activities such as inventory, accounting, procurement, production, etc. ERP systems are now essential for the management of thousands of organizations of all industries and sizes, including apparel businesses. Demand planning, product development, finished product delivery, revenue recognition, cash flow, and other individual processes can be managed with apparel ERP software.
Choosing and implementing an ERP software solution is a major decision with many implications, and it is definitely not something to be taken lightly. This guide will cover the basics of enterprise resource planning and how it relates to the apparel industry. We’re also sharing some tips on how to find the right ERP solution and successfully implement it.
ERP Solutions for the Apparel Industry
The apparel industry has its own set of challenges, such as lack of real-time management, lack of integration and communication across departments, inventory stock-outs or surplus inventory, and inadequate data security. Even if they’ve worked in other industries, standard software solutions typically fail to solve these pain points for apparel brands.
Some of the most important benefits of implementing ERP software created specifically for the apparel retail industry include greater efficiency as a result of smooth flow of information between departments and access to information in real-time, fewer errors, improved inventory management, better labor tracking, shorter order-to-shipment cycle, and improved accounting control through integrated financials. ERP provides capabilities that can be customized to your individual business requirements, allowing you to address both tangible and intangible savings.
Common Features of Apparel Manufacturing ERP Software
The first step toward a successful ERP implementation is choosing the right ERP solution. In the apparel industry, ERP is used for apparel design, manufacturing processes, raw materials management, distribution and shipping, and workflow management. ERP fashion software provides a centralized database of all business processes and operations.
Understanding the key ERP features will not only help you understand why this software is so important for apparel companies but also help you select the cloud-based solution that best fits your apparel company’s needs. Here are some of the most important ones to take into consideration when evaluating ERP systems:
Supply chain management. ERP apparel software tracks demand, manufacturing processes, inventory, logistics, and distribution to provide insight into a company’s supply chain management efficiency. Real-time data on a company’s supply chain can assist in detecting inefficiencies and improving inventory management and control. SCM systems can also aid with inventory planning and distribution resource allocation.
Manufacturing. By assisting with product planning, sourcing raw materials, production management, and forecasting, ERP systems help improve the entire manufacturing process. Modules for bills of materials management, assembly management, work order management, product tracking, shop-floor control, and distribution planning, are among the other important components.
Integration. The fundamental, and perhaps most important benefit of ERP is a centralized view of critical operational, financial, and business data that can be communicated in real-time across different departments. You can expand your options by integrating your ERP system with your warehouse management solution (WMS), your product lifecycle management (PLM) software, or the systems used by your third-party logistics partners and suppliers.
Automation. Order processing, reporting, invoicing, and other repetitive business operations can all be automated with ERP. Automation cuts down on time spent on manual entries, decreases errors, and allows employees to focus on higher-value tasks.
Customer relationship management. By using an ERP solution with integrated CRM features, all customer-related information is stored in a single database that’s easy to access, including prospect status, contacts, purchase orders, and transaction history. CRM solutions allow businesses to automate tasks such as filling up purchase orders, creating accounts receivable reminders, etc. Marketing and sales staff benefit from ERP solutions with integrated CRM because it makes it easier to sell, upsell, produce purchase orders, predict, manage commissions, and measure crucial information like ratios and profit margins.
Accounting. Accounting elements in ERP include the capacity to manage and analyze financial data like general ledger, accounts payable, accounts receivable, forecasting, and budgeting. The most robust systems can perform more advanced functions like tax administration and revenue recognition.
Data analysis and reporting. Employees can obtain a wide range of information using data analysis and advanced reporting to get valuable insights, make better decisions, improve company procedures, and detect issue areas. Visual representations, such as graphs, charts, and dashboards, may be included in reports, with the goal of highlighting trends and patterns to improve your entire business performance.
Implementing ERP Software
Once you have chosen the best apparel ERP, it’s time to implement it. Implementing enterprise resource planning software requires an investment of company resources, time, and money, so it’s wise to have a plan. We’re offering 6 tips that will help you understand the process and ensure a successful ERP implementation.
1. Assemble an ERP implementation team
Putting together an effective ERP project team will make your job a lot easier. You’ll need the following ‘core’ members to get started: project manager, application developer, application analyst, and QA engineer.
However, in order to make sure that your ERP implementation runs smoothly across all departments, a couple more persons are required. Depending on who your main stakeholders are and the nature of the ERP solution you’ve chosen, these might include senior management, shop floor personnel, warehouse staff, sales department, and so on.
2. Draft an implementation budget
According to studies, expansion of the initial project scope was the main reason businesses went over budget during ERP implementation. On the other hand, as of 2020, 40% of ERP implementation projects did not surpass the budget.
Trying to figure out how much you will need to spend on ERP implementation is difficult, but there are certain expenses you can anticipate. An ERP solution will cost at least one percent of an organization’s gross annual revenue, so keep that in mind. You must also factor in the price of network and hardware upgrades, overtime compensation for employees, customization fees, vendor training, as well as data storage and backups.
3. Begin with data migration
The process of transferring data from its original sources to the ERP system’s database is known as ERP data migration. It frequently entails transferring data from several systems, storage types, and formats into a single, unified structure.
Prior to the ERP implementation, some departments may use general-purpose tools such as spreadsheets, while others may use systems designed to handle only their specific functions, such as human resources or accounting software. Organizations need to adopt a rigorous approach to ensure the success of data migration, which can entail extracting, reviewing, and transforming data from these tools and systems before importing it into the ERP database.
4. Train your employees
User adoption is critical to the success of your ERP implementation. To avoid making typical mistakes and wasting time correcting errors, it’s critical that everyone understands all aspects of the system, and a well-designed user training program is the best way to ensure this.
There are several methods for training your employees, but the most common is the ‘e-learning’ method. Be sure to keep communication channels open throughout the training period and offer opportunities for trainees to provide feedback that the implementation team will later act on.
5. Deploy the ERP software
This stage includes system testing, determining project metrics, network reliability and speed assessments, and data backup operations, among other things.
Going live will require an extra workforce to supervise the process and ensure seamless integration. Keep in mind that communication, both with your team and with the rest of the labor force, is of the utmost importance. You will need to be clear on who’s responsible for which task, when it should be completed, and make sure everyone is on the same page.
6. Evaluate the success of your ERP implementation project
All that remains after your ERP is deployed is to assess whether your implementation was successful. The following are some of the questions you should ask yourself to determine this: Is your return on investment increasing? Is there a reduction in human error? Has the level of consumer satisfaction risen?
It’s important to bear in mind that ERP implementations are rarely a straight line. Although, in theory, the software should meet all of your functional requirements right out of the box, the reality is that in order to achieve all of the business needs, ERP customizations and/or third-party integrations are frequently required.
The Bottom Line
The bottom line is that, in today’s marketplace, ERP solutions are vital for remaining efficient and competitive. When implemented by a company familiar with the challenges of the fashion industry, ERP can lead to an increased ROI, reduced manual errors, improved time management, enhanced employee and customer satisfaction, and decreased administrative and operational costs.
Selecting an adequate ERP solution for your apparel business can be a challenging and time-consuming process, but it will be well worth your while. A comprehensive, web-based ERP solution delivers end-to-end solutions that can help you stay ahead of the competition, meet all of your company’s short-and long-term objectives, and support business growth.