Cloud ERP has transformed manufactures’ ability of saving costs to acquire a competitive edge. This is the common perception of all manufacturers who have adopted cloud ERP in place of traditional software based ERP. The most compelling advantage of cloud ERP over on-premise ERP is its cost effectiveness.

Cloud ERP in manufacturing provides central visibility and facilitates use of a uniform system for coordination of diverse operations. It also enables manufacturers gain better insights about consequences of every single step involved in manufacturing process. 

Flexible and fast

Manufacturing process is an ideal environment for adopting cloud ERP solutions. It is often noticed that manufacturers are able to explore new avenues to improve scalability and cost optimization after cloud ERP is implemented.

Cloud ERP acts as a centralized resource and helps manufacturing organizations integrate multiple business processes for improving productivity of employees, thanks to its user friendly operations. It allows faster data entry while enhancing data accuracy. Organizations are able to plan effectively with availability of precise and real time data. 

Superior efficiency

Cloud ERP boosts effectiveness of every step involved in manufacturing process by implementation of different ERP modules. It can flawlessly manage clients’ orders by transforming them into quotes for achieving product orders. Companies can also leverage ERP systems to effectively plan raw material procurement.

Freedom of movement

Cloud ERP improves mobility of people by allowing access from anywhere to handle business operations and supply chain management. The flexibility of cloud ERP also supports access from any internet enabled device including smart phones, laptops, or palm-tops. Users can use cloud ERP to operate business from any global location without barriers of currencies or languages.


Single system of Cloud ERP can be used by manufacturers for coordination of diverse operations with central visibility.  
Efficiency of cloud ERP and its overall advantages over traditional ERP are illustrated in the following examples.

Mitigation of scrap and inventory

One of the leading automotive manufacturer and supplier that is engaged in prototyping and manufacturing of precision-welded assemblies switched to cloud ERP. The shift was primarily aimed at addressing business related issues. It was found by the manufacturer that cloud ERP was not only able to resolve business issues but also helped saving money. 

In the past there was a considerable inaccuracy in inventory management and the system was not properly integrated. This resulted in quality related issues, inefficient planning, wastage of time and mounting costs. 

There was a comprehensive change after shifting to the unified and well connected cloud ERP solution resulting in 15 percent reduction in inventories and a whopping 60 percent mitigation in scarp production. There was also an additional saving of premium freight cost by upwards 20 percent. All this resulted in net saving of $100 for every purchase order that was being processed. 

Reduction of IT costs with effective use of value added activities

There is yet another example of how cloud ERP could drive change for a full-service metal fabricator that shifted to it by abandoning the on-premise ERP system. The new cloud ERP was maintained at off premise data centers. 

Since the company has to provide only the simple internet connectivity and basic PCs for users of the cloud ERP system, there was an upfront saving of 15 percent in terms of energy and IT maintenance related costs. 

Implementation of Cloud ERP could free up almost half of the IT workforce that was shifted to value added activities such as ongoing improvement projects that could identify ways to save more than $200,000 for the organization.  

Cost reduction with quality enhancement

One of the manufacturers of customized technologies for braking systems used in automotives could realize that he could not expect the business to rapidly grow by relying on manual based processes that were not at all sustainable. 

It was decided to implement cloud ERP as part of lean manufacturing since the system would allow scaling and help determine profitability and cost by part. Employees were able to improve efficiency by allowing them to group all orders and plan material to execute scheduling. 

The cloud ERP helped company reduce costs and improve productivity by a remarkable margin. It was also observed that there was up to twenty percent improvement in first pass quality and a massive reduction in overtime by sixty percent after adoption of cloud ERP.

Interesting Topic:

Cloud Hosted ERP vs. Cloud Based ERP

ERP on Cloud