Aberdeen

ERP in Manufacturing 2012
The Evolving ERP Strategy

July 2012
Nick Castellina, Kevin Prouty

| | |
| | |

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of thispublication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at thetime of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

Research Benchmark
Aberdeen’s Research Benchmarks provide an
in-depth and comprehensive look into process, procedure,methodologies, and technologies with best practice identification and actionable recommendations
Research Benchmark
Aberdeen’s Research Benchmarks provide an
in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations
Executive Summary
Enterprise Resource Planning (ERP) has been defined as an operationaland transactional system of record. With its roots in Material Requirements Planning (MRP) it has long been used by leading manufacturers to uncover untapped efficiencies, reduce costs, and provide visibility to managers to aid in informed decision making. Today, 92% of manufacturers have implemented ERP. Still, recent data finds that a successful ERP implementation goes well beyond just puttingit into place. ERP, and the organization itself, should be constantly moving forward. Successful manufacturers tailor ERP in reaction to business change and needs. This can include adding new functionality or mobile access. This 7th annual Aberdeen benchmark, based on over 170 survey respondents in manufacturing, explores Best-in-Class approaches to manufacturers’ evolving ERP strategy andperformance.
Best-in-Class Performance
Aberdeen used the following five key performance criteria to distinguish Best-in-Class companies:
18% reduction in inventory as a result of ERP
94% internal schedule compliance
97% inventory accuracy
97% complete and on-time delivery
3.37 days to close a month
Competitive Maturity Assessment
Survey results show that the firms enjoying Best-in-Classperformance shared several common characteristics, including:
56% have the ability to quickly alter ERP to reflect business change
70% have cross-functional continuous improvement teams
61% integrate manufacturing operations with product design
Required Actions
In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must:
Sharedata with the extended enterprise
Provide alerts to decision-makers when certain conditions occur
Provide the ability to forecast and plan for demand

Table of Contents
Executive Summary 2
Best-in-Class Performance 2
Competitive Maturity Assessment 2
Required Actions 2
Chapter One: Benchmarking the Best-in-Class 4
Business Context 4
The Maturity Class Framework 5
The Best-in-Class PACEModel 6
Best-in-Class Strategies 7
Chapter Two: Benchmarking Requirements for Success 10
Competitive Assessment: Capabilities and Enablers 11
Chapter Three: Required Actions 21
Laggard Steps to Success 21
Industry Average Steps to Success 21
Best-in-Class Steps to Success 22
Appendix A: Research Methodology 24
Appendix B: Related Aberdeen Research 26
Figures
Figure 1: Top Drivers...