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Benefits of Integrating IoT with your ERP Solution

IoT (Internet of Things) has suddenly risen to prominence in the past couple of years, with a lot of focus on getting business value from the data that is being generated by devices.

As per Gartner, “the Internet of Things (IoT) is the network of physical objects that contain embedded technology to communicate, sense, or interact with their internal states or the external environment.”.

With the introduction of 5G networks, IoT is going to get the sort of boost that data & broadband got after 3G & 4G networks. With this milestone in mind, companies across the world are gearing up for the plethora of opportunities that will come.

ERP or Enterprise Resource Planning applications have been around for more than 25 years and continue to evolve and provide value in changing times. As per Gartner, ERP is defined as “the ability to deliver an integrated suite of business applications. ERP tools share a common process and data model, covering broad and deep operational end-to-end processes, such as those found in finance, HR, distribution, manufacturing, service, and the supply chain. ERP applications automate and support a range of administrative and operational business processes across multiple industries, including line of business, customer-facing, administrative, and asset management aspects of an enterprise.”

What we are seeing now is the collaboration of the old (ERP) and the new (IoT) to bring tremendous benefits to the organization. Let’s talk about some use cases where ERP and IoT are working together.

RFID (Radio Frequency Identification)

This was perhaps one of the first sensor-based devices that became a rage in the mid-2000s when Wal-Mart decided to have its top suppliers make their products RFID-compliant. Essentially, RF tags are put on the pallet, carton, or even SKU (stock keeping unit) level to monitor the movement of the item in, out, and across the warehouse or store. So, the next logical thing that happened was that the information provided by these RF tags was integrated with ERP applications, which made receiving, tracking movements, and shipping out products completely automated.

Imagine a truck load of your product coming into the warehouse and your team being able to receive it and process it into your ERP in minutes. That is the sort of efficiency that RFID integrated with ERP implementation will give you.

Quality Processes in Manufacturing

Traditional quality processes have been dependent on sampling techniques to determine if products are being manufactured as per standards. Not only is this not accurate, it is also too late in the process. It creates inefficiencies and unproductive work at multiple levels, and the use of IoT technologies integrated with ERP can significantly reduce these incidents.

For example, if you are able to catch any deviations from specifications as and when the product is being manufactured, you could easily stop the line and fix the issue. This would greatly minimize defective parts, if not completely eliminate them.

By introducing IoT technologies, the manufacturing equipment and the product line can be monitored 24×7. What if the production line supervisor notices a small deviation in actuator speed that can cause a complete component misalignment? He could immediately take steps to prevent further production unless corrective steps are taken.

Fleet management

One of the biggest beneficiaries of IoT & ERP integration has been the fleet management industry. Apart from the regular benefits like vehicle tracking & geofencing, data passed from IoT sensors can really help validate and help achieve business goals.

As an example, each vehicle would already be managed as an asset in the ERP application, with components listed and preventive maintenance schedules in place. What if the data from the on-board diagnostics (OBD) of the vehicle is correlated with the maintenance data? Maybe the maintenance needs to be more thorough, maybe it can be delayed, or maybe certain aspects of maintenance are being missed. Such invaluable data will not be possible without ERP & IoT applications working together.

Digital Supply chain

Supply chains are being truly transformed by the use of IoT devices, which talk to ERP applications. The supply chain is no longer an array of opaque warehouses, stores, shipping terminals, or trucks but a constant barrage of movement, providing you visibility at a SKU level if you so choose.

Imagine a situation where you are trying to figure out exactly when the components that you need to complete a product will arrive from China. Your MRP (Materials Requirement Planning) takes into account the time of arrival since the containers are tagged and are constantly sending information about their whereabouts. This can be a completely new avatar of the tried-and-tested JIT (Just in Time) concept.

ERP & IoT applications working together are in the process of transforming the way information is received by us. The increase and benefits of ERP implementation in efficiencies that can be attained are only limited by our imaginations.

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