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Industry 4.0 –
Is your ERP ready
for revolution?

Industry 4.0 & ERP:
a winning match

We are experiencing the fourth industrial revolution, on the wave of Industry 4.0. It is crucial for production companies to verify whether the existing ERP system can support them on their path towards adaptation to Industry 4.0.


Over the next decade, Industry 4.0 will emerge to meet the demand for bespoke products at affordable prices. At the same time, it will allow manufacturing companies to access highly flexible mass production processes that can be quickly adapted to market changes. There is no doubt that Industry 4.0 will have ramifications throughout the manufacturing sector. However, according to a recent study, only 8% of manufacturers have significant knowledge of Industry 4.0.

New connections between machines, production processes and ERP systems

Industry 4.0 requires a change in the production scenario towards an “agile” model, powered by technological tools such as the Internet of Things (IoT), 3D printing, cloud computing, mobile devices and big data. In this context, corporate resource planning (ERP) will become even more central to production. The ERP system will become the real backbone of the entire production process: it must be able to connect intelligent machines, logistics systems, production plants, sensors and devices, while the products and machines communicate with each other and exchange commands and instructions along the production line.

To adapt to Industry 4.0, ERP system suppliers are moving away from predefined interfaces and formulas, opting instead for highly connected systems that conduct operations at the production line level, while providing company decision makers with the real-time data they need. The ERP system compatible with Industry 4.0 will fully integrate with the production execution systems (MES). Consequently, it will be possible to trace and document the transformation of raw materials into finished products.

For example, in an automobile manufacturer operating in Industry 4.0 perspective, each car has an RFID chip for the manufacturing process. This chip contains all the information on the product, from the color of the shell, to the type of material on the seats and any characteristic or detail made to measure. When the frame reaches the first workstation in the production line, the RFID chip sends a message to the MES, which will direct the machines to paint the body in the customized shade requested by the customer. Once completed, the action will be recorded on the RFID chip and the car will move to the next workstation. This process allows you to meet the needs of individual customers, while maintaining the efficiency expected from the production process. Thanks to its dynamism, Industry 4.0 allows last minute changes to production, so that manufacturers can respond flexibly to interruptions, changes to orders or supplier failures, if necessary.

It is important for production companies to check whether their existing ERP system can support a high level of integration with MES, while embarking on their path towards adaptation to Industry 4.0. Below are five questions, which production companies should ask themselves about their ERP system, to understand if it is able to support them in an Industry 4.0 perspective.


1: Is your ERP system flexible?

Industry 4.0 is a path, not a single project. Production companies will therefore benefit most from ERP software which has flexible implementation options. This will allow them to adapt to new business and service opportunities, new processes, workflows, data networks and decentralized positions, all in real time, as their business grows in the interconnected world. That ERP software is hosted in your data center or in the cloud, as a managed service, local or as a combination of these, it should be possible to easily change processes and adapt to new ways of working, to maintain business agility.


2: Is your MES compatible with your ERP system and able to manage multiple positions?

The best new generation ERP solutions are able to integrate effectively with a MES (Manufacturing Execution Systems) solution. This is important because it allows the MES to be connected to the ERP solution for real-time data exchange. For growing manufacturing companies, it is important to consider that MES should be able to cope with individual structures, but also with the centralized management of multiple production sites. This will give them the freedom they need to integrate their production lines with higher level business processes, step by step, according to their strategic plans, without compromising the final result.


3: Can your ERP software manage data centrally?

In order to be Industry 4.0 compatible software, an ERP software should meet 3 key requirements

  • First, it should offer companies a modular platform based on a service-oriented architecture. In this way, business processes can be easily customized without changing the software code, guaranteeing the way for future technological developments or release updates.
  • Second, the ERP software should allow central management of the master data.
  • Third, it should offer real-time data processing, allowing all stakeholders in the industry to have access to the latest and most accurate data.

These 3 criteria form a powerful combination for accurate business decision making. An ERP that responds to these fees allows all parties to view the same information on projects, customers, raw materials or locations, helping production companies to improve the experience of their customers and the speed of placing on the market.


4: Does your ERP system facilitate mobility and social collaboration?

Data sharing is becoming synonymous with Industry 4.0 and this will also allow for more flexible cooperation between departments. As part of this more flexible communication, easy access to ERP information via tablets and smartphones will become increasingly essential for businesses. The ability to access intuitive dashboards and the ability to adapt to all screen sizes will be fundamental elements of ERP solutions for companies that embrace Industry 4.0 models for updating and sharing information in the world of mobile work. ERP solutions should also have the necessary mobile infrastructure to ensure real-time data synchronization.

Social collaboration is becoming increasingly important and next-generation ERP solutions are integrating social features to help partners, suppliers and external customers be part of the business process. Embedded in the ERP system, the information from these informal discussions is stored centrally in the context of ERP data, rather than being buried and forgotten in third party systems.


5: Are you ready to benefit from the powerful analysis and Business Intelligence associated with Industry 4.0?

The powerful planning and management functions in the new generation ERP systems can guarantee that the advantages of intelligent production touch all the relevant areas of the company. In the world of Industry 4.0, the sophisticated ERP analysis tools will help, for example, to verify the planning, execution and evaluation of new business models; or to test what will work, allowing business leaders to make informed decisions and helping them adapt to market or customer demands.


It is clear that for production companies, growth in an Industry 4.0 environment will be intrinsically linked to a company’s ERP system. Companies that already own a new generation ERP solution will be in an advantage position to meet the frantic and connected requirements of Industry 4.0. Of course, the boundaries between production and management will soon have to disappear and the ERP and MES systems will have to form an integrated unit, to ensure that companies can realize the growth opportunities presented by this new era of “intelligent production”.


Would you like to know what Fluentis ERP
can do to support your business
through the Industry 4.0 revolution?





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