6 Key Reasons Why ERP is Not Enough

4 minute read

port controller, harbor master in command on the terminal port for safety and control security during the operation of ship in port

1. ERP is a management-level tool

The shipbuilding industry relies heavily on ERP – most companies consider it a mission-critical application. But traditional ERP solutions cannot deliver the pace of change and flexibility required to meet customer demands and market trends.

This blog explains the six main reasons why ERP is not enough to establish a competitive edge – and the technology that will deliver the efficiencies and advantages you need.

Designers built ERP to assist with management-level strategic decisions – a task that it handles well. However, most ERP systems exist in their own silo. Shop-floor fabrication tools remain disconnected from central planning; an employee must manually update information to notify planners that fabrication of a part has finished, for instance.

This disconnect leads to mismatched information – and the "real time" of the ERP system seldom matches the real-time realities of the workshop floor. ERP does not have to be up-to-the-minute accurate for long-term planning, but workshop floor tools like Manufacturing Execution Systems (MES) do.

2. Production outpaces management

Do not underestimate the issue of real-time access to information. Any strategic or market change managed at the ERP level generates a volume of change about 10 times higher on the production level. ERP cannot keep pace, but a purpose-built production management system will help contain the amount and speed of change on the workshop floor.

3. Inability to meet user requirements

ERP targets senior decision makers, so it does not typically meet the requirements of production workers. Yes, ERP presents information for strategic planning – but it is neither granular nor timely enough for production. Historic trends remain useful, but your production teams need contextual insights now.

4. Supply chains must be integrated beyond strategic and commercial levels

ERP has allowed shipbuilders to refine most of their internal operations; however, to gain a competitive advantage, they need to look outside the organization – to their supply chains. The most competitive shipbuilders will be those with the most optimized supply chain.

To succeed, shipbuilders will need to share information with the rest of their digital supply chain, allowing every stakeholder to see real-time data for strategic planning and execution. Each party needs to make short-notice adjustments to ensure high performance at each touchpoint. This goes far beyond the capabilities of traditional ERP, so an alternative platform will be required.

5. Combining the "why" and "how"

At the most basic level, ERP helps you understand the "why" of an activity, supporting strategic decisions. MES focuses on the "how to," explaining operational activities and decisions. Where the "why" and "how to" exist separately – as is the case with traditional ERP deployments – it is almost impossible to bring the two together without significant manual effort. In the future, your organization will need to unify ERP and MES in a single system to achieve symbiosis and bring ideas and designs to completion faster.

6. Geometric data requirements

ERP deals with "flat" data; the shop floor relies on 3D models for use with cutting robots or during assembly. MES can store and display this information, but ERP cannot, which creates an information gap that can compromise decision-making and operations – especially without MES capabilities.

Going beyond ERP

Off-the-shelf ERP is not optimized for shipbuilding processes, causing these six serious issues. Octave technology integrates engineering processes with ERP capabilities and solves these challenges to generate benefits across your business. Smart Yard includes a number of modules to increase operational efficiency and profitability:

  • Construction eliminates idle time by bridging project schedule, work packages assignment and warehouse material availability.

  • Material improves material management across the entire supply chain.

  • Production provides a real-time feedback loop for improved workload balancing and maximized production flow.

With these tools you can build single models with traceable relationships and consistent designs, improving planning and production readiness. You can reduce costs and improve the efficiency of your entire supply chain while eliminating bottlenecks and risk. Accurate 3D modeling allows you to assemble an entire ship in advance, identifying and eliminating risk and accelerating start-up.

The right tools integrate yard engineering, material supply chain, construction management, weld quality management, virtual assembly and system completion and handover. With a single point of reference for management and production, you will begin to realize the efficiencies and competitive advantages necessary to increase profits.

For more help and advice on moving beyond ERP, please contact us or visit this webpage for more information.