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6 Key Reasons Why ERP is Not Enough


ERP is heavily used in the shipbuilding industry – for most it is considered a mission-critical application. But traditional ERP solutions are unable to 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.

1. ERP is a management-level tool
ERP was designed to assist with making management-level strategic decisions – a task that it is generally very good at. However, most ERP systems exist in their own silo. This means that shop-floor fabrication tools are disconnected from central planning; an employee must manually update information to notify planners that fabrication of a part has been completed for instance.

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

2. Production outpaces management
The issue of real-time access to information should not be underestimated. 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 specifically designed management production system will help to contain amount and speed of change on the workshop floor.

3. Inability to meet user requirements
Because ERP is designed for senior decision makers, it does not typically meet the requirements of production workers. Yes, ERP clearly presents information for strategic planning – but it is neither granular not timely enough for production. Historic trends are undeniably 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 who have the most optimized supply chain.

To succeed, shipbuilders will need to share information with the rest of their supply chain, allowing every stakeholder to see real-time data that they can use for strategic planning and execution. Each party needs to be able to make short-notice adjustments to ensure consistently high performance at each touchpoint. Obviously, this is 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 to understand the “why” of an activity, helping to support strategic decisions. MES is more concerned with 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, bringing 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. This information can be stored and displayed in MES, but not ERP, creating an information gap that can compromise decision making and operations – especially if you don’t have MES capabilities.

Going beyond ERP
Off-the-shelf ERP is not optimized for shipbuilding processes, causing these six serious issues. Choosing a specialist technology like Intergraph Smart® Yard to integrate engineering processes with ERP capabilities solves these challenges to generate benefits across your business. Smart Yard includes a number of modules to increase operational efficiency and profitability including:

  • Construction to eliminate idle time by bridging project schedule, work packages assignment and warehouse material availability.
  • Material to improve material management across the entire supply chain.
  • Production to provide a real-time feedback loop to allow for improved workload balancing and maximized production flow.

With these tools you can build out 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, eliminating bottlenecks and risk. Accurate 3D modelling allows you to assemble an entire ship in advance, identifying and eliminating risk and accelerating start-up.

In fact, the right tools will 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.

About the Author

Ismo is the Pre-Sales Director at Hexagon PPM and responsible for the development of the fabrication market mainly in the EMIA region. He is based on Oulu, Finland. He has a broad experience within b-to-b sales, pre-sales and business development in the metal industries, steel prefabrication and shipbuilding.

Profile Photo of Ismo Piirainen