It is hard to imagine, fashion and many other industries operating successfully without leather products. You may find genuine leather products in the market easily but manufacturing companies need to put a lot of hard work and effort into running their business successfully. It is a fact that in the past few years, the leather goods manufacturing industry, as well as SMEs, have undergone a sea change. The reason for the same is the high competitiveness in the marketplace and high customer expectations in terms of product quality, innovation, and effective delivery channels. To be a market leader, industries are relying on the best quality automation system which is secure, user-friendly, scalable, robust, and reliable. Fortunately, with ERP software, companies manufacturing leather goods, bags, shoes, and other products have come into the position to perform better than before.
What challenges faced by leather goods manufacturing industry?
Major challenges which a leather manufacturing SME faced are with regard to stocks, promptness of delivery, and regulatory compliance. Tracking raw material shipments, BOM (bill of material) formula generation, cost calculations, etc., were certain activities performed manually. This eventually leads to consuming more time, an increase in error chances, and an overall reduction in business profitability. But once the companies have implemented ERP software, they find businesses are performing in a better manner and improving their overall productivity.
How ERP helps the leather goods manufacturing industry?
Not only one area, ERP software help a leather manufacturing business in multiple ways.
- Inventory Management: For the leather industry, available stock of raw materials plays a special role in reducing inventory wastage. Based on the stock figure, the companies work on their production capacities. Thus, any fault in tracking inventory accurately leads to failure in meeting the market requirements. Similarly, if the tracking is done manually, it consumed a lot of time with an increase in the chances of error. With ERP implementation, the task of keeping track of the available stock of raw materials becomes fast, easy, and error-free. Moreover, the management gets a notification as and when the stock slips below the required level allowing them to take timely actions.
- Bill of Materials (BOM): A Bill of Material is a specific list of items and sub-assemblies required for manufacturing particularly items say leather shoes, bags, or saddlery in a particular quantity. It is one of the most important documents in the manufacturing business based on which documents like Work Orders are prepared. By choosing cloud-based ERP software for manufacturing saddlery or leather bags, it becomes easier for companies to manage BOM on multiple levels. Highly scalable software gives access to navigating multiple levels of BOM via BOM browsers.
Product Management: It is a herculean as well as a tricky task for managing different products and their batch numbers safely. In the leather industry, where companies have to manage products in different colors, shapes, sizes, etc., the effective management of thousands of products needs undivided attention. In such situations, ERP software proves to be a clear winner by managing a number of products effortlessly from a single console. Whether an employee wants to retrieve any information or wants to track any particular product, everything is possible with a single click.
Order Management: It becomes easy for an industry to win more customers and address their requirements adequately if they are able to manage orders well. Companies need to put special attention to effective order management as it is a key to building a long-lasting association with customers. The on-time delivery of products helps in cementing a better customer-company relationship and it is possible only when the ERP software looks after order management. In the leather industry, the classification of orders, pricing, billing, timely delivery, and other requirements is easy to perform with flawless ERP support.
- Quality Control: It becomes easy to implement quality control measures and adhere to them if an ERP system is in place. Right from the phase of procurement to sales, the software is designed in such a manner that it monitors every production phase and informs the authorities in case any error occurs. Timely reporting of errors further helps in taking corrective measures. So, it becomes a cakewalk to monitor the quality of sourced materials, and the overall quality of the final product, and take timely actions in case something goes wrong. This further helps in improving the customer satisfaction rate.
- Scrap Management: An industry like leather needs to focus equally on scrap management systems also. You may find multiple takers for your scrap material but it will be of no use if the timely dispatch of the material does not take place after evaluating its accurate value. This is one area that is hard to manage manually. Using ERP software helps in managing this area optimally by connecting with a number of takers and sending them timely information about available scrap stock. Once scrap material is timely handled, companies are in a position to give more functional space and a work-conducive environment to their employees.
ERP Benefits for Leather Manufacturing Companies:
The ERP software system proves to be a blessing in disguise for all kinds of industries including leather manufacturing industries. In our last article, we covered how effective implementation of ERP in a leather manufacturing SME helps in inventory management, bill of materials (BOM), product management, order management, quality control, and scrap management. But the interesting part of the story is the benefit of the software is not limited to these areas only. Today, we will discuss some other areas where the implementation of the ERP system shows wonderful results for leather manufacturing units and SMEs.
- Human Resource Management (HR): Human resource is the asset of every organization. Based on the company’s size, the numbers of employees vary by hundreds or thousands. In such cases, the HR module of ERP software helps in managing all issues pertaining to the human resources of an organization. Right from managing payroll, to generating salary slips leaves status, and the total number of working hours of employees, the software manages all at one click. Whether a leather manufacturing unit has a single office or multiple offices in different locations, it is possible to any information about any employee right from his contact information, salary details, and performance evaluation to appraisal records in no time. The advanced version of ERP even accommodates computation of the taxation, expenses claim, gratuity, and provident fund as their main features.
- Invoicing Management: In the leather manufacturing businesses, two kinds of invoices are generated: sales invoices and purchase invoices. When a company manages the invoice management process manually, it needs to process every detail with caution leaving behind no scope for error. At the same time, it has to ensure disbursing the payment timely whether it is for direct labor, raw materials, utilities, or any kind of management, etc. Manually creating and verifying these invoices consumes a lot of time and demands qualified personnel also. But a cloud-based ERP system supporting invoicing module takes care of these aspects in the most hassle-free manner.
The ERP system really works well for medium and large-scale manufacturing units where weekly task involves preparing hundreds or thousands of invoices. The features like customization invoices, supporting multiple languages, automated billing, etc., act as icing on the cake. Moreover, the advanced software even accepts invoices in different forms such as PDF invoices, e-mail invoices, etc. This eventually helps companies in making huge savings in operational costs by cutting down bill processing time that too without requiring human intervention and with 100% accuracy.
- Export Invoicing & Documentation: Many advanced ERP systems are equipped with a pre-invoice feature that helps in creating tentative bills based on estimated figures of goods and services expected to send to customers. This bill is shared with the customers before delivery. Once the order is dispatched, it becomes easier for companies to prepare the actual bill based on the tentative bill shown in ERP records. Similarly, the ERP software for the leather manufacturing industry is extremely helpful for preparing export invoices after uploading necessary documents.
An Unseen Benefit: What most companies do not realize is choosing the right kind of ERP software helps in maintaining good relations with clients in the long run. The different modules of the ERP software eventually help in customer or client management by maintaining flawless communication and building harmonious relations between them.
So, if you are looking for the best and the most advanced version of cloud-based ERP software for leather goods manufacturing industry and SMEs, Webcity Technologies LLP is the right platform. The reputed company offers advanced and robust ERP solutions, which help in managing your business operations efficiently. Feel free to ask for customization as it even offers customization solutions at the most competitive rates.