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Information Integration Pays Back

Competitive Advantages for Packaging Companies that Make the Most of ERP Systems

June 2011
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Competition is fierce in the packaging industry and is all the more challenging if employees cannot access reliable information or update data fast. Enterprise Resource Planning (ERP) systems are one way to alleviate these issues because the software integrates companies’ entire business operations and centralizes data throughout the entire production-to-billing cycles.

Sounds nice in theory, but what are ERP’s real benefits? Do these benefits justify the costs? Also, do the companies that use the systems’ full potential gain greater business success?

These questions are explored in a white paper titled, “ERP in the Packaging Industry—What is ERP’s business impact and are all ERP users equal?” by marketing research company, Vanson Bourne. The Bourne organization sampled nearly 200 packaging organizations throughout Europe and North America, of which nearly three-quarters had an ERP system for their day-to-day management. They examined:
  • Affects from having or not having an ERP system;
  • Benefits of companies with ERP systems versus companies that don’t have ERP systems;
  • How the user’s skill level and acceptance affected a company’s return on investment and benefits.

ERP: Impact on profitability and efficiency

The white paper reports that companies with ERP systems in the packaging industry gained greater business efficiency because they had more management agility and their business processes were slicker and more advanced.

• More than five times as many companies using ERP achieved a profit margin of 9 percent or greater. Only 3 percent of companies without an ERP system achieved the same profitability.

• Three quarters of respondents with an ERP system entered data once into their systems, then leveraged it throughout the entire production process. Less than a third of respondents without an ERP system enjoyed the same benefit.

• Almost half of the users without an ERP system could only produce basic reports. Less than a third of respondents with an ERP system had the same limitation.

• Users with ERP systems were twice as likely to have the ability to split jobs between plants easily and to keep track of costs.

Figure 1 further demonstrates that companies with ERP systems also were better equipped to manage the day-to-day operations of business.

Factors for high ROI

Since ERP systems are one of the most costly technology initiatives to implement, the study focused on three overarching factors to determine how businesses could get the greatest return on investment:
 

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