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Overcome These 7 Manufacturing ERP Challenges with a Two-Tier Strategy

January 09, 2024

Manufacturing companies today need top-of-the-line solutions to oversee their processes and resources. A standard ERP system helps provide organizations with a centralized hub through which to manage critical day-to-day operations.

Yet these systems may not allow the growth, flexibility, and cost-sensitivity necessary for scalable success. Today, many organizations view a single-tiered ERP solution as limiting—constraining individual business units under a one-size-fits-all system.

A better way forward is to implement a two-tiered approach, where one ERP solution works on the corporate level while another, more tailored solution works at the business unit level. This creates more flexibility, faster time to value, and lower costs, empowering your business to solve these common issues:

1. Complexity

Any business can very quickly get mired in an overly difficult system. However, remaining with a one-tiered ERP strategy will actually increase the odds of this happening, as you try to align and integrate many different business units and their needs into a supposed one-size-fits-all platform.

How two-tiered ERP solves it: Having one layer at the corporate level and another layer at the individual business unit level clarifies and simplifies by giving users more independence and flexibility.

2. High Costs

Businesses don't just want to reduce complexity; they also want to reduce costs. As your organization grows and expands its capabilities, with a one-tier solution the costs of maintenance and upgrades across a variety of business units will rise as well.

How two-tiered ERP solves it: Taking a two-tier approach reduces costs through simplified implementation and upgrades that use fewer IT resources. The second-tier ERP system could also be a tailored or less costly version.

3. Scalability Limitations

Businesses want to position themselves for growth, which means having systems and technology in place that will help them scale. However, staying with a one-tiered ERP approach actually puts a cap on scalability by forcing everything into a one-size-fits-all model.

How two-tiered ERP solves it: Giving business units a separate ERP means they have more flexibility to do their best work, allowing them to scale as needed without being constrained by a one-tier system.

4. Time to Value Lag

Speedy time to value is a necessity for any product, service, or technological innovation an organization offers. However, individual business units—with their unique needs and pace of innovation—could be overlooked or left behind by a one-tier ERP system, preventing them from realizing any meaningful value.

How two-tiered ERP solves it: When your organization implements  a second-tier ERP solution  for a specific business unit's needs, you'll experience faster time to value—no waiting while trying to align with a one-tier system.

5. Inconvenience

It's simply inconvenient to take a one-tier ERP approach, which limits efficiency across business units due to  increased costs, slower time to value, and more complex implementation.

How two-tiered ERP solves it: It's faster and more effective to deploy a second tier to individual business units, meeting their requirements while also offering  customization and flexibility.

6. Unaddressed Needs

The needs of smaller business units are often overlooked when using a one-size-fits-all, single-tier approach. Companies tend to make upgrades and enhancements only for larger business units, meaning that smaller units may end up shortchanged, or even left out completely.

How two-tiered ERP solves it: Let the first tier of your ERP address bigger business demands, while your second tier  caters to the needs of smaller business units—helping ensure no one is left out.

7. Insufficient Support

Finally, when a single-tier ERP system only favors larger business units or forces the organization into a one-size-fits-all approach, there ends up being an unbalanced level of support across the enterprise. If your ERP system doesn’t have the resources and tools to support the unique operations, pace, or localized requirements of all business units, you'll be leaving parts of your business behind.

How two-tiered ERP solves it: Help smaller business units meet their goals by empowering them with a unique ERP system designed for their processes, people, and productivity.  

Solve Your ERP Challenges Today

If you've been facing many of the above challenges with your single-tier ERP solution, now's the time to reevaluate your strategy and adopt a two-tier approach. By using one tier at the corporate level and another at the business unit level, you can alleviate complexity, cut costs, increase flexibility, and position your business well for whatever the future holds.