Studies that surveyed manufacturers about the impact of ERP systems on firm performance indicate that company size and industry do not affect the results. Benefits have been indicated for large and small firms, whether they make standard or custom products or are in discrete or process manufacturing environments. This section explains the quantifiable benefits in terms of several areas of improvement. Reprinted from Maximizing Your ERP System by Dr. Scott Hamilton.
benefit of jit
Current Typical Improvement Benefit Sales $10,000,000 10% Cost of sales 7,500,000 Material 4,500,000 60% Labor 1,000,000 13% Overhead 2,000,000 27% 5% $225,000 10% $100,000 Administrative expenses 2,000,000 $150,000 Pretax income $ 500,000 $475,000 ERP Impact on Key Financial Ratios Ration analysis provides another way to look at the impact of an ERP system. Three ratios illustrate the effect---two related to liquidity and one to operating performance. Inventory turnover (Cost of