ERP Selection Tips for Manufacturers
Chances are, if you’re in manufacturing, you already have software to manage your operations. It may be time, however, to think about updating that system. With competitive trends accelerating and customer preferences evolving relentlessly, manufacturers are under pressure to adapt and become more agile and better at what they do. New cloud-based Enterprise Resource Planning (ERP) solutions like Acumatica give you capabilities that easily translate into improvements in efficiency, quality and profitability. With that in mind, here area few selection tips for selecting the right manufacturing ERP solution.
Table Stakes
Any worthwhile modern ERP solution will have certain core features. Think of them as “table stakes” to be in the manufacturing software game. These include having a cloud-hosting option and the accompanying flexibility the cloud enables. Cloud computing gets you out of the capital investment (CapEx) you’re accustomed to with on-premises solutions.
A modern manufacturing ERP should also be extensible, with the ability to integrate with other systems using standards-based APIs. Mobility is a given, as is deep data management and analytics capabilities. Security is also “table stakes,” especially considering the emerging risks facing Operational Technology (OT) SCADA systems that may be linked to operational management systems like ERP.
Manufacturing ERP Selection Factors
Assuming the system you have in mind meets the table stakes, consider the following factors when making your selection:
- It allows you to make decisions with visibility and collaboration. You should be able to use the ERP solution for internal collaboration as well as for coordinating processes with supply chain vendors and customers.
- A good manufacturing ERP enables you to bring complex, customized products to market in a rapid cycle; it facilitates, rather than hinders, the adoption of new manufacturing methods and technologies.
- You can manage resources and inventory to keep costs under control and minimize the amount of cash you tie up with inventory.
- It offers powerful but flexible master production planning and control.
- The solution handles complexity in the lifecycles of your various products, e.g. multiple versions, revisions, updates, end-of-life, etc.
- It can easily handle complex product structures that generate Bills of Material (BOMs) with multiple levels.
- You can set up and implement detailed routings that include processes that occur off of your shop floor.
- Production scheduling is flexible.
- Configuration management is easy to use.
- You can use market data reporting to anticipate supply and demand for materials and finished goods.
- Cost reporting is fine-grained enough to allow for rigorous cost management and cost cutting that doesn’t negatively affect product quality.
- BOM costing and production costing allow for roll-up to design and production planning.
- You can allocate overhead flexibly, by product, product line or business unit.
- It integrates with the accounting system, including for multiple entities.
- You can create production orders that track costs for materials, labor and materials as well as overhead that’s either fixed, variable or both.
- You can integrate with Customer Resource Management (CRM) for sales tracking.
- It provides Quote-to-Order-to-Invoice capabilities.
This may look like a long list, but it’s really just a sampling of what you should be looking for in a manufacturing ERP solution. We have worked with many manufacturers over the years in the selection and implementation of new ERP systems that are adapted for their unique business needs. If you’re thinking about upgrading your manufacturing ERP, we should probably talk.
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