For those new to the topic, Choosing an ERP for Manufacturing can be a relatively intimidating subject. However, once you break it down into “layman’s” terms, ERP solutions are fairly straightforward. An Enterprise Resource Planning (ERP) system is a group of software programs that make business planning easier by working together to help the business owner plan, develop, and market products.
ERP software can perform the following functions:
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- Supply Chain Management
- Knowledge Database
- Human Resources
- Project Planning
So when you’re thinking about what you need from an ERP, there are some things you need to consider.
Do you run a small business or a large enterprise? If you run a small business, a “lighter” version of an ERP may be preferable due to cost constraints, while larger companies may require beefier programs, such as Oracle, SAP, and Microsoft. These three programs cost significantly more than the small business counterparts, but they make it easy to manage large amounts of data, and you’d be hard pressed to find a large company that isn’t using one of these programs today.
What is the platform you will use to run it? Do you need the software to be accessible from any computer, anywhere? If so, you’ll need a cloud-based program, such as NetSuite. Will you need to be able to use it on a smartphone? IFS is an excellent choice for mobile users. Do you have confidentiality and security requirements to live up to? If so, you’ll more than likely want to host the software on your server, and Microsoft Dynamics would be an excellent choice.
Open Source or Paid? Startups and small businesses may benefit greatly from open source software. That is software for free and downloadable from the web. Free software may often lack features that larger businesses depend on, such as 24-hour help lines and automatic integration with other services such as social media, e-mail, etc.
9 Tips For Choosing the Right ERP For Manufacturing
- Make a list of the functions you need
Companies decide on an ERP program based on word of mouth reviews or price. However, once they begin to use the software, they find out that it is missing a critical function that they need, so they either have to learn to live without the function or invest in a second program. Both options are less than ideal and can end up costing your company valuable time and money.
- Make a list of how your current solution is failing you
Whether you use Microsoft Excel or an open source software, it’s important to know what functions are lacking from your current program so you can make sure that you choose a new one to support all of your needs. Once you’ve discovered the things that your current software lacks, add these functions to the list you made in step 1.
- Discover your options
Do your research and choose 3-4 options that appear to fit your needs. Once you’ve figured out which ones you want to try first, request a trial period from the software developers and test them out. You should check them for a minimum of one month to make sure you’re able to learn the ins and outs of each program and where it falls short of your needs. Take detailed notes of what’s going right, what’s going wrong, and what can be tweaked to work for you. them for a minimum of one month to make sure you’re able to learn the ins and outs of each program and where it falls short of your needs. Take detailed notes of what’s going right, what’s going wrong, and what can be tweaked to work for you. your needs. Take detailed notes of what’s going right, what’s going wrong, and what can be tweaked to work for you.
- Allow a few users from each department to test it
Rolling an ERP out to an entire company can cost upwards of hundreds of thousands of dollars when you consider the per-person cost of the software and the salary of the workers who will be using it. To avoid wasting tremendous amounts of resources, you should have a handful of users spanning as many different departments as possible try all of the options during the trial period. Once they’ve had a few weeks to get to know the software, a meeting can be called to discuss the pros and cons of each one and to make an informed decision that will benefit everyone – not just the people in charge.
- Invest in training
ERP systems can be very complex and challenging to learn, so hiring an expert that can come in and teach the users how to navigate the software is often less costly than letting users “figure it out.” Plan to have the expert hold learning sessions in person and ask him or her to be available via phone or email to answer questions between lessons. to learn, so hiring an expert that can come in and teach the users how to navigate the software is often less costly than letting users “figure it out.” Plan to have the expert hold learning sessions in person and ask him or her to be available via phone or email to answer questions between lessons.
- Ask others in your industry
If you know people that have similar needs from your industry, it would be worth reaching out to them to find out what they like (and don’t like) about the ERP software they use. Alternatively, you can find various internet forums, like the forums at Toolbox, which will allow you to reach out to other industry professionals and hear an array of opinions. enable you to reach out to other industry professionals and hear an array of ideas.
- Think about your company’s future needs
You wouldn’t want to implement a small-business ERP solution and then have to turn around a year later and upgrade because your business has grown. Utilize your sales figures, plan of activities, and any other tell-tale signs of a growing business to anticipate your future needs and then plan accordingly. Investing more money into a more advanced ERP system now would save you the time and hassle of implementing a system and then implementing a different system soon after., and any other tell-tale signs of a growing business to anticipate your future needs and then plan accordingly. Investing more money into a more advanced ERP system now would save you the time and hassle of implementing a system and then implementing a different system soon after.
- Don’t let appearances sway your decision
Some ERP programs look nice during the initial inspection but then falter when it comes to implementing the features customers need. Alternatively, other ERP programs have a very basic, even boring look, but provide all of the bells and whistles that will help you to streamline your processes. Usability is always more important than appearance.
- Calculate the ROI for each system
Return on Investment (ROI) can vary widely from system to system when you factor in the cost per user, training, support, customization, etc. The bigger, worse system may showcase a lot of bells and whistles, but will it provide a significant enough return to make it more valuable than a slightly less flashy version?
These programs are often expensive and time-consuming to implement and will require significant training before they are ready to go live.
One of the worst business moves you can make is to purchase an ERP software package that doesn’t work for you. Do your research and take your time to make sure that you are getting exactly the features you need at a price you can afford. Choosing an ERP for manufacturing can streamline business processes and integrate departments flawlessly, but choosing the best one for your particular business should not be a decision made lightly.