An ERP system is arguably the core infrastructure of any manufacturing operation. It connects every function within the organization providing all the required data to drive the business efficiently, productively and profitably. It can handle customer orders, customer relationship management, plan purchases, plan production, manage inventory, run accounting, manage HR functions and provide comprehensive reporting tools. Every operational activity can be monitored in real time.
If your current ERP system doesn’t do any of the above then it’s time for an upgrade. If your current ERP system does do all the above, but slowly, inefficiently and inaccurately, then it’s time for an upgrade. If you run a manufacturing business and don’t have an ERP system, it’s time to get one.
But finding the solution that meets your specific requirements can be challenging. To assist you in your search we have compiled 10 steps below that if taken, will guide you on the path to choosing the right ERP system for your manufacturing business.
Step 1 – Identify the problems you need to solve
For example you might be managing your inventory on spreadsheets and manually transferring your inventory data to your accounting system. It takes time, it’s error-prone and it’s an unproductive use of staff who could be adding value elsewhere. The solution would be to have a system that seamlessly integrates inventory and accounting, which an ERP can provide.
But don’t stop there. Undertake a review of all your business processes. Are there any processes that require manual or double entry? Are there any that could be improved with automation? Do you need faster and better reporting? Do you struggle to meet industry compliance requirements?
Summarize the results with a cost benefit analysis. Do the benefits outweigh the cost? If so it’s time for step 2.
Step 2 – Get buy-in from the key stakeholders
Executive management and key stakeholders need to be motivated to change and participate in the evaluation process. The cost benefit analysis undertaken in step 1 will be of considerable help to get them on board.
It is also a helpful argument when persuading stakeholders that ROI does not come purely from cost savings. It can also come from performance improvements resulting in increased customer and satisfaction and greater ease-of-use also improves employee satisfaction and retention.
Step 3 – Appoint an internal product champion
Preferably a stakeholder and someone who is motivated and excited at the opportunity to play a pivotal role in on-boarding a new ERP system.
Step 4 – Make sure the system is “future proofed”
As mentioned previously ERP is core infrastructure and needs to be resilient enough to grow with the company. Look for a flexible, open and modular system. It needs to play well with others, for example integrating with suppliers for “just in time” (JIT) manufacturing or using EDI to integrate with customers.
Is the system modular enough to accept new functionality based on the latest manufacturing advances?
Is the system scalable? Can it grow as your business grows?
Step 5 – Make sure the system offers mobile access
Is the mobile access just a link to a desktop web browser or is it an application built from the ground up and designed to complement the desktop version? The latter is what you look for. You want users to be as productive on smart phones and tablets as they are on desktops in the office.
Step 6 – Make sure the system is easy to use
A manufacturing ERP system will have a wide range of users from shop floor to top floor. It is essential that the interface be logically structured and intuitive to use. A well designed interface will result in increased employee satisfaction and increased productivity.
Step 7 – Choose your deployment option wisely
You may be offered a choice of on-site, cloud or a hybrid deployment solution. Cloud solutions have matured to the point where the benefits far outweigh those of an on-site solution.
- Upfront expense is minimized as cloud-based systems usually operate on a pay-as-you-go scenario
- IT staff overhead is minimal as maintenance and upgrades are handled by the vendor, the software is always current
- Cloud-based systems are infinitely scalable
Step 8 – Verify the training and support options the vendor provides
Have your vendor initially train a handful of key personnel throughout the organization. They will become internal trainers and support staff. Their efforts will complement the vendor’s efforts and their availability will be much better.
Develop a training schedule with your vendor and commit the time of your staff to the training. There is no point investing time and resource into implementing a new system if nobody knows how to use it!
Step 9 – Choose a vendor who understands your business
Do not choose a vendor who overwhelms you with tech speak when selling the benefits of their solution. You want to work with a vendor who understands the challenges of manufacturing. Someone who knows the problems you are trying to solve, and can frame their solution accordingly.