What is the "Best" Manufacturing ERP software?
ERP software companies often trip over themselves to claim that they have the best manufacturing software. The question is: how do you define the "best ERP Manufacturing Software"?
From SAP to Microsoft, from Odoo, abas ERP, Acumatica to Epicor, Netsuite, Syspro and many others. So, which manufacturing ERP software is really best for your company?
To answer this question, you need to be more specific in your search. To find the best ERP software for manufacturing companies, there are three questions you should ask:
1. What is the size of your manufacturing company?
A global manufacturer with locations in multiple countries will need different solutions than a small local manufacturer.
2. What manufacturing sub-industry are you in?
Some ERP software can only handle discrete manufacturing, others are better at process manufacturing.
3. What budget are you looking at?
A rough guide for this is about 1% of your overall revenue or 20% of your profit - whatever is smaller. This is a good estimate for your entire ERP implementation budget, which includes license fees (or subscription for 5 years), hardware or hosting, consulting services, internal manpower for deployment.
A solid ERP software for manufacturing includes at least the following functions:
· BOM master data
· WIP Calculation
· Work Center and Routing
· Product cost calculation
· Material Requirements Planning (MRP) & consumption-based planning (CBP) options to optimize your inventory
· Ability to manage quality checks before, during and after production
· Integration to MES software, to sensors and other machine data to support Industry 4.0 manufacturing automation
· You may also need to manage serial numbers
If you are a process manufacturing company, then your ERP software also needs to manage
· Prescription management
· Batch Management, Traceability
· Quality Management
Once you have determined your budget and the desired complexity required, then you will still have different options to choose from. To find "your" best manufacturing ERP software, you may want to choose 2-3 software companies that fit your budget based on initial research. To do this, don't just think about your current needs. Take a longer view and consider your growth plans for the next 3-5 years.
Implementing an ERP solution is a sizable investment of both your money and your employees' time. You need to map business processes, migrate master data, potentially revise your chart of accounts, identify new processes, train your team - you get the point. ERP software implementation for manufacturing companies can take anywhere from 3-12 months, and during this time your day-to-day operations will also need to continue.
This makes selecting the best ERP manufacturing software for your company a very important process. And what is "best" for you, may not be the ideal situation for your neighbors in the same manufacturing environment.
As a first step
· Choose an ERP software that roughly fits your budget:
When in doubt, choose a product that may require a slightly higher budget - you may be able to negotiate, and you'd rather have ERP software with features you may not need initially, compared to an ERP solution that you outgrow in a few years.
· Choose international and established players:
Since manufacturing ERP software implementation is an expensive and time-consuming project, ideally you will do this only once. Therefore, it is important that the software you choose will be around for years to come, and can be successfully used in other countries if you expand overseas.
· Make sure you have adequate local consulting support:
While the software itself may be fantastic, you will need a consultant to help you implement the software and customize it to your specific business needs. In addition, if the consultant doesn't meet your expectations, you want the ability to switch to a different implementation or support partner. So, you want to choose an ERP software manufacturer that has a number of independent consulting companies with consultants trained to implement and support your ERP software in your country.
· Consider extensibility:
You may not need sophisticated quality management software at first, but you may want this in the future. You also may not be ready to have sensors and automated production machines today, but you may want to invest in shop floor automation and Industry 4.0 tomorrow. You want your ERP software for your manufacturing company to have such functionality already built in (even though you may not want to deploy it initially) or allow for easy extension in the future.
Once you have chosen your top 3 manufacturing ERP software, then you can go into a more detailed selection process. For the detailed selection process, don't be tempted by fancy dashboards and great-looking mobile apps, which sometimes overlook missing functionality.
To find the best ERP software for your manufacturing business, you will want to conduct mini prototypes, and demos that are detailed enough to ensure the software can handle your business needs.
What NOT to do:
· Develop a long spreadsheet detailing the functionality desired by the module/department and ask potential vendors to state whether their software has this or that feature.
· Get reassurance with fancy PowerPoint slides and prepared videos.
· Have your users attend a "look-and-feel" demo and choose the software based on the ease of use initially perceived.
Instead, what you SHOULD do:
1. Get an initial demo for the look and feel of the software and assess the "big picture".
You want to verify that the vendor understands your industry and has experience with similar companies. You also want to ensure the ERP software:
- It has been around for years.
- Deployed ideally globally.
- There is sufficient support locally.
- There are potential references you can talk to.
2. Prepare data for the in-depth demo.
You may want to have a sample manufacturing process described, with examples of BOM, Routing, processes to provide to your selected vendor. With that, you can have a product demo that replicates your current manufacturing process and should give you a very clear understanding of how the ERP software will work in your specific environment once implemented.
It should also give you the opportunity to meet with consultants who will actually help you with the implementation. Moreover, this is also an important consideration in your selection process.
Next, you will have a good understanding of which of the selected software is your favorite - based on the team you met, and the functionality available. Now you can get a detailed proposal, which needs to include:
· Modules and functionality included in the software license you purchased
· Modules and functionality to be implemented as part of the project
· Clear "in-scope" and "out-of-scope" descriptions for the services to be provided
You may be asked to run your selected vendor by a proposal, make sure you understand all the clauses and are comfortable with the proposed scope of work. When in doubt, start small as a first step. Don't try to solve all your manufacturing problems at once. You can always expand later, deploy additional functionality, or develop further automation as time goes on.
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Once you are comfortable, then you are ready to start the project. Hopefully, you will end up with the best manufacturing ERP software for YOUR company.
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