What Is The Best ERP For Manufacturing?
There are manufacturing enterprises all over the planet, producing a huge variety of products for all types of clients. Each shop floor is uniquely different from the others, and there is no set way to source, make, ship or store a certain product. However, there are several constraints and business processes that manufacturing companies will almost always have in common, and it is important to thoroughly look at these constraints if you are a manufacturer considering implementing or upgrading your ERP software. Every single manufacturer must order something, sell something, and ship something. Determining what the best ERP software system might be for these functions appears relatively easy, right?
You already know that it isn’t, and in fact it shouldn’t be. The unique processes that run right through the middle of every individual manufacturer is what makes buying, selling, and shipping so specific for every single business. After all, you have put serious time and effort into making sure your product is unique and attractive to customers—so it only stands to reason that your workflows be so specific. So, what’s the best process for determining which ERP system is best for your own manufacturing company? Keep on reading to find out!
The best ERP for manufacturing is determined by selecting the right tool for the right job
We’ve written extensively about ERP selection processes before, and stressed the importance of finding the right consulting partner before you begin your implementation. However, when manufacturers want to implement the best ERP system for their business, they must consider a couple of critical variables first. You wouldn’t pick out a screwdriver to hammer in a nail, after all, so you need to figure out exactly which processes are crucial to your business, and the requisite capabilities your ERP will need to have to complete them.
1.) How do the fundamentals work?
The best ERP for your business will be largely determined by what your business will need it to do. If this seems like an obvious statement—it is. However, it is easy to get lost in the vendor selection process and be blinded by all of the special features that savvy salespeople will offer you. This can result in project teams springing for the flashiest system without realizing that it is a terrible fit for their business processes. As we mentioned above, every manufacturing business largely does many of the same things—but that shouldn’t mean that you will be able to force your unique tasks into a single manufacturing system and still expect success. Some ERP systems are more well equipped for traditional manufacturing processes than others; while a certain vendor may be built for process manufacturing, others will suit discrete manufacturing better. Some systems are very rigid and require companies to use them as outlined by the publisher, while others can be turned inside and out and customized to allow for flexibility to your business. Finding the best ERP for your business will depend on just how uncommon or complex some of your business processes are, and if you need a system that will amenable to the changes required to support them.
ERP systems designed specifically for manufacturers come in all shapes and sizes, and often businesses make their selection based on the effectiveness of the vendors sales engineers; rather than the true effectiveness of the software. Pay close attention in when examining the software up front, and when demos are being conducted. Your business should already have mapped out what your desired business processes and outcomes look like as a part of your selection template. Now, the rest of the process is an exercise in ensuring that the software your manufacturing business selects is the best ERP software fit for your desired processes and practices. Software demos only utilize a small portion of company data and workflows—usually the ones that will make the interface look the best. Dive deeper with your potential vendors and, if you’re hiring one, a consulting partner to truly understand the capabilities and limits of all your ERP options.
2.) What are examples of companies that have selected the best ERP system for their business?
Firstly, manufacturers should consider if a cloud deployment is of interest to their organization, or would fit their business model. The Lower total cost of ownership and quick implementations of cloud ERP tend to be attractive to emerging business, for example. If so, publishers like Plex Systems, offer a very dynamic and agile cloud-based ERP that is tailored specifically to manufacturers and the challenges they face on the shop floor everyday. It is both designed for the manufacturing industry, and agile enough to be customized to meet desired processes.
On the opposite side of the spectrum, Dynamics AX is an ERP software system designed for small and mid-sized businesses that offers both cloud and on-premise deployments according to a business’ needs. Dynamics AX is far more rigid than something like Plex, but offers more elementary functionality and less complexity. This type of solution (among others) can be a good target for smaller businesses with a desire to keep their ERP on-premise.
A fair— and wide — middle ground between options like Plex and Dynamics AX may be something like Epicor 10, SAP, Oracle, Sage x3, or Infor Syteline. These software systems offer both on-prem and cloud-based deployment, and do a good job of servicing a wide variety of manufacturing business types. Each has individual functionalities that may make them a better fit for your business than others. For example, SAP is known to be a good fit for very large businesses, but is sort of overkill for small and mid-sized business. An improper fit can cause a lot of headaches during implementation; as there are a lot of decisions to make when you fit a large-scale ERP into a small or medium-sized business, and these decisions cost money. A solution like Epicor version 10 is the exact opposite. It is a very flexible solution that can be turned inside and out with specific coding and development customization to meet the needs of a wide variety of enterprise in the small and medium-sized manufacturing space, and offers a diverse offering of deployment options. However, it can be very difficult to scale to a large manufacturer. Businesses that have tried this often fail, and the costs are significant. When planning, and selecting, for an implementation, the project team needs to take into account not only current business needs, but also future goals in terms of growth, capability and production numbers.
Ultimately, selecting the best ERP software vendor is much more about your manufacturing company than it is about the software publisher. Always prioritize the business process over the software. The beginning of a selection process should be as much about understanding what your business is (size, processes, complexity, desired outcomes) than what kind of software you need.
Who can I trust and how do I validate my selection?
This is often one of the great barriers that most manufacturers must overcome when breaking free from costly legacy software. Every vendor you speak with will tell you that XYZ ERP is the best ERP system for your business. Not only that, they will have a savvy sales engineer ready to back up all of their promises with flashy demo designed to show exactly how their ERP can do everything you want it to do—and why you need to shell out the money for the newest customizations.
The truth is that the demo-software system you’re seeing would never work for your business, and probably looks very little like how your ERP will end up looking come go-live. It’s a test system, no better than a freshly installed instance with 0 zero data. What matters most is how your business can take the software and absorb it into all of your desired business processes and outcomes. That demo system is not actually doing the things it needs to do for your business, it’s just performing some of the functions. This means that manufacturing businesses should spend considerable time asking vendors which elements of their system will need to be customized and configured (and to what degree), and which features will act as demonstrated out of the box. Often these questions can get to core of just how well aligned an ERP system is to your business, and how to find the best ERP for their specific needs.
Once you’ve asked these questions, and been through the demo, your company should have a strong understanding of what each system can provide. Often a third party consultant can offer a lot of value in this area; as selecting the right system for your business can be a very valuable investment.
Companies should also consider what opportunities a new system may offer them long term that they may not have known about previously. For example, Plex Cloud ERP comes embedded with a dynamic MES system for manufacturers. This could be a great addition for manufacturers with smart machines on the shop floor. This may allow a manufacturer a rare opportunity to capture machine data in new and meaningful ways. However, for businesses without any IoT-enabled machines, this feature adds no value (unless the company plans to add some in the future).
Understanding and being able to demonstrate the short-term and long-term value of your ERP system is critical to understanding and measuring ROI. Seeing how the ERP software system will align with your business processes, and what additional functions it provides that could add value to your business, are the non-negotiable steps that will help manufacturers ensure ROI is measured properly (and is achievable).
In theory, your business may on surface operate the exact same as all other manufacturing business; but in actuality, and in the crucial details, it’s totally different. You may do all the same things, but no business does them exactly alike, and that’s part of the reason why there is no one ERP system on the market. Those differences are really what determines what the best ERP system for your business actually is. The size, complexity of processes, value of added features, and requirements of your business are just some of the major factors that are at play.
If you’re considering a new ERP system, you should read some of our ERP system comparisons, download our guide, and download our implementation e-book. This is of course assuming you’ve already downloaded our ERP selection template. If you’d like more information we invite you to contact us for additional support in your ERP selection journey.