Enterprise Resource Planning (ERP) for Manufacturers
Enterprise resource planning (ERP) is a type of business management software that allows an organization to use a single system to manage functions such as accounting, procurement, project management, risk management, and compliance. It is designed to integrate and automate these functions, providing a comprehensive view of the business and helping streamline processes.
ERP software is typically implemented across an entire organization and can be used by different departments and teams to manage their specific functions and responsibilities. For example, the finance department might use the software to manage accounting and budgeting, while the procurement team might use it to manage vendor relationships and purchase orders.
Some key benefits of using ERP software include increased efficiency, improved data accuracy and visibility, better decision-making, and reduced operational costs.
Despite ERP software’s many benefits, there are still manufacturers in North America that have not adopted it, preferring to continue using software such as Excel and Accounting Software that is sub-optimal for integrated management of backend processes. The reasons for this range from lack of awareness and fear of change to perceptions that their company is too small or that that the software is too expensive and complicated. That said, the number of manufacturing companies in North America that don’t use ERP software is steadily declining.
ERP software for make-to-stock manufacturing (MTS)
Make-to-stock (MTS) manufacturing is a production method in which products are manufactured in advance of customer orders, based on forecasted demand. The finished products are then kept in inventory until a customer places an order, at which point the product is shipped from the inventory.
In make-to-stock (MTS) manufacturing, an ERP system can help manage the production process, inventory levels, and supply chain.
It can also help track the costs associated with production and monitor the efficiency of manufacturing operations. ERP software can help MTS manufacturers manage the entire MTS process, from forecasting demand and planning production to managing inventory levels and fulfilling customer orders.
ERP software for make-to-order manufacturing (MTO)
Make-to-order (MTO) manufacturing is a production process in which products are made based on customer orders, not produced in advance and kept in stock. In MTO manufacturing, an enterprise resource planning (ERP) system can be used to manage the process of receiving customer orders, scheduling production, tracking progress, and delivering the finished product.
Some key features to look for in an ERP system for MTO manufacturing include:
Create and track customer orders, including relevant details such as delivery dates, quantities, and customizations
Schedule production based on the availability of resources, capacity, and delivery dates
Plan for the resources and capacity needed to meet demand, including the ability to model scenarios based on different demand levels and production configurations
Track raw materials, work-in-process (WIP) inventory, and finished goods, and ensure that you have the necessary materials on hand to meet production requirements
Support quality control processes, including the ability to track defects, track non-conformance, and manage corrective and preventive actions (CAPA)
Supply Chain Management
Manage relationships with suppliers and track the flow of materials through the supply chain
Key benefits of ERP:
1. Increased efficiency
2. Improved data accuracy and visibility
3. Better decision-making
4. Reduced operational costs
Choosing the best ERP for your manufacturing business
Selecting the optimal ERP platform for your business is a critical process. The number of options is daunting and the differences between platforms are significant. You must carefully consider factors such as the size of your organization, the complexity of your operations, and your budget when choosing a system.
Many companies thinking about adopting an ERP platform don’t have in-house ERP experts capable of choosing the best software for their company, not to mention providing onboarding and ongoing guidance about add-ons and upgrades. Fortunately, there are ERP consultants with the expertise you require for both platform selection and onboarding. Choosing the right consultant is key to choosing the right platform. If your company is serious about incorporating an ERP system, it’s incumbent upon you to do your due diligence on ERP consultants—who, it must be said, will also end up assessing you to determine whether you’re a good match for them.
Onboarding an ERP platform is a challenging exercise, the goal of which is to transform your company’s processes. Yes, change can be hard, frustrating and stressful, but resisting it by selecting a particular system because it fits your existing processes is a huge mistake. A good ERP consultant will ensure that you don’t fall into that trap. But be forewarned: onboarding ERP software is like surgery; though it’s ultimately rejuvenating, it usually involves some degree of pain.
Six S Partners is an experienced ERP consultancy with team members across North America. We’re a certified Epicor partner and certify our staff with the same rigorous courses and curriculum that Epicor uses for its staff. We have an enviable track record of success. As you conduct your search for an ERP consultant that inspires confidence, please consider us. We’d be honored to speak with you. To get the ball rolling, click here to take that first step.