Prodware was recently asked to contribute to an ERP selection for manufacturers article. We took the opportunity to expand on the topic set by The Manufacturer and how those professionals within manufacturing firms need to prepare when looking at investing in a new business management solution.
Preparation is everything
When manufacturers are evaluating an ERP solution, we believe the first questions should not be what features or functions will a new system provide but more about:
- Why are we doing this?
- What are we wanting to achieve?
- How can we measure success?
In our experience, the organisations who have had the most successful ERP implementations and the best return on their investment of money, time and resource; are those that have entered into the selection process with a clear picture of exactly what they want to achieve and be able to document this expectation.
ERP systems aren’t all the same but without knowing what is required, how do companies know if the ERP system has been delivered? In my experience, both the manufacturer and the IT partner should document the above questions, in order to measure success.
Having a clear Project Statement when making an ERP selection for manufacturers will help avoid repeated mistakes, which means that the selected solution is the right fit for a business.
This Project Statement will include the successful outcomes of the specific functionality they are looking for.
Critical requirement example for process manufacturers
I have seen situations where process manufacturers have made a decision to evaluate a new ERP system in order to improve process execution and maximise production flexibility, using clear and detailed formulation definitions.
BOM vs recipe/formula functionality
In searching the ERP market, these companies received the impression that, when it comes to ERP functionality, a Bill of Material (BOM) is the same as a Recipe or Formula, but I would dispute this way of thinking. While they serve a similar purpose, they are not the same nor are they interchangeable.
This is an extremely common misconception among manufacturers and can result in buying the wrong ERP, thereby creating even more issues. A BOM does not normally require the additional and extended attributes associated with each batch.
In this case the key manufacturing capability of this part of the ERP is to find a good process manufacturing module which includes detailed formulation/ Recipe definition functions as standard.
With the right process manufacturing module in place, manufacturers should be able to define the additional resources that are consumed and produced as part of the production process. As a process manufacturer you need the ability to define your products as simple recipes/formulas or if necessary, the flexibility of complex recipes/ formulas, which help to define the component/ingredient relationships. Depending on your industry needs and the products you produce, there are other factors which have to be taken into account for example:
- The management of Co & By products
- Variants and alternative routing
Additional functionalities for process manufacturers
For this industry where manufacturers more often than not use liquids, chemicals or food products that require specific handling, measurements and protocols; the ERP system needs to address functionality such as:
- Catch Weight
- Advanced Quality Control
- An efficient process to manage New Product Development.
Importance of ERP scalability and integration
As well as the right features and functions, any evaluation is also about the scalability of the solution and its longevity – ask yourself where is this solution going? Is there a roadmap and life expectancy?
Technology is now playing a massive part in our daily lives at home and at work, such as BYOD (Bring Your Own Device) playing a huge part.
Important questions to ask also include, does the solution you are evaluating work through a standard web browser, on my tablet or smart phone? Or how does this solution embrace and integrate with other standard office solutions such as Microsoft Office and even the wider Microsoft technology stack?
Prodware can help with ERP selection for manufacturers
Finding the right ERP system for your business, makes it much easier to measure success, as long as you ask the right questions. Manufacturers are setting themselves up for failure if they try to fit a proverbial square peg in a round hole, because they are being advised by a partner with limited experience or functionality in process manufacturing or they are looking at cheaper “vanilla” ERP which are false comparisons.
If these questions are answered clearly and concisely, your investment will be a long term solution, resulting in a higher return on investment.
The Manufacturer article can be found here, but for more information about Prodware‘s specific ERP solution for process manufacturers, please contact us.