ERP software companies often stumble over themselves to claim 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 the best for your company?
To answer this question you have to be more specific in your search. To find the best ERP software for a manufacturing company, there are three questions you have to ask:
1. What is the size of your manufacturing company?
A global manufacturer with locations across multiple countries would require a different solution than a small, local manufacturer.
2. What sub-industry of manufacturing are you in?
Some ERP software can only handle discrete manufacturing, others are better at process manufacturing.
3. What is the budget you are 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 estimation for the entire budget of your ERP implementation, covering license cost (or subscription for 5 years), hardware or hosting, consulting services, internal manpower for deployment.
A solid ERP software for manufacturing covers at the minimum the following functionality:
- BOM master data
- WIP calculation
- Work centres 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 also might need to manage serial numbers
If you are a process manufacturing company, then your ERP software also needs to manage
- Recipe 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 might want to shortlist 2-3 software companies that fit your budget based on initial research. In order to do this don’t just think of your current requirements. Do take a longer view and consider your growth plans for the next 3-5 years.
Implementing an ERP solution is a considerable investment of both your money as well as your employees time. You need to map business processes, migrate master data, potentially revise your chart of account, identify new processes, train your team – you get the point. Implementation of ERP software for a manufacturing company can take anywhere from 3 -12 months, and during this time your day-to-day operations also need to go on.
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 neighbour in a similar manufacturing environment.
As an initial step
Select ERP software that is roughly within your budget:
If in doubt, select a product that might need a slightly higher budget – you might be able to negotiate, and you would rather have ERP software with features that you may not need initially, as opposed to an ERP solution that you outgrow within a couple of years.
Pick an international and established player:
As the implementation of manufacturing ERP software is both an expensive and time-consuming project, you would ideally do this only once. Therefore, it is important that the software you choose will be around in many years to come, and can be successfully deployed in other countries if you expand overseas.
Ensure you have sufficient local consulting support:
While the software itself might be fantastic, you will need consultants to help you implement the software and adapt it to your specific business requirements. Moreover, if the consultants are not up to your expectations, you would want the ability to switch to a different implementation or support partner. So, you would want to select a manufacturing ERP software that has a number of independent consulting firms with consultants trained to implement and support your ERP software in your country.
You may not need sophisticated quality management software initially, but you might want this in the future. You also may not be ready to have sensors and automatic production machinery today, but you may want to invest in automation on the shop floor and Industry 4.0 tomorrow. You want your ERP software for your manufacturing company to either to have such functionality already built-in (even though you may not want to deploy it initially) or allow for easy extension down the road.
Once you have selected your top 3 manufacturing ERP software, then you can go into a more detailed selection process. For a detailed selection process don’t be seduced by fancy dashboards and great looking mobile apps, that sometimes gloss over missing functionality.
In order to find the best ERP software for your manufacturing business, you will want to do a mini-prototype, and a fairly detailed demo to ensure the software can handle your business requirements.
What NOT to do:
- Develop lengthy spreadsheets detailing desired functionality by module/department and get potential vendors to state whether their software has this or that feature.
- Get convinced by fancy PowerPoint slides and prepared videos.
- Have your users attend a “look-and-feel” demo and pick software based on initially perceived ease-of-use.
Instead, what you SHOULD do:
1. Get an initial demo for a look and feel of the software and assess “the big picture”.
You would want to verify that the vendor understands your industry and has experience with similar companies. You also want to ensure the ERP software:
- Has been around for many years.
- Deployed ideally globally.
- There is sufficient support locally.
- There are potential references you can talk to.
2. Prepare data for an in-depth demo.
You might want to have an example manufacturing process described, with sample BOM, Routing, process to give to your shortlisted vendors. 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.
This also should give you an opportunity to meet the consultants that will actually be helping you in the implementation. Furthermore, it’s also an important consideration in your selection process.
Next, you would have a good understanding of which of the shortlisted software is your favourite – based on the team that you met, and the functionality available. Now you can get a detailed proposal, which needs to include:
- The modules and the functionality included in the license of the software that you are buying
- The modules and the functionality that will be implemented as part of the project
- A clear “in-scope” and “out-of-scope” description for the services that will be provided
You may be required to run through your shortlisted vendor with the proposal, make sure you understand all the clauses and be comfortable with the scope of work proposed. If in doubt, start small as a first step. Don’t try to solve all your manufacturing problems in one go. You can always extend later, deploy additional functionality or develop further automation as you go along.
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.
Check out SAP Business One – The Manufacturing and Production Module blog to know about the top benefits and features of SAP Business One for the manufacturing module and applications of SAP Business One in the field of discrete manufacturing.