A company can do much more than just control its costs and maximize the profitability of its manufacturing cycles with a manufacturing software control system that monitors those cycles. No one system will be perfect for every company. Each manufacturer should consider which attributes are critical for its specific manufacturing processes, and then select that the best ERP system that is the best match for those processes. Consideration of one or more of the following attributes within the context of its own business will tell each manufacturer which ERP system to adopt.
1. Does the business need a system that controls raw material supplies to match manufacturing processes?
A director at the medical device manufacturing company, Facet Technologies, noted that Facet saved significant inventory holding costs after it adopted a simple manufacturing ERP system. Companies like Facet that consume greater amounts of raw materials can impair profitability by devoting too much free cash to maintaining a raw material inventory. The best ERP system for manufacturing processes for this type of company maintain the leanest raw material inventory possible with just-in-time deliveries of those materials that minimizes costly raw material storage costs.
2. Does the business want to tie manufacturing into its finance and accounting functions?
A company has to pay vendors for raw materials and collect payments from purchasers. A good ERP manufacturing system will interface with the company’s financial operations to provide real-time data on incoming and outgoing shipments to enable finance managers to handle cash flow in a more timely manner.
3. Do the business’s manufacturing processes require significant manpower and employee scheduling?
Manufacturing lines that are employee-dependent are best managed with an ERP system that has a human capital management interface. This interface will help managers to schedule employees, to track hours worked and wages earned by those employees, and to generate reports on scheduling effectiveness and employee efficiency.
4. Does the business utilize project-based manufacturing output?
The best ERP system for a business that has output which is a function of specific projects rather than commoditized production-line processes will include raw material resource and human capital allocation modules that can be combined to form a composite picture of each project. Accounting and cost-tracking functions will allow the company’s finance department to manage cash flow and to improve the profitability of each project.
5. How do sales and marketing interact with the business’s manufacturing function?
Sales and marketing information that feeds back into a company’s manufacturing function will allow a company to determine what resources it has and what it still needs to keep sales channels fully stocked. Manufacturing ERP systems that include sales and marketing interfaces are a good choice for companies that manufacture large numbers of the same products. The system alerts the company when sales are down and inventory is building up. It also alerts managers when sales are strong and products in a manufacturing pipeline are in short supply, thus allowing managers lead time to ramp up manufacturing.
6. Is the manufacturer in a highly-regulated environment?
Manufacturers that need to comply with regulatory burdens will appreciate an ERP system that generates required reports and data to monitor product quality and prospective defects. Those reports allow managers to minimize manufacturing downtime and to reduce or eliminate product recalls that might result from those defects.
None of the benefits of any manufacturing software control system that are reflected in these attributes will accrue to the manufacturer without proper planning, training, and implementation. The best ERP system for manufacturing companies will be naturally determined with that planning.