Manufacturing Software
Small Business BuyerView | 2014

Every year, Software Advice speaks with thousands of organizations looking for the right software solutions to manage their manufacturing processes—giving us unparalleled insight into the needs of today’s software buyers. We recently analyzed a random sample of these interactions with small-business buyers (from companies with annual revenues of $100 million or less) to uncover their most common pain points and reasons for purchasing new software.

For expert insight on these findings, we spoke with Ian Chizmar, co-founder of I-Track, LLC, which builds custom manufacturing information systems for small to midsize businesses (SMBs). We also spoke with Leah Peene, who serves as database, enterprise resource planning (ERP) and information technology (IT) manager at KLN Manufacturing, a custom furniture manufacturing company.

Key Findings:

  1. Forty-five percent of the prospective buyers we spoke with were using paper and other manual methods, such as Excel, to manage processes.
  3. Material requirements planning (MRP) accounted for 36 percent of all the manufacturing software solutions requested.
  5. A need for better planning/management tools was the top reason prospective buyers were seeking software solutions.

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Manual Methods Outweigh Software Use

Forty-five percent of the prospective buyers we spoke with were managing their manufacturing operations using manual methods, which mainly included pen and paper, Excel spreadsheets and Quickbooks.

Twenty-three percent of prospective buyers were using manual methods alongside non-manufacturing software solutions, such as customer relationship management (CRM) software or ERP solutions not specific to manufacturers, for their business operations. Most of these buyers were dissatisfied with the software they were using, and were seeking more specialized solutions with increased automation, tracking and reporting capabilities.

Ten percent of prospective buyers were using commercially available, manufacturing-specific software, and 9 percent were using multiple software solutions to manage day-to-day manufacturing processes.

Prospective Buyers’ Current Methods

Prospective Buyers’ Current Methods

A handful of buyers were using accounting software (5 percent) or various other non-manufacturing software solutions (4 percent) to manage their operations. A select few were using proprietary manufacturing software (2 percent) developed in-house. Finally, 2 percent of buyers were using “other” solutions, such as outdated software or programs they didn’t know the name of. One percent were using nothing at all.

Peene believes the large percentage of buyers using manual methods is due to the fact “that most small-business manufacturing companies are afraid of the costs of relevant software solutions and do not understand how valuable such solutions would be for them [in the long run].”

However, many of the buyers in our sample noted that they wanted to move away from using manual methods because the amount of information they had to input had become increasingly difficult to handle—leading to errors, duplicate entry and loss of valuable time performing tasks that software could have easily taken care of. The cost of remedying these issues, it seems, has overtaken the cost of implementing software for many buyers.

Material Requirements Planning Tops Software Requests

Many of the prospective manufacturing software buyers we spoke with wanted solutions that facilitated planning around inventory, purchasing, labor and production: thus, MRP accounted for 36 percent of all requested software.

Close behind were manufacturing execution systems (MESs), which made up 30 percent of software requests. These suites primarily manage production and shop floor operations and typical applications include work-in-progress reporting and production and labor tracking.

Product lifecycle management (PLM) suites accounted for 15 percent of software requests. PLM suites allow individuals across a company to collaboratively make decisions about specific products at each stage of the life cycle; in other words, it helps organizations work together to design, produce, support or retire the products in their pipeline.

Manufacturing accounting suites made up an additional 12 percent of requests. We found that it was relatively common for businesses to solely use accounting software to manage their operations, which may explain the increasing prevalence of this application in most manufacturing suites.

Business intelligence accounted for 2 percent of requested software, and the remaining 5 percent accounted for “other” requests, such as manufacturing-oriented CRM or ERP suites.

Top-Requested Manufacturing Software

Top-Requested Manufacturing Software

Chizmar believes that “with an ERP suite, you lose a lot of niche capabilities and customization options,” because many ERP solutions are not specific to the manufacturing market. He notes that many buyers simply don't understand what type of software will best meet their needs, but notes that the best options for most buyers in this industry are specialized suites, such as MES solutions.

Despite the fact that there is some overlap in functionality between MES and MRP suites (e.g., inventory control), they perform different primary roles. Simply speaking, MES suites aid in optimizing manufacturing operations (such as materials and process traceability and quality control) as well as shop-floor processes.

MRP suites, on the other hand, help with production planning and inventory control as it relates to the management of manufacturing resources (e.g., materials purchasing). The degree of overlap between MRP and MES solutions is continually increasing, as more MRP solutions can perform tasks typically associated with MESs and vice versa.

Better Planning/Management Tools Top Reason for Seeking Software

Thirty-one percent of the prospective buyers we spoke with were seeking new software because they needed tools that would better help them plan and manage day-to-day manufacturing operations.

Close behind was the need for software with a better user experience, cited by 27 percent of buyers. They reported that their existing software was slow and “buggy,” and had compatibility issues, poor customer service and limited customizability, among other issues.

Top Reasons for Software Purchases

Top Reasons for Software Purchases

Additional reasons for seeking new software included an overarching need to improve efficiency and organization (26 percent); the fact that manual methods were proving ineffective (9 percent); the need to improve accuracy and reporting (3 percent); and poor accounting functionality in their current software (3 percent).

Almost All Buyers Want Integrated Suites

Almost every one (98 percent) of the prospective buyers we spoke with wanted an integrated suite, versus a best-of breed application (1 percent) or multiple software solutions (1 percent). An “integrated suite” is a bundled package of different, yet related, software applications, while ”best-of-breed” refers to the best stand-alone software application within a particular category or for a particular market.

Peene believes that “an integrated suite is more appealing, because best-of-breed solutions will not always fit the dynamics of certain companies and their manufacturing processes.” In other words, while best-of-breed software may be well suited for specific types of companies, integrated suites have broader functionality, which may benefit a larger variety of businesses.

Integration Preferences

Integration Preferences

Chizmar adds that it is obvious that buyers would prefer “one system that handles everything versus having multiple solutions which they have to integrate.” However, he notes that some companies may opt for one or more best-of-breed solutions in order to have more granular flexibility and customization options.

Most Buyers Want to Implement Within Three Months

Most prospective buyers wanted to implement software solutions relatively quickly. Eight percent of buyers wanted to implement a software solution in less than one month, while 38 percent had a time frame of one to three months. Close behind were the 31 percent of buyers who sought to implement software in three to six months.

Prospective Buyers’ Time Frames for Implementation

Prospective Buyers’ Time Frames for Implementation

A smaller amount of prospective buyers were looking to implement software solutions in six months or more, with 12 percent of buyers willing to wait between six months and one year. Finally, 11 percent had “other” timelines, which were longer than 12 months or of a vaguely defined nature.

Those With a Preference Prefer On-Premise Deployment

Overall, 83 percent of prospective buyers did not yet have a deployment preference. Of those who did, however, 85 percent wanted on-premise software, while 15 percent wanted Web-based software. This stands in contrast to software buyers' preferences in most other markets, where they tend to highly favor Web or cloud-based software, also commonly referred to as SaaS (Software as a Service).

Regarding SaaS, Peene believes that for many small-business manufacturing buyers, “it can be very scary signing up for something that you don’t have full control of … [with on-premise deployment,] there is the added appeal of companies being able to manage the system themselves.”

Deployment Preferences

Deployment Preferences

Chizmar adds that “it all comes down to how much money you want to spend on the infrastructure and ongoing support. With SaaS, you pay more money over the long term, though you pay a lot less up front. Often, indecision primarily stems from security and cost concerns, but your data is as secure in your own data center as it is in someone else’s data center. There are pros and cons either way, be it cost, security or control.”


Our data shows that while many small manufacturing businesses are using manual methods, frustration with manual processes is leading buyers to consider purchasing manufacturing-focused software solutions. These will come in handy given the current reshoring trend in the manufacturing market, as the right software solutions can help businesses streamline core processes and operate more efficiently.

Prospective buyers listed MESs and business intelligence (BI) solutions amongst the types of software they were looking to adopt. MESs have long been valuable to manufacturing operations, and IndustryWeek noted the incorporation of “big data” within the manufacturing market as a major trend for 2014. Thus, vendors that could combine these types of functionality would be serving a growing need in this market.

Indeed, Chizmar notes that “data visibility is becoming increasingly important for small manufacturing businesses. I have yet to see an MES that provides a built-in reporting interface that rivals any of the best BI tools out there. ... A game-changer would be [an MES with] solid BI tools [and] a super-rich reporting platform.”

In the same vein, while adopting software solutions that are well-suited to small manufacturing businesses clearly has its advantage, Peene warns that “the key [to finding the right solution depends on] how customizable the solution is, and that it is not overly robust for the size of your company. If you do not have a clear idea of the solution you need to address your pain points, overly robust software is a big loss and ... [makes it] easy to get confused.”


Software Advice regularly speaks with organizations that contact us seeking new manufacturing software. To create this report, we isolated a random sample of 385 interactions with small-business buyers (those from companies with annual revenues of $100 million or less) from 2013 and 2014 to analyze. It should be noted that these findings exclusively represent those buyers who contacted Software Advice for guidance on software selection; they may not be indicative of the market as a whole.

Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.

If you have comments or would like to obtain access to any of the charts above, please contact

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