For decades, ERP software has helped manufacturers streamline operations and maximize efficiency. It’s the signature benefit of a system that’s chock-full of them.
The modern ERP landscape barely resembles that of the past, however, as systems evolve to emphasize flexibility, customization and integration over the big, clunky ERPs of yesteryear. This has helped small and midsize manufacturers enter a market previously reserved for larger enterprise organizations.
But at the same time, without any sort of ERP functionality checklist, it can be hard for upstart manufacturers to confidently identify which features they need—and when they need them.
In this new era of postmodern deployment and piecemeal integrations, manufacturers should keep the following top of mind:
By adopting only essential features during implementation, and adding more desired functionality as they grow, manufacturers can more effectively manage their ERP integration initiatives.
Here’s what we’ll cover:
Needs Cycle for ERP Software [Graphic]
3 ERP Software Features You Need to Start
1. Financial management
2. HR management
3. Inventory management
3 ERP Software Features You Need to Grow
4. Customer relationship management
5. Project management
6. Supply chain management
3 ERP Software Features You Need to Optimize
7. Data collection and analysis
8. Manufacturing planning
9. Enterprise asset management
What are my next steps
3 ERP software features you need to START
These features are for small teams (two to 10 software users) just getting started with ERP software.
1. Financial management
What it does: ERP’s financial management component records and processes all your business transactions, with real-time insight into the financial health of your organization. This includes fundamental accounting operations like general ledger, accounts payable and receivable, and fixed-asset tracking.
Why you need it to start: Your core financial data is the lifeblood of your business—and the foundation for any ERP system. Manufacturers with a detailed record of their financials can use this data to create budgets, forecast future revenue, and devise growth strategies.
2. HR management
What it does: The human resources component—or, human capital management (HCM)—automates core HR processes like payroll and benefits administration. It also helps manufacturers track personnel, evaluate performance, attract new talent, and manage employee training.
Why you need it to start: Small manufacturers without an in-house HR department can use this functionality to manage, grow and optimize their workforce. Through its use of automation, ERP’s HR management helps to keep these routine processes lean and efficient.
3. Inventory management
What it does: ERP’s inventory management solution helps manufacturers maintain the optimum amount of supply at all times, avoiding the risk of surplus or shortage. The system tracks the amount of on-hand supplies, with automated triggers for replenishment once the amount dips below a certain threshold. It also alerts you the moment it detects a surplus, so you can make the necessary adjustments in a timely fashion.
Why you need it to start: An organized and efficient inventory management system will save your business from having to constantly monitor and adjust inventory levels, which can significantly disrupt your manufacturing workflow. This, in turn, leads to improved efficiency, consistency, and customer satisfaction—all of which can be a boon for your bottom line.
- Postmodern ERP strategies give manufacturers the freedom to integrate the software that best fits the individual needs of their business. When selecting an ERP, aim for a solution that can help your small manufacturing business maintain agility and flexibility as you grow.
- ERP implementation is a notoriously risky endeavor—one that requires thorough research and planning. This implementation checklist can serve as a guide for your business.
- Evaluate vendors based not only on their current functionality, but how they plan to leverage emerging technologies like AI and automation in future software updates.
3 ERP software features you need to GROW
This section is for teams that need to manage increasing workloads associated with a growing customer base.
4. Customer relationship management
What it does: Customer relationship management (CRM) is home to all your client data, with automated processes for contact information, lead generation, and interaction tracking.
Why you need it to grow: By consolidating customer information into a single database, ERP’s CRM component gives manufacturers a holistic view of the customer lifecycle and the tools they need to harvest client relationships.
5. Project management
What it does: With an array of tools designed to help businesses plan projects, manage tasks, and allocate resources, project management applications are tried and true solutions for staying organized and increasing productivity. In other words, it’s a centralized workspace that harvests collaboration across multiple teams and departments.
Why you need it to grow: As manufacturers grow their workforce and client base, the sheer volume of projects will escalate commensurately. A well-defined project management solution will help your business stay on schedule and on budget—so you can effectively manage your objectives while meeting (and often exceeding) the increasing demands of your client base.
6. Supply chain management
What it does: Your ERP’s supply chain management (SCM) module aids in the planning and execution of supply chain processes, helping manufacturers effectively meet the needs of the customer. By streamlining the procurement of raw materials and optimizing inventory levels, SCM helps to reduce production costs and ensure the timely delivery of goods.
Why you need it to grow: An efficient supply chain is a must for manufacturers, especially those with limited resources and finite budgets. With SCM, growing businesses can better anticipate demand, source more strategically, and plan production cycles using concrete data.
- Scalability should be a key consideration in evaluating ERP software. To grow your manufacturing business, you need tools that support your growth strategies while offering consistent functionality as the volume of data increases.
- Business models can change as an organization matures, which often puts pressure on more rigid ERP initiatives. Consult your vendor to identify software integrations and tweaks to the underlying architecture that will keep your system agile as your business grows.
- Devise a change management plan as you use your ERP to implement growth strategies. This should include a heavy emphasis on new-user training, as well as a communications plan to keep employees apprised of ongoing changes and give them the resources they need to be successful.
3 ERP software features you need to OPTIMIZE
This section is for companies with multiple sites and assets that require large-scale optimization strategies to reduce production costs.
7. Data collection & analysis
What it does: ERP’s advanced data analytics provide an in-depth glimpse into the performance of your organization. With an array of highly customizable reports and dashboards, the data analysis component offers comprehensive insight into big-picture metrics and how each individual process depends on the others.
Why you need it to optimize: ERP analytics data gives you the intelligence you need to take your business to the next level. Gartner’s 2018 Tech Trends Survey found that 59% of manufacturers are reaping the benefits of business intelligence—a number that will continue to grow as the technology becomes more commonplace.
It’s easy to see why: With ERP analytics data, manufacturers can assess key performance metrics and make informed business decisions. Whether it’s forecasting future demand, assessing lead times, or optimizing production costs, ERP analytics give manufacturing organizations comprehensive insight into the current performance, future outlook, and interconnectivity of business processes.
8. Manufacturing planning
What it does: The manufacturing planning component of an ERP is designed to optimize the production process based on the availability of materials, labor, and machinery. It starts with a manufacturer’s bills of material, then uses the ERP’s AI and automation technologies to forecast lead times, assess machine capacities, and generate production schedules—ensuring a streamlined itinerary through each stage of production.
Why you need it to optimize: In the manufacturing business—with its many production stages—planning is critical. ERP software weighs all relevant data points to find the most efficient utilization of resources.
9. Enterprise asset management
What it does: Enterprise asset management helps business track and optimize the maintenance of machinery, spare parts, and other production-related equipment. Through advanced automation and intelligent asset analysis, manufacturers can identify necessary repairs, generate corresponding work orders, and track the status of maintenance upgrades through a single ERP module.
Why you need it to grow: As a manufacturing business grows, it puts a lot of stress on the shop floor. A single overused machine has ripple effects throughout the entire production process, throwing off timelines and decreasing the quality of output. Enterprise asset management offers countless benefits that’ll keep your operations running at full steam.
- To get the most out of your ERP dashboards, confer with team leaders to establish your business’s key performance indicators and track only the most integral data points. This infographic on ERP reporting metrics for manufacturers should serve as a logical starting point.
- ERP’s predictive maintenance capabilities help manufacturers increase responsiveness and automate service procedures. ERP solutions that use AI-based predictive maintenance technology can save your business as much as 40 percent on repair costs and eliminate unplanned downtime.
- Consider allocating resources for data collection and analysis, establishing a foundation for longevity in an increasingly data-driven manufacturing industry.
What are my next steps?
While there’s no one-size-fits all approach to manufacturing, the ERP solutions above should serve as a roadmap for success. Ultimately, the nature of your system will depend on your business objectives. Once you’ve established your short- and long-term goals, you can you make informed decisions about which ERP functionality is right for your organization.
Here are some resources to guide and inform your decision-making process:
- At some point in your journey, you’re likely to experience workflow challenges that ERP software is uniquely equipped to solve. This success story details a Kansas City-based candle manufacturer customized their ERP to overcome workflow inefficiencies.
- Our comprehensive listing of more than 160 ERP products, complete with ratings and reviews from actual users, can help you evaluate product functionality.
- As always, we encourage you to speak with one of our industry-leading software advisors, who are ready and willing to help you find the right ERP solutions for your manufacturing business. For a free 15-minute phone consultation with a real-live expert, call (855) 998-8505.
