You’ve heard the term Smart Manufacturing or Industry 4.0; but what does that really mean for your manufacturing company? Can a company be “Smart” and use basic software like Quickbooks or do you need to have a real Enterprise Resource Planning (ERP) system? The short answer is: yes, your company needs an ERP system to truly adopt Smart manufacturing and be ahead (or even keep pace) with the competition.
For those still wondering what Smart manufacturing or Industry 4.0 are, don’t worry, the terms are newer and only recently been used in a fairly regular manner. Smart Manufacturing is, simply put, the melding of operations technology (OT) and information technology (IT). Industry 4.0 and Smart Manufacturing are really the newest phase or a new Industrial Revolution if you will hitting manufacturing on a worldwide scale.
In order to remain competitive, manufacturers must invest in inter-connectivity, automation, machine learning, and real-time data analytics.
Holding together various systems needed to properly track and analyze the smart manufacturing data captured, is a strong ERP system, which can marry the shop-floor data with cost breakdowns, operational information, job details, and customer information, etc. I find it interesting how many manufacturers still run homegrown systems or rely on access database, excel, etc to track production, which is clunky, prone to data corruption, and does not collect all relevant data to provide a company with true business analytics.
One of our clients used a homegrown system before deploying Epicor ERP a few years ago. They noticed immediate improvements in inventory control, accurate cost measurements for their products, and better shop floor scheduling. Now, image if the same company deployed machine learning and automation married with real-time data analytic software? The potential to outpace the competition is dramatically increased.
So to get back to the second question, no, Quickbooks or other smaller software systems will not support manufacturers focused on growth since they lack the basic shop floor data collection and analytics needed to streamline your business. Manufacturers that wish to remain competitive, and have an optimized business require an ERP system.
Is your company looking to move away from small accounting systems and move to a manufacturing ERP system? Or do you have an ERP system and need to work on optimizing it? We would love to talk with you about how we can work together to make your business run better.
Internal Planning is Key to Forming ERP Search Questions
Let’s face it, many articles have been written about companies “Outgrowing QuickBooks” or “Signs you need an Enterprise Resource Planning (ERP) system”. But what those articles don’t usually talk about is what you can do to prep your team internally for an ERP software system; a comprehensive sales, finance, and operations system. Planning is one of those words that tends to make people groan because they know it means more work, lots of discussions, and often seems like a stalling tactic and time waster. But ultimately, asking detailed internal ERP search questions is paramount to a successful ERP evaluation and implementation.
If you ask any Military General or Combat Veteran if they would go to battle without some semblance of a plan, they would probably laugh or just walk away and say nothing in response. There is a reason that ERP implementation rooms are nicknamed “War Rooms” since heavy system testing is done and current company practices come into question.
What are some of the right internal ERP search questions to ask for planning purposes? Questions like system design, usability, industry specific functionality, cost, and implementation assistance are just some aspects to consider when looking for an ERP system. I look around on the web, and I find a lot of system questions written by software vendors, but not a lot of internal company questions to ask or considerations that need to be discussed. Having talked and worked with many, many companies over the years during their ERP searches, I wanted to give some examples of planning areas and questions for companies to prep internally.
10 Internal ERP Search Questions to Get the Project Planning Started:
- What does my company need and want to accomplish with an ERP System?
- Departments that need access
- Financial reporting
- Time frame for evaluation purchase, deployment phases/locations, and full usability
- What are the challenges of my company’s current business software? Why is it no longer meeting the needs of my company? Look at this from a department level:
- Production challenges?
- Services challenges?
- Finance challenges?
- Executive/Owner(s) challenges?
- Sales & Marketing challenges?
- Purchasing challenges?
- the Warehouse(s) challenges?
- Research & Development challenges (if applicable)?
- Human Resources challenges (if required as part of an ERP search)?
- Is my company fully utilizing current systems in place and/or is the current software potentially sufficient with added training? (I suggest talking with an expert consultant of that software if its an ERP system to see if the current software works but isn’t being used correctly)
- Does my company have specific compliance or auditing conditions that are of concern? Examples: Medical CFR, Aerospace & DoD DCAA, Medical Records HIPAA, Internal export FCPA, Electronic Underwriters UL, Federal Airlines FAA, Finance SOX etc.
- What are the key aspects of the compliance(s) in relation to software, i.e. what data needs to be captured?
- What do I need an ERP to do in order for my company to meet the compliance? Reporting?
- Do we need a SaaS (Cloud-based) solution, On-Premise (due to data security concerns), or a Hybrid / Hosted System (which combines Cloud & On-Premise in a way)?
- How do we plan to care for the ERP system? Do we have IT Staff in-house to support an On-premise solution or is there an Outsourced IT Firm we can work with to help?
- Do we need a system that will work for 3 years, 5 years, or 10 years?
- How important is “scalability”?
- Modular system to add on functions as a company grows?
- Multi-company or multi-site requirements?
- What are the key functions we need the system to do? Look at this on a department level:
- What does Production need?
- What does Services Need?
- What does Finance need?
- What does Executive/Owner(s) need?
- What does Sales & Marketing need?
- What does Purchasing need?
- What does the Warehouse(s) need?
- What does Research & Development need (if applicable)?
- What does Human Resources need (if required as part of an ERP search)?
- What are the “nice to have” or “wanted” functions, beyond the base needed requirements?
- What does Production want?
- What does Services want?
- What does Finance want?
- What does Executive/Owner(s) want?
- What does Sales & Marketing want?
- What does Purchasing want?
- What does the Warehouse(s) want?
- What does Research & Development want (if applicable)?
- What does Human Resources want (if required as part of an ERP search)?
- What is a realistic budget and ROI for a new ERP system?
- Licensing budget – per month spending (cloud) or fully purchased or financed system?
- Implementation budget (research firms say to estimate 1 to 2 times the licensing budget for implementation costs.
- Software Maintenance, etc. should also be factored into a budget
- Hardware Systems requirement budget (especially important for On-Premise software which basically requires a data center in-house)
- Additional personnel / staffing requirements to support a new system
- What time frame do we expect to see an ROI (Return On Investment)?
Do you have additional questions or looking for more information? Is your company looking for an ERP system? Want to chat with the author? Contact us and we’ll do our best to help.