In this guide, we review the aspects of Erp Software For Manufacturers, types of manufacturing software, manufacturing erp software small business, and best manufacturing software for small business.
Erp Software For Manufacturers
types of manufacturing software
Manufacturing is a complicated business. A lot of elements have to function together coherently in order for operations to flourish and the needed goods to be created.
As you know, the scale of production is often determined by the availability of raw materials. Additionally, inventory levels need to coincide with demand otherwise you risk understocks and lost revenue opportunities or oversupply and unnecessary costs. Finally, when you’re ready to ship your products, the supply chain can be affected by a myriad of external factors.
Well, with so many manufacturing processes at play, how can one ensure efficiency and success? Implementing manufacturing software that automates and simplifies various tasks is definitely one of the main approaches. However, it can be difficult to identify the specific types of software needed for a manufacturing company.
Hence, in today’s post, we will take a broader look at the various types of manufacturing software and how they can help your business. Before we start, it’s important to mention that some of the solutions we cover have similar functionalities and deliver alike benefits. Naturally, this means that you won’t be needing all of the tools we outline below. Let’s get started.
1. ERP Software
One of the most common software types for manufacturing companies to rely on are definitely ERP systems. These tools are used to manage day-to-day business operations, including production, accounting, procurement, project management, compliance, supply chain monitoring, and more.
Typically, a manufacturing ERP system increases organizational efficiencies and reduces costs by optimizing the use of company resources. This is achieved thanks to the technology’s ability to provide visibility across disparate manufacturing areas and allow them to be managed from a central platform.
All in all, it’s pretty safe to say that ERP software is practically a must for the manufacturing industry. Since it helps manage so many areas of the business, it can be a real savior for many companies.
2. Manufacturing Execution Systems
Another important solution type is a manufacturing execution system (MES). This one is mainly concerned with monitoring the production process by tracking real-time data in order to optimize outputs. Specifically, an MES can help allocate resources across production stages, develop optimal schedules, deliver visual shop floor representations, and help managers identify potential issues.
Generally, this type of software is used by production managers, shop floor supervisors, and other staff members that might be involved in the process of goods creation. Often, an MES needs to integrate with an ERP solution so that information about production and materials can be effectively merged with data from other business areas.
So, if you want an efficient production planning software for manufacturing, an MES is the right fit for you.
3. Product Lifecycle Management Tools
A product lifecycle management (PLM) tool can be an important technology for manufacturers to leverage. Especially for those looking to effectively manage product data throughout its lifecycle.
Overall, these types of solutions serve as centralized hubs for all information related to initial product requirements, item parts, manufacturing documents, engineering change orders, quality workflows, and the like.
So, if you want to acquire a holistic view of product development — look no further. With a well-developed PLM solution, you’ll be able to quickly boost productivity and ensure your goods are always of top-notch quality.
4. Statistical Process Control Solutions
For manufacturers, few things are as damaging to the business as a poor product. Often, it is a result of a mishap during one of the production processes.
To avoid issues, some turn to statistical process control (SPC) software. It employs industry-standard methods for real-time quality control throughout manufacturing processes. Essentially, SPC scrutinizes data from various product and process-related measurements to identify if there are any unacceptable variations that need to be corrected.
Thanks to SPC software, productivity is maximized, quality is improved, and costs that rack up from dealing with defective products are reduced.
5. Computer-Aided Manufacturing Software
The fifth type of software you might be interested in is computer-aided manufacturing (CAM). These solutions take computer-aided designs that specify material types or dimensions and convert them into information that machines can actually use to create a finished product.
All in all, CAM software allows you to manufacture goods directly from a design, instead of manually setting up machinery and operating it. As you can imagine, it’s typically used by production managers and shop floor employees who are eager to embrace solutions that help save time and reduce potential errors.
6. Enterprise Asset Management Software
Companies from asset-heavy sectors like construction, energy, and manufacturing are always looking for convenient ways of monitoring their holdings. To that end, enterprise asset management (EAM) software can help.
You see, EAM systems allow manufacturers to manage and analyze the performance of all the physical, company-owned assets. Thus, easing the process of overseeing equipment health and ensuring proper maintenance. Typically, these solutions are great for large enterprises that have an extensive range of assets to be controlled.
Additionally, some companies are employing connected devices and merging the data they collect with artificial intelligence in order to forecast equipment failure before it occurs. Naturally, this helps avoid unnecessary losses associated with machine downtime and fixing costs. Moreover, within industrial manufacturing, IoT-powered software is getting particularly popular, with some companies leveraging it to monitor assets from afar.
So, now that you know what enterprise asset management software is, it might be time to truly consider implementing it into your organization. If you don’t have an in-house development team — don’t worry. Instead, try collaborating with experienced specialists who will be able to guide you through the entire process.
7. Computerized Maintenance Management Systems
Maintenance software is crucial for manufacturing. After all, everybody wants to avoid broken down assets that prevent efficient production.
So, some companies turn to computerized maintenance management systems (CMMS) which are similar to the above-mentioned EAM software type. However, despite having comparable capabilities, CMMS are focused on maintenance specifically, not asset management across a variety of business functions.
So, a CMMS centralizes maintenance-related information and simplifies the process of keeping equipment in top shape. With this software, the utilization of machinery, vehicles, plant infrastructures, and other assets can be optimized. Thus, leading to higher efficiencies and lower costs.
8. Inventory Management Solutions
Effectively managing inventory levels is crucial for any organization that’s in the business of selling some type of goods. Hence, manufacturing companies are frequent buyers of inventory management software.
In short, these types of solutions provide real-time inventory data while automating the process of stock tracking, product reordering, and warehouse management. This in turn helps increase profitability by reducing out-of-stocks and minimizing overproduction.
9. Supply Chain Planning Tools
Supply chain planning tools take stock level coordination and logistics a step beyond ordinary inventory management solutions.
This type of manufacturing software encompasses pretty much everything to do with the delivery of goods to customers. They help detect supply chain issues and suggest how they can be avoided with minimal losses. Additionally, these tools can forecast supply and demand in order to optimize planning and delivery schedules.
Overall, with well-developed supply chain monitoring software, you’ll gain end-to-end visibility into how your shipping is carried out and find ways of optimizing the entire process.
10. EHS Software
In manufacturing, regulatory compliance is of utmost importance. Whether it’s about ensuring employee safety and wellbeing or monitoring manufacturing effects on the environment — there are various laws that need to be adhered to. Here, environmental health and safety (EHS) software can come in.
So, what is EHS software? Overall, EHS solutions serve as central hubs for storing and analyzing any and all information pertaining to work health and safety, waste outputs, and sustainability. They help manufacturers keep track of hazardous materials, perform inspections, and stay on top of relevant environmental metrics.
As a result of employing EHS management software, your company can reduce workplace risks, decrease waste generation, and stay compliant with all the important regulations.
11. Job Shop Management Software
Job shop management software is typically used by small manufacturing firms who don’t want to invest in large ERP systems. After all, the functionality of these two types of solutions is quite similar.
With job shop management software, you’ll have the opportunity to manage sales and purchasing, inventory, low-scale production, and maybe even accounting tasks. However, you should keep in mind that this software isn’t a common choice for large enterprises.
12. Administrative Tools
Finally, we’ve reached the last manufacturing software type that we’ll discuss today — administrative solutions. However, here we’d like to point out three distinct categories that can also be present across a variety of other sectors. Chances are high you’re already familiar with them, but we couldn’t wrap up this article without mentioning these tools.
manufacturing erp software small business
Choosing new software can be difficult for any business. In addition to the cost, founders and decision-makers must research the software’s reputation, assess its capabilities across a wide range of desired functionality, and choose a software that will meet company needs without having an enormous learning curve.
They must also choose between cloud-based vs hosted options and assure that they purchase a balance of licensed seats for the right mix of users.
For large enterprises, much of the groundwork can be done by in-house IT staff while the cost is spread over a large product base to minimize the impact on the company. But for small manufacturing companies with 10-200 employees, these challenges are magnified.
Smaller companies are often at a disadvantage and IT professionals may not be on staff. Additionally, the extensive capital outlay for new systems may not be feasible for smaller manufacturers. As a result, the business owner or decision-maker risks choosing a system that is too weak or too strong, or one that has such a deep learning curve for already overtaxed staff that full functionality may never be realized.
If these challenges are real for the selection of any critical software, it is especially true when a company reaches scale and complexity and finds itself in need of a robust, right-sized ERP system. And if the challenges exist for selecting critical software for a singular functional area, then those challenges multiply for an important decision involving a software system that will drive most, and in some cases all, of a company’s core business functions for many years.
MRP systems and ERP systems
To make the best choice among existing platforms, it is best to first understand the difference between an MRP and an ERP. An MRP, or Manufacturing Resources Planning system, is a production-focused control system that encompasses production planning, scheduling, and inventory of components, raw materials, and other parts or assemblies required to produce finished goods. Specifically, an MRP system ensures that material and equipment are available for production and allows for the planning of any associated purchasing.
An ERP, or Enterprise Resource Planning System, has all the elements of an MRP for production, shop floor control, and purchasing; but it also provides systemized management and data analysis for financial and sales functions, all optimized for a manufacturing environment. An ERP system will include financial integration of functions such as Accounts Payable and Accounts Receivable, Customer Relationship Management (CRM), fixed asset monitoring, and other key administrative and financial functions. This allows for the integration and management of all company functions and leverages automation and real-time data analysis to improve the performance of the company.
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Benefits of ERP systems for small enterprises
There are many benefits to implementing an ERP system for a small company. For one, the company may need to replace an older system or one that was manually managed since the early days. Many small businesses often use cobbled together systems or legacy applications brought over by staff from previous jobs. An ERP system can replace an older system with increased functionality and analytics to allow accurate and best practice materials management throughout the company.
Secondly, an ERP system can eliminate “fragmentation”. Fragmentation occurs when a company uses numerous software systems from department to department to accomplish the initial growth experienced by the enterprise. The problem arises when the company scales and product offerings and manufacturing volume begin to exceed the combination of different systems’ capabilities for providing organization and control of production processes as well as back-office functions.
In many cases, fragmented software systems may not “talk” to one another, and reporting between the systems may have to be manually reconciled. As manufacturing volume increases, an ERP system can eliminate fragmentation, integrating the material and business controls into a single platform with real-time data and analytics.
Finally, a company may have diversified its product line with new and more complex iterations that explode the associated bill of materials required to produce. This bogs down the planning and purchasing required to feed the bill of materials and introduces inefficiency into the operation that extends throughout the manufacturing process. An ERP system can process the data and provide clear, organized, and automated functionality to manage core business functions and operate manufacturing efficiently and with the right level of material availability.
Top manufacturing ERP systems
Regardless of a company’s reason for pursuing an ERP system, today there are a variety of options available for almost any industry and for companies of varying size and complexity. Tier I ERP providers such as SAP and Oracle have traditionally serviced companies with revenues above $200 million, although SAP now has a version for small to medium-sized businesses as well. Tier II ERP systems generally service enterprises with $20-$200 million in sales and less than 200 users. And Tier III ERP systems generally focus on companies with under $40 million and with 5-30 users. To help choose the right ERP system for a growing small manufacturer, here is a look at the Top 6 Tier II and Tier III ERP providers available today for small manufacturers.
This Tier II provider offers a platform for any manufacturer with over $1 million in sales. It is also flexible in that the core functionality of the basic ERP can be augmented through the purchase of additional modules a la carte. This provides companies with the option of purchasing only what they need with the flexibility of adding additional modules later. Epicor offers production management, supply chain management, and scheduling as well as financial management. The platform offers manufacturers the ability to utilize make-to-order, configure-to-order, and make-to-stock shop floor control and manage it all within the out-of-the-box software functionality. The system is easy to customize and is scalable. It is also compatible with all mobile devices.
Epicor also offers a Quality Performance Management (QPM) module that is not often found in other ERP systems. This type of module is often only obtainable through ISVs (Independent Software Vendors) in competing vendor platforms.
Some downsides include a common complaint about slow customer support. It also has limited flexibility in invoicing and order modifications and does not offer any standard integrations but does have an open API on demand. It also has a very limited import and export functionality, an oddity given that Microsoft import/export capability is available in most of its common products. In the case of Epicor, import/export can be done only through the purchase of an ISV add-on.
The system can be delivered on-premise, hosted, or as a cloud-based SaaS application. While Epicor does not disclose pricing, estimates are around $175 per user per month after implementation costs.
Microsoft Dynamics 365 Business Central
This Tier II provider is often included in Tier I as many companies are giving it a look for use within larger enterprises. Microsoft Dynamics 365 Business Central offers the name recognition of Microsoft along with a strong ERP platform that includes operations, financial accounting, project management, CRM, and purchasing. It also offers a field service option for companies that have extensive field technician operations and wish to integrate those actions into the managed ERP platform.
While Business Central does have considerable core functionality out of the box, it may require the utilization of ISVs for specific workflow programming needs. And for companies with complex processes, these ISV add-ons can add considerable cost to implementation. However, it is a strong product and has the ability to be customized for each customer.
Negatives include editing limitations among several modules and patchy integration with some external applications by 3rd party providers. And while it can be customized for many industries it might take a lot of time to get used to. Business Central ERP implementation also requires that adopting companies partner with a certified partner company for programming and deployment. This adds cost and places the adopting company one step removed from the actual provider.
Microsoft Dynamics 365 Business Central is deployable both on-premise and as a cloud-based application and can be hosted on Microsoft’s own cloud platform. Business Central can be purchased as a one-time payment or as a subscription. Cost per user after infrastructure and implementation costs is $70 per user per month for the Essentials plan and $100 for the Premium plan. It is important to note that implementation costs for Business Central could go into tens of thousands of dollars.
best manufacturing software for small business
Finding the right ERP software for your small manufacturing business is crucial to your efficiency and growth for a number of reasons. The right ERP system can help transform supply chains by providing visibility, automation, and control like never before, and can help rapidly scale your brand and optimize current systems without a huge spend. Almost every aspect of small manufacturing business can benefit from enterprise resource planning (ERP) software, which streamline many facets of your company within a single program, including:
ERP systems can work wonders, but many small businesses tend to dread the idea of scouting and implementing new technology. With so many diverse and complex manufacturing-specific systems, which one ERP is best for your small business? In this guide, we’ll help you understand a few core considerations of choosing a new ERP software, with advice tailored specifically to small businesses across multiple manufacturing industries. Additionally, you can reference our Manufacturing ERP Systems Buyers Guide.
Top 5 Reasons to Upgrade to ERP Software
Before we get into the details, let’s cover a little bit about the benefits of good manufacturing software. Of course, the primary reason for switching to one of the top ERP systems is financial management. Indeed, the right system will provide you with measurable cost-saving capabilities while simultaneously helping to optimize your business processes, making them more efficient and economical than ever. But there’s much more to the story. Here are some compelling reasons to upgrade to ERP software:
ERP Provides Real-Time Data
Analytics are vital to any industry that wishes to adapt to the ever-changing needs of the consumer and the industry. One of the best parts about a good ERP is that it tracks data across many departments that you probably currently treat as separate entities, providing you with in-depth analytics so that you can tweak as needed to get the best possible results. This also helps you see how different functions affect one another.
ERP Enhances Customer Service
One of the things that many small businesses notice right away when starting out with an ERP is accuracy. With detailed visibility of inventory, materials, progress, scheduling, and shipping, there’s a much lower risk of error and disgruntled customers. Did you know that 90% of online consumers, according to a recent study by Business Wire, actively monitor their shipment status daily? The right ERP software can provide you with accurate, automated order tracking for a happier consumer experience, not to mention accurate inventory updates.
ERP Reduces Costs
All of these benefits work together towards one main goal — cost savings. A well-chosen ERP can save you money by reducing error, keeping customers happy, preventing inventory surplus or deficit, tracking expenses and write-offs, and reducing operational costs by automating and monitoring all of your company’s finances. Of course, a system that saves you and your employees time will also save you big bucks by allowing you to allocate labor elsewhere.
ERP Helps Grow Your Business
At the end of the day, growing companies need more of everything, including labor, warehouse space, time, and marketing. Most manufacturing software solutions work hard to optimize what you’ve already got and make space for more. For example, the right ERP could help you take advantage of your warehouse space so that you can store more goods without having to extend your facility’s footprint or invest in more storage. In short, they’re all designed for scaling businesses.
ERP Streamlines and Simplifies
Offering a real-time view of all your main processes under a single system, an ERP platform streamlines and simplifies many of your company’s operations. For many businesses, this means downsizing from various software solutions to a single one that puts all your primary functions under one umbrella. It also creates a central, company-wide hub that requires only a single software training for all departments.
Consideration No. 1: Your Current Process
Ask yourself: How Am I Currently Managing My Business?
Did you know that over 70% of small manufacturers plan to make technological investments in 2022 to improve business processes and efficiencies? Many seeking to implement a new ERP system are doing so to replace their own homegrown systems. If you’re looking for a more advanced, tailorable solution that goes beyond QuickBooks, Excel, and other programs that you’ve grown out of, now is the time to implement ERP software. The good news is that most of these ERP products are set up to help you transition from more basic and limited solutions to full-featured ERPs, so your current system will help you decide which software is best.
For example, when switching from QuickBooks to ERP, you’ll want to select software that’s compatible with QuickBooks, so you don’t have to spend a ton of time rebuilding databases from scratch. Note that various systems make switching from Excel to ERP a breeze. If you want to maintain any current databases or historical data, make sure that you choose an option designed to make the transition as simple as possible, specifically for Excel users.
Consideration No. 2: Your Specific Production Process
Ask yourself: What is My Manufacturing Mode?
To narrow down your selection even further, it helps to select your software by the manufacturing process. There are ERP solutions that are engineered specifically for precise manufacturing modes, such as discrete, process, and mixed-mode manufacturing, as well as a light assembly (kitting), professional services, engineering to order (ETO), make to order (MTO), repetitive (make to stock), job shop (shop floor) and industrial or wholesale distribution.
While choosing software that is not mode-specific may work just fine, depending on your specific business and industry, it does help if you have unique tools that support your manufacturing mode. For example, if your company practices process manufacturing, your ERP should have additional management functions that help you plan, sort, and produce formula-based goods, with additional solutions to simplify process-specific requirements, such as lot-traceability and meeting federal compliance standards. Another example would be companies in the Metal Fabrication industry searching for Steel ERP related features.
Consideration No. 3: Your Industry
Ask yourself: What Are the Specific Considerations of My Industry?
In addition to manufacturing mode, ERP systems are also categorized by the industry in which they serve. Again, this can help simplify certain company-specific considerations — for many businesses, the primary considerations here are industry regulations, security needs, and safety laws — to help ensure that every industry challenge is taken into account with your software selection. For example, if your business specializes in producing parts for the aerospace industry, you’ll have to consider many things that may not affect businesses in other industries, such as compliance with ISO AS9100 standards.
While just about every industry should consider selecting software that has been developed specifically for their realm, it’s more important for some than others. Those in aerospace and defense, agriculture, automotive, chemicals, food and beverage, consumer packaged goods, energy, health and medical devices, petroleum and coal, industrial machinery, transportation, pharmaceuticals, and biotech should take special consideration in choosing industry-centric ERPs to ensure compliance and safety across all processes.
Consideration No. 4: Costs
Finally, you need to determine a budget for your ERP. This sounds simple enough, but costs can be somewhat deceptive in any major software integration. What you really should be considering is the ROI of your ERP. The up-front cost of manufacturing software implementation varies widely, from $4,000 to over $1 million, but this isn’t the cost you should be concerned with. Instead, you should think about the up-front spend minus your potential returns to determine the ROI of the transition.
One of the big things small businesses need to consider cost-wise is licensing. There are two primary types of license fees when it comes to ERPs — on-premise ERP (typically paid with a large, one-time licensing fee) or cloud-based/SaaS ERPs (typically paid for on a per-user, per-month basis). Because they’re paid per user, cloud-based ERPs are often a smarter, more cost-effective solution for companies that have fewer employees or who only need to give out licenses to a small group of workers. Both options should accommodate for scale, should your business need room to grow.
Top 6 ERP Systems for Small Manufacturers and Businesses
As you can see, selecting the right ERP is really a complex but critical business decision, and there is no one-size-fits-all approach to finding the right manufacturing software. With that said, the following ERP Systems are some of our most popular and flexible options for small businesses, and they are all worth your consideration. Note that all of these solutions can be licensed either on-premise or on the cloud, but we are showcasing them as cloud-based (SaaS) systems, as this is typically the best option for smaller businesses.
Using Top10ERP to Find the Right Software
We hope that after giving all of these considerations some thought, you’ll be nearer to making a decision on which ERP to choose. With that said, we know that this guide isn’t all-encompassing, so we offer an assortment of tools that make the selection process a breeze. We invite you to use our Best-Fit Comparison Tool to be paired with the top software based on a certain set of criteria.
Here at Top10ERP, we’re happy to help you with your selection process and offer customized recommendations directly from our trusted advisors. It can be very helpful to speak with an experienced advisor to learn better which specific systems fit your individual business goals and processes. What’s more, we truly enjoy speaking with the many manufacturers who trust our advice, as we are always learning more about what is impacting industries during a constantly changing world of manufacturing. Please let us know what further we can provide you throughout your search.