The right manufacturing ERP software will give your shop a competitive edge by increasing operational efficiency, shortening order cycles, and making it easier to open new revenue streams. The right manufacturing solution can help you understand and control your processes to make the business run more smoothly.
You’ll get a feel for the range of software options suited to your manufacturing business in this buyer’s guide. Topics we cover include:
Manufacturing ERP software is a tool meant to prevent machine downtime and improve upon the quality and efficiency of the products being created by your shop employees. Sometimes known as MRP software, most manufacturing software tracks your purchased materials as well as current stock levels to ensure you always have what you need on-hand and don’t have to wait on materials to come in to start a new order. Manufacturing systems can also keep records of works-in-progress and finished products.
Manufacturing ERP software covers a wide range of applications and functionalities and can be thought of as an industry-specific ERP software. The tools available for managing the manufacturing process can be even more varied depending on the type of manufacturing software your business needs.
Over 70% of buyers listed purchase planning, demand forecasting, and master production scheduling as required features in their manufacturing software search. Manufacturing ERP software buyers also look for functionalities not specific to their manufacturing process as well. This includes 60% of buyers looking for accounting and order management, and 54% of buyers wanting purchase order capabilities.
Manufacturing ERP software for production planning and scheduling helps estimate the quantity and timing of material and labor inputs you need to complete jobs as efficiently as possible. This is typically used for made-to-order/engineer-to-order/custom products and large amounts of small or limited runs of products.
When businesses refer to a manufacturing ERP software, they are referring to a material resource planning solution, or MRP software. This type of solution provides purchase planning, demand forecasting, and overall shop floor control. Some will also include business management applications such as accounting, human resources, and payroll.
Some operations may think MRP means “manufacturing ERP”. In reality, MRP stands for material resource planning. Over time, businesses started to refer to any manufacturing products as “MRP”, which has blurred the lines between what the software truly is, if it’s a general manufacturing software, or a complete ERP software.
There are varying levels of manufacturing systems and MRP software. A more simple and basic solution may provide just the basic of material resource planning, and require the use of an integrated accounting software to handle purchasing. A more advanced solution will be identical to an ERP system in the sense that it provides a fully integrated option.
|MRP||Provides complete integration and visibility of the order to cash process. Includes purchase planning, production planning, demand forecasting, shop floor control, and equipment maintenance scheduling. Ties in with a broad range of functionalities including accounting (for monitoring job costs and purchase orders for proper inventory control) and order processing (demand forecasting).|
|MES||Improves performance and quality with functionalities like scheduling, corrective action guidance, and shop-floor control. Typically purchased as a standalone software to be used alongside MRP systems.|
|Inventory Management||Keeps track of the on-hand physical inventory levels of raw materials and finished goods for manufacturing production orders.|
|Quality Control||Includes features like compliance control, risk analysis, quality objectives, workflow management, monitoring and reporting, parts non-conformance, corrective action management, and approval management to ensure regulatory compliance and reduce the risk of defects and errors. This functionality can be offered within most MES systems.|
|Bill of Materials||Provides instructions on the materials and assemblies needed to manufacture a product.|
A manufacturing management software solution will improve your manufacturing operations via a strong supply chain management. The supply chain process starts with a strong production management tool.
Some companies may refer to themselves as a manufacturing ERP software, which simply means it’s a manufacturing solution that can handle a variety of tasks.
Decision-makers for manufacturing companies are looking to gain better visibility into key performance indicators both in the back office and on the manufacturing floor. After all, it is difficult, if not impossible, to improve processes that you aren’t able to measure.
An integrated manufacturing accounting software program provides the ability to share critical operational information across the enterprise. Synchronizing manufacturing controls with purchasing, sales, and receivables gives you the ability to appropriately plan production runs, meet delivery dates, order inventory without over or under-stocking, and forecast future revenues and expenses.
While many service-based companies can rely on carving out a local market, manufacturing companies typically compete on a regional, national, or global level. For manufacturing companies, the pressures of the global economy require a constant commitment to establishing competitive advantages.
Manufacturing accounting software systems provide a systematic approach to data management that allows for the discovery, refinement, and adoption of best practices across the operation. The ability to increase profitability relies on reducing costs and lead times, utilizing technology to bring products to market faster, and leveraging information resources to manage advanced services such as return, warranty, and repair programs.
Access to technology that fosters business growth without the costs associated with adding staff or risky asset investments has never been more important than now. Consequently, picking the right integrated manufacturing accounting software is crucial. To ensure the survival and growth of your company, it is imperative to identify the manufacturing ERP software programs providing the lowest possible total cost of ownership with the quickest return on investment. Which software package you select is likely to be one of the most critical capital expenditure decisions your manufacturing company will make.
The price of manufacturing software varies greatly depending on the functionalities you need, the size of your business, and the industry you’re in.
Other factors that affect price include:
A less expensive software, such as something intended for small businesses, will likely start at $49/month and includes production planning and scheduling, basic inventory management, and shop floor tracking. The tool may not provide accounting but can integrate with popular programs such as QuickBooks Online and Xero.
A more expensive software would be a full ERP solution build exclusively for manufacturers. These solutions will vary widely depending on the deployment:
The best manufacturing software will provide automation to your manufacturing process via an equal mix of inventory management, production planning, shop floor control, and job costing. However, given how broad the term is, many options will fall under what is considered to be a manufacturing program. There are:
Some examples of the most widely used manufacturing software options include:
|Business Type||You need:|
|Apparel and textile manufacturers||Includes an apparel matrix inventory system for organizing products by size, color, and style variants, as well as planning for apparel lines and seasonal products to help manage when products should go on sale or be produced for an upcoming season.|
|Food and beverage manufacturers||Helps comply with FDA, cGMP, and HACCP standards. Also includes food traceability, quality assurance, recipe management, ingredient tracking, and recall tracking.|
|Chemical manufacturers||Assists in tracking and reporting compliance with regulatory agencies including the FDA, EPA, DEA, ATF, and FSIS. Features recipe management, quality assurance, inventory storage planning, expiration tracking, and recall management.|
|Medical devices manufacturers||Will meet ISO 13485 standards including implementation of a quality management system, risk management, statutory and regulatory compliance, process validation, product traceability, and recall systems.|
|Pharmaceutical manufacturers||Manage tracking ingredients and products, quality control, regulatory compliance standards, and research and development.|
|Job shops and machine shops||Provides accurate estimates, plans material and equipment requirements, and determines ROI on your custom and made-to-order projects.|
|Discrete manufacturing||Manages the production and assembly of distinct individual products that can be counted.|
|Process manufacturing||Combines your machines, tools, and resources to maximize efficiencies in your formulas and recipes. Common in the food/beverage, chemical, and pharmaceuticals industries.|
QuickBooks Enterprise is referred to as an alternative to ERP and is a common solution for smaller manufacturing businesses as well as wholesalers. However, many manufacturing companies outgrow QuickBooks, finding they need support beyond core accounting including:
The top three QuickBooks replacement for manufacturers found in our recent survey include:
There can be headaches involved in finding out which option will work best for your business. Manufacturing ERP software solutions can also help alleviate many issues that come about in your manufacturing processes. Some examples include:
Keeping up with ever-changing technology is a challenge for many manufacturing companies. It may seem like as soon as you get caught up on one solution, something even more advanced comes out. The Internet of Things (IoT), automation, and augmented and virtual reality are expected to continually advance and become more commonplace over the coming years. According to Manufacturing Global’s article “Top 10 Manufacturing Trends for 2019”, “It is widely accepted that the Internet of Things (IoT) market is growing at an exponential rate and becoming the norm for many, with 3.6B connected devices used for daily tasks this year. In 2019, we can expect this growth to continue to spread.”
There are thousands of types of manufacturing software solutions out there, and most of those can be further customized, making finding the right system a daunting task. Start by looking at industry-specific solutions and narrow down your search by comparing the functionalities with what your business needs. You should also keep in mind features that you will need in the future as your business grows - you can find a solution that lets you add modules on later when you expand.
Some manufacturing ERP software developers want their solutions to be fully integrated and all-inclusive for your organization. If you’re going to keep an existing system like accounting software, you’ll need to find a solution that easily integrates with what you have.
If you’re using an outdated manufacturing software system, it could be coded in an old language that’s no longer used by most developers or the developer might no longer support it. You’ll find it more expensive and difficult to find someone to assist you if problems arise with the software.
Technology is always changing in the world of manufacturing. Today, software developers are always looking for a new way to incorporate this new technology into their solutions.
Additive manufacturing and new technologies now allow manufacturers to build parts and products that were once deemed too difficult to make. The additive manufacturing market value is projected to grow over $6 billion by 2022 according to MarketWatch.
According to Manufacturing.net’s article “10 Ways Cloud Computing Will Drive Manufacturing Growth in 2018”, “global spending on Cloud Enterprise Resource Planning (ERP) software is predicted to increase from $19.1B in 2017 to $28.8B in 2028”. Cloud software makes it possible to see real-time data from anywhere, allowing staff and technicians to access important data like customer and order information.
The use of specialized technology in the manufacturing industry has been growing steadily. According to Forbes’ article, “The Future of Manufacturing Technologies, 2018”, the “top technology investment areas for manufacturers include advanced analytics, cloud computing, modeling and simulation, Internet of Things (IoT) platforms, and optimization and predictive analytics.” Forbes also reports that spending on advanced robotics is expected to grow from $92 billion in 2016 to $225 billion in 2021.