Is it Time to Change Your Manufacturing ERP System?
Selecting a new manufacturing ERP system that is right for your business requires that you know it when you see it. What are the essential steps to ensure you choose the system that is full-featured enough for your business complexity while staying within your budget? We strongly advise you to involve a manufacturing software ERP expert like us to guide you through the options. Manufacturing software experts like us can help ensure you meet your requirements and find a solution that's easy to use while minimizing operational complexity and staying within your budget. Here are tips to help you know when you have found the right-sized manufacturing ERP solution for your company.
1. Identify Specific Success Metrics
The first question to ask when setting out to select the right-sized manufacturing system is “What do I want to accomplish?” The more specific you can be when shaping your answer, the more likely your new software is going to meet your specific needs. Here are several examples:
- Reduce my inventory holding costs by at least 10%
- Plan my production 3 to 6 months ahead
- Build only as needed
- Avoid critical item shortages
- Ease the burden of performing annual physical inventory
- Coordinate production with Sales
- Avoid late raw material deliveries
- Avoid purchasing material before I need it
- Know which vendors perform best
- Organize my bills of material
- Identify and eliminate obsolete raw materials
- Establish multiple sources for critical components
- Include manufacturing activity in financial statements
The list of objectives will be different for every type of manufacturer. For example, better coordination with Sales will be crucial to Make-To-Order manufacturers, but far less important for Make-To-Stock manufacturers, and completely unnecessary to Job Shops.
No matter your manufacturing process, most objectives will fall into three categories.
- Immediately affect your company’s profitability
- Ultimately produce indirectly measurable financial results
- Have no practical or financial metric, but will improve your company’s efficiency and operations.
2. Immediately Measurable Objectives
It is important that you can justify and can measure return on investment. If your CFO is involved in selecting your new manufacturing system (which is highly recommended) then the inevitable question that will be asked is “How long will it take to pay back a system like this?”
That’s why you’ll see a number of your objectives designed to yield an immediately measurable return on investment (ROI). Systems offering expected ROI in less than 36 months are very attractive. Payback in the first year is unusual, but there are solutions in this price range.
For example, a new manufacturing system can enable a 25% reduction in your inventory holding costs. Using your current lender's interest rate you can easily calculate the potential pay-back period.
3. Indirectly Measurable Objectives
Often overlooked are the benefits created with the adoption of a more modern manufacturing system. Most companies set out to reduce costs, but realize cost reductions indirectly as well. For example, how long can you hold off new headcount if many of today’s manual tasks could be automated?
Consider updating the cost of finished goods every time the costs of raw materials changes (known as cost rollup). If you have several levels of sub-assembly, you can see that this task becomes so time-consuming to be nearly impossible at scale. Manufacturing ERP software like MISys Manufacturing can roll up your costs in seconds with the highest accuracy. No more manual entry means no more chances for human error.
The process required to migrate in a new manufacturing control system will require many people to re-examine, re-evaluate, and re-establish processes, policies, and procedures. This Activity all by itself leads to more efficiency which can help profitability indirectly.
Impossibly Measurable Objectives
Any manufacturer knows the anxiety of fulfilling orders on time. Those ship dates are promises to customers, so how do you actually quantify the cost of breaking a promise?
If an ounce of prevention is worth a pound of cure, then it’s critical to look for a manufacturing ERP that will help you deliver on your promise in the future. Ideally, you’ll want a solution like MISys Manufacturing which includes features to help you ship on time every time, such as:
- Inventory tracking
- Production management
- Materials requirements planning
- Cycle counting
- Stock transfers tracking
Keep Your Existing Accounting Software
Keep the accounting software you have now, but add the manufacturing software you need to support manufacturing. You can use your existing accounting software to manage customer-facing processes such as customer records, sales orders, sales inventory, accounts receivable, accounts payable, general ledger, etc. MISys Manufacturing integrates seamlessly with the most popular accounting software - QuickBooks Online or Desktop, Sage 50 US, Sage 50 CA, Sage 300 and Sage Intacct.
Then, you can use MISys Manufacturing software to manage the "back of the house," everything related to manufacturing: bills of material, raw material inventory, production scheduling, purchasing, etc. MISys maintains a subledger of all of the manufacturing costs which automatically syncs with the accounting subledger. These transactions are easily auditable and are done automatically - no double data entry is required.
MISys Manufacturing is a cloud-based and on-premise manufacturing solution designed for small and mid-sized companies. Companies in the electronics, food and beverage, aerospace, defense, chemicals, health and beauty, medical devices, pharmaceuticals and transportation industries use MISys to run their manufacturing processes efficiently.
WHY DO MANUFACTURING COMPANIES
TRUST THE MISYS EXPERTS AT TRIVIUM?
Trivium Technology, Inc. has over 25 years of experience providing ERP and Managed Services for growing companies across New England, New York, and New Jersey. Our team specializes in accounting and manufacturing software sales, service and support to small and medium-sized manufacturing companies. We are certified value-added resellers (VARs) for MISys® manufacturing and Sage 100 software. We are also Lenovo Premier Partners, Intuit® Solution Providers (QuickBooks® Enterprise), and Managed Services Providers for IT services. When you work with Trivium, you will get a tailored ERP solution for your unique business with the flexibility and functionality to scale up to meet the demands of your clients. We partner with our clients to manage all business system requirements to free up your time and resources to spend working in the business.
Contact us today! Visit our website, call 978-219-2500 or email to find out how MISys manufacturing ERP can help your business.
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