How to Find the Best Manufacturing ERP System
Did you know your manufacturing business generates massive amounts of data every day? Everything from raw material costs to production schedules to customer orders counts as data, but you need the right system to organize this information. An enterprise resource planning (ERP) system can make all the difference. Let’s learn more about how a manufacturing ERP system can help you find efficiencies, make critical business decisions, and drive growth.
What Is an ERP System in Manufacturing?
An ERP system for manufacturing is a comprehensive platform that integrates all your business processes into one unified database. This centralized approach connects your shop floor activities with back-office functions like accounting and customer management.
ERP systems in manufacturing evolved from the material requirements planning (MRP) systems of the 1960s, which focused on inventory management. Today’s ERP software has expanded to include quality management, supply chain optimization, and regulatory compliance tracking.
Why ERP Is Essential for Manufacturing
The digital transformation, plus increasing pressure to deliver customized products faster while maintaining strict quality standards, have made manufacturing ERP systems a necessity rather than a luxury. Companies can no longer compete effectively using manual processes and disconnected systems. They need the real-time coordination that only an integrated ERP system can provide.
Over the past decade, manufacturers who adopted comprehensive ERP solutions have seen benefits like improved inventory accuracy, reduced lead times, and better customer service. Without an ERP system, you risk falling behind competitors who can respond more quickly to market changes.
Key Features of Top ERP Systems for Manufacturing
So how do you find the best manufacturing ERP system? Focus on features that address production environment challenges in addition to basic features like bills of materials, like the following.
Real-Time Data and Analytics
Real-time data collection gives you immediate visibility into every aspect of your manufacturing operations, including machine performance, production rates, inventory levels, and quality metrics. This instant access allows you to identify bottlenecks before they impact delivery schedules and spot quality issues early in the production process. Look for solutions that connect directly to your shop floor equipment and automatically updates as production events occur.
Production Planning and Scheduling
Effective production planning helps you optimize manufacturing processes by coordinating material, workforce, and machine availability, for example by tracking machine maintenance needs. These tools should automatically generate production schedules based on customer orders and inventory levels, adjust plans when priorities change, and accommodate complex routing requirements and multi-level bills of materials.
Regulatory Compliance
Many manufacturing companies need ERP systems that provide tracking and reporting tools to help them comply with regulatory standards by documenting your production process and maintaining detailed records. Comprehensive documentation is invaluable during audits and inspections because you can quickly generate reports that demonstrate compliance with industry regulations.
Batch Control
Batch control allows you to track and manage production runs as discrete units and track which specific materials go into each batch. This is important for process manufacturers who need to maintain lot traceability and monitor critical process parameters during production. The best manufacturing ERP systems for batch control capabilities will be able to handle your specific batch size requirements and track both forward and backward through your supply chain.
End-to-End Traceability
An ERP system for a manufacturing company should always give you the ability to track materials and products throughout your entire supply chain, from raw material suppliers through production and distribution to the final customer. To implement effective manufacturing traceability, choose an ERP system that can link lot numbers across all production stages, automatically captures information during manufacturing, and lets you search using various parameters like material and product type.
Inventory Management
Inventory management is one of the original examples of an ERP system. Modern systems should include real-time visibility into availability and commitments, automatic reorder point calculations, demand forecasting, and cycle counting tools that help maintain accurate inventory records. Also look for ERP systems that can handle manufacturing-specific inventory complexities like work-in-process tracking, component kitting, and multi-location inventory management.
Supply Chain Management
Integrated supply chain management features help you coordinate with suppliers and customers, optimizing material flow and reducing lead times. An ERP system for manufacturing should provide visibility into supplier performance and automate purchase order generation. When evaluating supply chain functionality, verify that the system can handle your specific supplier relationships and support your preferred procurement processes.
Customization Options
Flexible customization options allow you to adapt the ERP system to match your unique business processes. ERP system examples might include configurable workflows, custom fields, and industry-specific reports and dashboards. Make sure any customization capabilities are well-documented and supported by the vendor. Poorly implemented customizations can create headaches and complicate future upgrades.
Integration with Existing Systems
Any ERP system for manufacturing should play nice with your other systems. Seamless integration features, like pre-built connectors and open APIs for custom integrations, allow your new ERP system to work with existing manufacturing equipment and business applications. Before making your final selection, verify that the ERP system will work with your specific equipment.
Reporting Tools
Comprehensive reporting tools provide the insights you need to monitor performance and identify improvement opportunities. You should be able to create custom analyses tailored to your specific needs as well as use templates for standard reports. When evaluating reporting functionality, look for systems that offer real-time dashboards, the drill-down capabilities you need, and automated report distribution.
Security Features
Robust security features like data encryption and multi-factor authentication options protect both your manufacturing data and intellectual property. They can also provide detailed audit trails and control access to critical system functions based on user roles. At a minimum, always verify that your manufacturing ERP system follows industry best practices for security.
ERP for Small vs. Large Manufacturing Companies
Not all ERP systems are created equal, especially when it comes to company size. Small manufacturers typically need ERP systems that are quick to implement and easy to use. Cost considerations are also often more significant for smaller manufacturers. They should look for systems with transparent pricing models and the ability to add functionality as the business grows. The best ERP system for a small manufacturing company should also include strong vendor support, because they may not have internal IT expertise.
Large companies generally require a more sophisticated ERP system for manufacturing. These organizations often have dedicated IT teams and can invest in extensive customization projects. Large manufacturers also typically need advanced features like sophisticated supply chain management and detailed financial reporting. However, implementation complexity and costs are usually much higher for large companies. They need ERP vendors with proven experience managing enterprise-scale deployments.
Choosing the Best ERP System for Your Manufacturing Company
Selecting the best manufacturing ERP system requires a systematic approach that starts with understanding your specific needs. The key is to remain focused on your business requirements rather than getting distracted by features that don’t address your challenges.
Conduct a Needs Assessment
A thorough needs assessment helps you identify the specific problems your ERP system needs to solve. Start by documenting your existing processes, identifying pain points, and thinking about your growth plans and regulatory requirements. Gather input from employees across all departments who will be affected by the new system. Then prioritize your needs into must-have features versus nice-to-have capabilities to help you focus your evaluation on systems that meet your core needs.
Decide on Deployment
ERP systems for manufacturing are typically either cloud-based or on-premises. Cloud-based ERP systems typically offer faster implementation and lower upfront costs. They also provide automatic updates, but may limit your customization options. On-premises systems give you more control over security and customization. However, they require significant IT infrastructure and internal expertise. Consider your IT resources, security requirements, and desire for control over updates before making this decision.
Know Your Budget
A manufacturing ERP system isn’t just about up-front cost. You need to understand the total cost of ownership. There are typically three types of pricing: Subscription-based pricing spreads costs over time and includes ongoing support. This makes budgeting easier but may be more expensive over the long term. Perpetual license pricing requires higher upfront investment but may offer lower total costs. Value-based pricing ties costs to the benefits you receive from the system. This can be attractive but requires careful definition of success metrics.
Consider Your Current Tools
Evaluating how well potential manufacturing ERP systems integrate with your existing software helps you minimize costs and setup time. Make sure you document all your current systems and their integration requirements early in the selection process. Integration challenges discovered late can derail your timeline and budget.
Research Vendors
Thorough vendor research helps you identify ERP providers with the features and support you need. Ask your contacts for their favorite manufacturing ERP system examples in your industry. Research the vendor’s stability, customer service, and update frequency. Look for intuitive interfaces and comprehensive training materials to help your team adopt the system quickly. Also consider the vendor’s track record for innovation and their plans for new technologies to ensure your investment will remain current. Then narrow down your list to the top vendors who meet your requirements.
Test and Learn
Hands-on evaluation gives you the best insight into how well each ERP system will work. Some ERP systems for manufacturing offer a free trial or cheaper trial option so you can test the system with real data. Assign the ERP trial to a pre-selected team from different departments to evaluate and have them make a list of pros and cons. Narrow down your options until you have your final choice.
How DELMIAWorks ERP Supports Manufacturing Efficiency
The right manufacturing ERP system can transform your operations by providing the visibility and control you need to compete effectively. DELMIAWorks ERP is specifically designed for manufacturers who need comprehensive functionality without adding complexity. Our integrated platform combines all the features you need in a single solution.
DELMIAWorks provides real-time visibility into your entire operation while eliminating data silos that slow decision-making. Our ERP system for manufacturing is flexible enough to accommodate your unique processes and robust enough to handle modern demands. Contact us today to learn how DELMIAWorks can help you streamline operations, improve customer satisfaction, and drive profitable growth.