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Shopping for any big-ticket item is never easy, whether in your personal or professional life. But there’s a big difference between buying the wrong oven for your house vs. buying the wrong ERP for your company. One will burn your dinner, while the other will burn quality, customer relationships, and the bottom line.
What complicates your ERP purchase decision is the fact that too many ERP vendors have a bad reputation. That’s why users have learned to settle, lowering their expectations and living within a very narrow set of constraints. The typical manufacturer ends up focusing on the wrong areas when shopping for ERP systems, neglecting business model fit, architecture, and manufacturing functionality. But you’re not typical; you’re ready to break free of a limited mindset.
Ask potential ERP vendors (or suppliers) these impactful questions that reveal issues, check the right boxes, and empower your purchase. You’ll uncover the facts you need to make a faster, informed, and appropriate decision that keeps the mistakes to your kitchen appliances.
There are endless types of manufacturing environments, from job-shop to cell-type organizations to highly complex automated systems and robotics. Manufacturers also use hundreds of processes (stamping, forging, machining, coating, assembly, etc.) across dozens of industries. Each combination of manufacturing style, process, and industry has a completely unique set of requirements.
For example, makers of complex, highly configured machines cannot use the same interface as someone who runs high-speed automated equipment making thousands of pieces per hour. An ERP system must be optimized for your specific style of manufacturing and support your business model.
When evaluating any ERP, ask the vendor if plant floor workers can attend system demonstrations or reference visits. If the system is difficult to use, it will become “shelf-ware” and you likely won’t get the ROI you want. If workers won’t use the software, you won’t get the accurate, timely data you need to streamline operations and improve quality.
Billion-dollar industries have been created by consultants and programmers who charge hundreds of dollars per hour to program hard-to-use legacy systems.
There’s an alternative: software that supports new business processes and is tailored to your needs. Through point-and-click and drag-and-drop interfaces, your users should be able to create new screens or reports without writing any code.
Manufacturing operations don’t exist in a vacuum. Your suppliers and customers (from anywhere around the globe) could require direct access to data from your enterprise. That data connection must be both reliable and highly secure.
For the ultimate flexibility, an ERP should be able to share any transaction with a customer or supplier without any programming and without extra software installations for your partner. The system interface should also be intuitive enough that partners don’t need training to use it effectively.
Make sure your future ERP includes useful reports like:
Reports and data should be accessible via a simple web browser, without the need to build a separate “portal” for manufacturing partners. This not only simplifies access but also accelerates deployment schedules — from weeks or months to just minutes.
The enterprise software industry plays games with software licensing, offering variable feature sets on a “per user” basis. Don’t fall for that sales trap.
For example, software vendors convince customers that only 20% of a workforce should be licensed. This keeps the initial price low and attractive. Once the software is deployed throughout the enterprise, it becomes clear that to get the full advertised value, many more employees need to use it — and they all need full licenses, beyond the restricted functionality of licenses often sold in initial implementations. This is why manufacturers often underestimate the number of users necessary when shopping for ERPs.
The plant floor is where your most important data in a company is created, so your ERP system must treat plant floor employees as knowledge workers, capturing and validating critical data at the point of origin. This means that plant floor workers need access to the software as well.
A more flexible licensing model allows complete deployment throughout your enterprise. Everyone adds value to your products and services, so the most effective system will capture important facts about every action as it happens.
ERP vendors might offer different client applications — one for Windows, one for Mac, two for various mobile devices, etc. The problem with this is each software package must be tested, deployed, and maintained/upgraded according to its own schedule. Features available in one app are not always duplicated in another.
Look for ERP navigation consistency from screen to screen, tabbing from field to field, and entering, updating, and finding information in various parts of the software. A truly consistent interface — no matter how the user accesses it — reduces training costs, increases adoption, and drives faster time to value.
Beware of the difference between the front-end experience and the technical specifications. A user interface can be enhanced or modified quickly, giving the illusion that it belongs to a modern application. Meanwhile, the original, outdated code is still in place underneath the shiny interface. Such a system is difficult and expensive to maintain and enhance. Think of it like putting a fresh coat of paint on a car with an old, sputtering engine.
Likewise, the data structures supporting many older applications were based on inefficient “flat file” structures, not modern relational databases. Transaction control and reporting can be very difficult with such outdated architectures.
Most analysts estimate that fewer than 50% of enterprises are within two releases of the current version of their enterprise software packages.
This is especially important because the traditional method of delivering software is fraught with waste and delays. Makers of on-premise solutions provide software updates, at best, every six months or so. After the planning, hardware upgrades, operating system patches, migration, testing, retraining, and bug fixing, more time has passed and the customer wonders whether it was worth the work and the disruption to the business. The result is that most enterprises are two to five years behind the current state of technology, putting them at a disadvantage when the industry is demanding they be more agile.
With cloud/SaaS software development techniques, strong software vendors can release changes with far greater frequency. Such a model means software is accessed over the Internet from anywhere at any time. You only need a web browser to run your entire organization.
There’s no need to invest in and upgrade servers, operating systems, databases, backup equipment, and complex programming environments. You can deploy the application rapidly since you don’t have the lead time and hassles associated with configuring your local environment. Strong cloud-based solutions provide high levels of availability and response time, so software upgrades happen when they should without you lifting a finger.
Many vendors offer standalone solutions to perform certain lean planning functions. These are highly specialized, periodic analytical functions. Ask specifics to find out how an ERP supports lean execution. Is electronic Kanban available? Are pull systems part of the core solution? Are transactions poka-yoke’d (mistake-proofed) at the point of origination? Is heijunka (demand leveling) available? And are these functions supported across the supply chain with customers and suppliers?
This isn’t just wishful thinking. The Plex Smart Manufacturing Platform was designed from the shop floor up to embrace and support lean principles, so we know it’s possible.
These are the most important factors affecting your profitability and success. If your data is captured and validated as the activities are occurring, virtually everyone in the organization will have accurate, timely information for decision-making. Look for a single, logical portal to capture and validate this information in real time on the production floor and the shipping/receiving docks.
Today’s manufacturing solutions should leverage your shop floor employees as knowledge workers. Imagine everyone having everything needed at their fingertips to set up a work center quickly and accurately to make, count, and measure parts, assemblies, or ingredients. Drawings, setup instructions, material requirements, customer alerts, inspection specifications, and more should be available in electronic form right on the shop floor.
Many software solutions treat inventory as a dollar amount of raw material, WIP, or finished goods. By focusing on the accounting transactions, you risk a big disconnect between the physical reality and the dollars in the general ledger.
Consider a system that tracks inventory at the container level — whether it’s a box of purchased parts, an expensive end product with its own serial number, or a coil of steel. The inventory listing can show each “container” of inventory, the stage of production that’s been completed, and the accumulated cost up to that point.
For manufacturing operations in high-precision/high-liability industries such as aerospace, automotive, or food and beverage, it’s critical to track the genealogy of products. Get a good look at how the traceability function works in any system. Is it automated and streamlined, or does it rely on an operator to key in the lot number of the source material?
The ability to track serialized inventory at the container level and at each step of the production process enables any user to quickly trace a defective product back to its point of origin and then rapidly track forward to any other parts that include the same defective material or incorrect manufacturing step.
Purchasing an ERP for your company is a bit more complex and costly than purchasing that oven for your kitchen, so it’s going to require more due diligence. While there are many questions to ask during the vetting process, these 10 will help you dig beyond any sales pitch or brochure and peek behind the curtain at the reality of the solution. The right ERP provider will answer them truthfully and to your liking, quickly turning from a potential vendor into your true partner.