Everything You Need to Know About ERP Software
Anyone that has grown up in industry knows that manufacturing ERP or shop management software is nothing new. Many of the solutions available for small and mid-market manufacturers today have their roots and origins in the solutions designed well over 50 years ago. These precursors to modern ERP systems were heavily focused on materials requirements planning (MRP) and managing the required inventory levels of raw materials and finished goods in large, sophisticated manufacturing operations.
However, as business and operational needs changed and with the advent of personal computers in the 1980s, these MRP and MRP-II solutions evolved into the ERP solutions widely available today. Modern Manufacturing ERP solutions are designed to manage all business functions and are built on a single, centralized platform. These solutions now manage and coordinate all activities related to customer management, estimating, sales, production, procurement, logistics, and financial management, providing a “single source of the truth” and a 360-degree view of the enterprise.
Legacy Manufacturing ERP solutions, once cumbersome to implement, difficult to learn, and focused primarily on the administration of tasks and management of data, have given way to intuitive, easy-to-learn, and agile solutions. Formerly designed to provide a historical view of business performance, ERP software (now embedded with business intelligence) offers business owners and other key stakeholders a predictive view of how the business could perform in the future. It allows individuals to proactively make decisions (based on factual insight) that will impact future performance.
Manufacturing ERP software is now also designed to meet the needs of specific industry verticals (machining, fabrication, mold building, tool and die, etc.) and specific manufacturing models (make-to-stock, make-to-order, configure-to-order, engineer-to-order, etc.). Also, rather than a “one size fits all approach” to manufacturing management, modern ERP solutions are highly configurable. These solutions now often allow (appropriate) individuals to personalize the solution to meet a specific need. While designed to promote industry best practices, the modern ERP solution can also be adapted to fit a unique business requirement that allows that manufacturer to leverage a specific competitive advantage.
Modern ERP solutions are also more “portable” than ever before. The cloud has now enabled Manufacturing ERP solutions to be leveraged anywhere, any time, and on any device without the need for complicated installation and ongoing maintenance. Whether hosted or built natively in the cloud, ERP solutions no longer require significant fronts-end and ongoing investment in servers and workstations. ERP solutions, developed within the last five years, are now purposefully built and optimized for use on tablets, smartphones, or other portable devices. Finally, these ERP solutions are also more “open” than their legacy counterparts. ERP developers have recognized not all ERP solutions may meet the needs of every manufacturer. Through modern application programming interfaces (APIs) or web services, ERP software developers can now quickly develop an interface to almost any other application. What that means is that a modern ERP solution can easily communicate and interface to other “point” solutions that better meet a manufacturer’s requirements. Standard integrations typically exist between ERP solutions and solutions designed especially for estimating, nesting, tooling management production scheduling, or customer relationship management. The best of these integrations eliminates duplicate data entry and further optimizes the capabilities of both solutions.
In the final analysis, ERP software, once thought to be a needed expense of only the largest of manufacturers, has now become a required investment for even the smallest of manufacturers to maintain their competitive advantage. For many small manufacturers that do not currently leverage an ERP solution, the question is no longer “if” but rather “when.”